Dr. Jeffrey Michael. Executive Director, Center for Business and Policy Research University of the Pacific

Transcription

1 2019 San Joaquin County Economic Outlook Dr. Jeffrey Michael Executive Director, Center for Business and Policy Research University of the Pacific

2 Outline Population Growth and Migration California and San Joaquin Implication for Housing Job Growth California and San Joaquin Logistics Boom Income Growth California and San Joaquin 2019 Outlook

3 California Population Growth At Record Low in 2018 State added 160,000 residents in 2018, compared to 320,000 earlier in the decade. 1.00% 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% United States California

4 More people are leaving California for other states, but not at record levels. Record low birth rates and drop in immigration are bigger factors. Thousands of People Births - Deaths International Migration Domestic Migration

5 San Joaquin County Migration: Domestic migration positive since 2014

6 Jan-90 Oct-90 Jul-91 Apr-92 Jan-93 Oct-93 Jul-94 Apr-95 Jan-96 Oct-96 Jul-97 Apr-98 Jan-99 Oct-99 Jul-00 Apr-01 Jan-02 Oct-02 Jul-03 Apr-04 Jan-05 Oct-05 Jul-06 Apr-07 Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12 Apr-13 Jan-14 Oct-14 Jul-15 Apr-16 Jan-17 Oct-17 Jul-18 Difference in Alameda and San Joaquin County Median Home Price (Adjusted for Inflation, October 2018$) Home Prices are Historically Attractive Relative to the Bay Area $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- Source: California Association of Realtors, Bureau of Labor Statistics

7 San Joaquin County Residential Building Permits: For 2018, SJC has fastest growth rate in the state (counties with >1000 permits in 2017) 8,000 7,000 Single Family Multiple Family 6,000 5,000 4,000 3,000 2,000 1, * Source: CIRB *Through October 2018

8 f Unemployment At Record Lows: Gap between San Joaquin and California has narrowed. 18.0% 16.0% 14.0% 12.0% Stockton 10.0% 8.0% 6.0% California 4.0% 2.0% 0.0%

9 Annual % change in jobs: San Joaquin growing jobs faster than California for past 7 years. 5.0% 4.0% 3.0% 2.0% 1.0% San Joaquin 3.1% California 1.9% 0.0% -1.0% % -3.0% -4.0%

10 5 Year Payroll Job Growth in 12 Largest California Metro Areas (Oct ) Riverside-San Bernardino 20.9% Stockton-Lodi 18.9% San Jose-Sunnyvale 17.8% Fresno 17.7% San Francisco-Redwood City 17.6% Oakland-Hayward-Berkeley 13.4% Sacramento--Roseville 13.2% San Diego-Carlsbad 12.0% Anaheim-Santa Ana-Irvine 11.6% Los Angeles-Long Beach 9.2% Oxnard-Thousand Oaks 6.4% Bakersfield 4.9% # Source: State of California Employment Development Department, Labor Market Information U.S. Department of Labor Bureau of Labor Statistics *Unemployment rate as of October 2018

11 The Rise of the Transportation/Logistics Cluster Future Prospects Remain Strong E-commerce has more room for growth. Tied to Bay Area Economy. San Joaquin County leads Megaregion in developing well-suited industrial space.

12 Percent Change in Average Weekly Wage in San Joaquin County (not inflation adjusted) 3.7% 4.0% 4.2% 2.9% 2.2% 1.3% 1.3% 0.1% 0.1% % Four years of strong wage gains had strong local job growth, but at terrible wages. Since 2014, both jobs and wages have grown leading to better household incomes.

13 NSJV small businesses are getting more concerned about skilled labor Availability of Skilled Labor Housing Costs and Affordability Infrastructure (Transportation) Business Real Estate Costs and Availability Local Consumer Demand Rating Average Spring '18 Rating Average Fall '17

14 Real median household money income As of 2017, still $2,000 below pre-recession inflation adjusted peak. $75,000 $70,000 California $65,000 San Joaquin $60,000 $55,000 $50,000 $45,000 $40,000 $35,000 $30,

15 Real per capita income: Broader measure of income (non-money), and captures high end growth. $65,000 $60,000 $55,000 California $50,000 $45,000 $40,000 San Joaquin $35,000 $30,000 $25,000 $20,000 $15,000

16 San Joaquin County Outlook 3 Most Significant Economic Clusters In County Have Solid Prospects and Some Room for Growth. Agriculture, Food and Beverage (wine) Logistics and E-Commerce Bay Area Commuting, Residential Growth Long-run Challenges To Building Higher Wage Local Clusters: Not cost competitive beyond Northern California. Low human capital

17 2019 San Joaquin Outlook: Biggest Risk for 2019 is Global and National: Recession Risks Rising as Scott described. Bay Area Remains Strong Growth is slowing, but less than previously forecast. New California political climate could be favorable for San Joaquin if state economy/revenue hold up. Local Momentum Is Strong But Growth Will Slow Along with California and Bay Area. Job growth slows to 2.1% this year and unemployment stabilizes in mid 5% range. Increasing anxiety about 2020.