Markets, He Wrote On Behalf of The 2017 CFMA Southwest Regional Conference By: Anirban Basu Sage Policy Group, Inc. September 25 th, 2017
Macro P.I. (Just How Hairy is the Global Situation?) Photo: Flixter.com
Estimated Growth in Output by Select Global Areas 2017 Projected Advanced Economies Euro Area France Germany Italy Spain Japan United Kingdom Canada Australia United States Emerging Market & Developing Economies Sub-Saharan Africa Emerging & Developing Europe Russia Emerging & Developing Asia China India (3) Middle East, North Africa, Afghanistan, & Pakistan Latin America & the Caribbean Mexico Brazil 2017 Proj. Global Output Growth: 3.5% Source: International Monetary Fund: World Economic Outlook Update, July 2017 2016 Growth (Estimate) World: 3.2% Euro Area: 1.8% United States: 1.6% Japan: 1.0% 2.0% 1.9% 1.5% 1.8% 1.3% 3.1% 1.3% 1.7% 2.5% 3.1% 2.1% 4.6% 2.7% 3.5% 1.4% 2.6% 1.0% 1.9% 0.3% 6.5% 6.7% 7.2% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Annual % Change
International Population Dynamics, 16 Largest Nations Nation Population (Millions) 2017 2050 Net Change % Change Nigeria 190.9 410.6 219.8 115.1% Ethiopia 105.0 190.9 85.9 81.9% Egypt 97.6 153.4 55.9 57.3% Pakistan 197.0 306.9 109.9 55.8% Philippines 104.9 151.3 46.4 44.2% Mexico 129.2 164.3 35.1 27.2% India 1,339.2 1,659.0 319.8 23.9% Bangladesh 164.7 201.9 37.3 22.6% Indonesia 264.0 321.6 57.6 21.8% United States 324.5 389.6 65.1 20.1% Vietnam 95.5 114.6 19.1 20.0% Brazil 209.3 232.7 23.4 11.2% China 1,409.5 1,364.5-45.1-3.2% Germany 82.1 79.2-2.9-3.5% Russian Federation 144.0 132.7-11.3-7.8% Japan 127.5 108.8-18.7-14.7% World 7.6 billion 9.8 billion 2.2 billion 29.4% Source: United Nations, Department of Economic and Social Affairs (DESA)/Population Division. World Population Prospects: The 2017 Revision. *For statistical purposes, the data for China do not include Hong Kong and Macao, Special Administrative Regions (SAR) of China, and Taiwan Province of China.
Niamey Vice (Fertility Rates by Country, 2015) Rank* Top 15 Bottom 15 Country Fertility Rate Rank* Country Fertility Rate 1 Niger 7.29 187 Malta 1.42 2 Somalia 6.37 188 Italy 1.37 3 Dem. Rep. of the Congo 6.20 188 Slovak Republic 1.37 4 Mali 6.15 190 Mauritius 1.36 5 Chad 6.05 191 Cyprus 1.35 6 Burundi 5.78 192 Bosnia and Herzegovina 1.35 7 Angola 5.77 193 Poland 1.32 8 Uganda 5.68 193 Spain 1.32 9 Timor-Leste 5.62 195 Greece 1.30 10 Nigeria 5.59 196 Macao SAR, China 1.28 11 Gambia, The 5.49 197 Moldova 1.25 12 Burkina Faso 5.44 198 Singapore 1.24 13 Mozambique 5.31 199 Korea, Rep. 1.24 14 Tanzania 5.08 200 Portugal 1.23 15 Benin 5.05 201 Hong Kong SAR, China 1.20 Source: World Bank, World Development Indicators *Rank among 201 countries for which data are available for the most recent year (2015) **Total fertility rate represents the number of children that would be born to a woman if she were to live to the end of her childbearing years and bear children in accordance with age-specific fertility rates of the specified year.
Global Debt to Exacerbate Slow Growth? According to the IMF, global debt reached an all-time high in 2015; At $152 trillion, global gross debt of the nonfinancial sector now represents 225% of global GDP; About 2/3 of this debt is in the private sector; Current low nominal-growth environment is making adjustment difficult, setting the stage for a vicious feedback loop in which lower growth hampers deleveraging and the debt overhang exacerbates the slowdown. 2 Sources: 1. International Monetary Fund. October 2016. World Economic Outlook: Subdued Demand: Symptoms and Remedies. 2. International Monetary Fund (IMF). October 2016. Fiscal Monitor: Debt Use It Wisely. Note: The nonfinancial sector comprises the general government, nonfinancial firms, and households. Gross debt represents the unconsolidated liabilities of the three.
Global Debt Reaches All Time Highs (IIF) According to the International Institute of Finance (IIF), global debt has reached an all-time high in 2016; At $215 trillion, global debt including household, government, and corporate now represents 325% of global GDP; Last year the IMF warned of risks to the global economy: sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery Sources: 1. Institute of International Finance (IFF), Global Debt Monitor. 2. Business Insider. 3. The Telegraph. 4. Reuters.
Aug-01 Dec-01 Apr-02 Aug-02 Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 $/Barrel NYMEX Crude Oil Future Prices in U.S. Dollars August 2001 through August 2017 $140 $120 $100 August 2017: $48.05 /Barrel $80 $60 $40 $20 $0 Source: U.S. Energy Information Administration *Month of August = average of daily prices from 8/1-8/31
Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Jul-17 2010=100 Metal Price Indices July 2007 through July 2017 165 145 125 105 85 Precious Metals 65 Base Metals 45 Iron Ore 25 Source: The World Bank US$ Nominal Base metals include aluminum, copper, lead, nickel, tin and zinc. Precious metals include gold, platinum, and silver.
Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Baltic Dry Index September 2009 through September 2017 5,000 4,000 3,000 2,000 1,000 September 15 th 1,385 0 Jan. 4, 1985: 1,000 Source: Quandl.com The Baltic Dry Index (BDI) is a measure of the price of shipping major raw materials such as metals, grains, and fossil fuels by sea. The BDI is a composite of 3 sub-indices, each covering a different carrier size: Capesize, Panamax, and Supramax.
USA CSI (Commercial Situation Investigation) Photo: AMCNetworks.com
1990Q2 1991Q1 1991Q4 1992Q3 1993Q2 1994Q1 1994Q4 1995Q3 1996Q2 1997Q1 1997Q4 1998Q3 1999Q2 2000Q1 2000Q4 2001Q3 2002Q2 2003Q1 2003Q4 2004Q3 2005Q2 2006Q1 2006Q4 2007Q3 2008Q2 2009Q1 2009Q4 2010Q3 2011Q2 2012Q1 2012Q4 2013Q3 2014Q2 2015Q1 2015Q4 2016Q3 2017Q2 % Change from Preceding Period (SAAR) Gross Domestic Product 1990Q2 through 2017Q2* 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% 2017Q2: +3.0% Source: Bureau of Economic Analysis *2 nd Estimate
Percent Change from Preceding Period (SAAR) SAAR (%) Contributions to GDP Growth by Component 2016Q3 2017Q2* 3.5 3.0 3.0 2.8 2.5 2.0 1.8 1.5 1.2 1.0 0.5 3.0 1.9 2.0 1.0 0.0-1.0-2.0 2.28 2016Q3 2016Q4 2017Q1 2017Q2 2.0 1.3 1.3 0.60 0.4 0.4 0.1 0.0 0.2 0.21-0.1-0.05-0.2-1.6 0.0 GDP -3.0 Personal Consumption Government Spending Net Exports Gross Investment Source: Bureau of Economic Analysis *2 nd Estimate 2017Q2: +3.0%
Aug-02 Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Thousands Net Change in U.S. Jobs, BLS August 2002 through August 2017 600 400 200 0-200 -400 August 2017: +156K -600-800 -1000 Source: U.S. Bureau of Labor Statistics
National Nonfarm Employment by Industry Sector August 2016 v. August 2017 Professional and Business Services Education and Health Services Leisure and Hospitality Construction Financial Activities Manufacturing Trade, Transportation, and Utilities Other Services Mining and Logging Government Information -67 8 58 88 108 149 138 602 476 323 214 All told 2,097K jobs gained -100 0 100 200 300 400 500 600 700 Thousands, SA Source: U.S. Bureau of Labor Statistics
Aug-00 Feb-01 Aug-01 Feb-02 Aug-02 Feb-03 Aug-03 Feb-04 Aug-04 Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 U.S. Employment to Population Ratio August 2000 August 2017 65.0 64.0 63.0 62.0 61.0 August 2017: 60.1% 60.0 59.0 58.0 Source: U.S. Bureau of Labor Statistics Note: Civilian employment-population ratio, population 16 years and over, seasonally adjusted (SA).
Arizona Nonfarm Employment by Industry Sector Groups (SA) August 2016 v. August 2017 Absolute Change Leisure & Hospitality 12,400 Education & Health Services 9,000 Financial Activities 5,900 Manufacturing Government 4,300 4,000 Construction Professional & Business Services Trade, Transportation & Utilities Mining and Logging Other Services Information -2,600-3,100 2,300 1,300 1,100 100 AZ Total (SA): +34.7K; +1.3% US Total (SA): +2,097K; +1.4% -5,000-2,000 1,000 4,000 7,000 10,000 13,000 Source: U.S. Bureau of Labor Statistics *According to the Local Area Unemployment Statistics (LAUS) series AZ added 62,134 jobs between August 2016 and August 2017.
New Mexico Nonfarm Employment by Industry Sector Groups (SA) August 2016 v. August 2017 Absolute Change Professional and Business Services 4,700 Leisure and Hospitality Construction 3,300 3,200 Trade, Transportation, and Utilities Education and Health Services Financial Activities Manufacturing 900 700 200 200 Information Other Services -100-400 NM Total: +8.8K; +1.1% Mining and Logging Government -3,500-400 US Total (SA): +2,097K; +1.4% -5,000-3,000-1,000 1,000 3,000 5,000 Source: U.S. Bureau of Labor Statistics *According to the Local Area Unemployment Statistics (LAUS) series NM added 6,787 jobs between August 2016 and August 2017.
California Nonfarm Employment by Industry Sector Groups (SA) August 2016 v. August 2017 Absolute Change Education and Health Services 75,400 Construction Leisure and Hospitality Government 39,500 39,300 47,400 Other Services Trade, Transportation, and Utilities 20,300 26,900 Professional and Business Services Financial Activities Information Mining and Logging -1,100 Manufacturing -2,800 7,300 4,000 8,900 CA Total: +265.1K; +1.6% US Total (SA): +2,157K; +1.5% -10,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 Source: U.S. Bureau of Labor Statistics *According to the Local Area Unemployment Statistics (LAUS) series CA added 94,946 jobs between August 2016 and August 2017.
Nevada Nonfarm Employment by Industry Sector Groups (SA) August 2016 v. August 2017 Absolute Change Construction 11,600 Professional and Business Services 8,500 Education and Health Services 7,100 Leisure and Hospitality 4,300 Government 2,900 Manufacturing 1,500 Trade, Transportation, and Utilities 1,400 Other Services Mining and Logging 1,100 400 NV Total: +38.8K; +3.0% Financial Activities Information -100 100 US Total (SA): +2,097K; +1.4% -1,000 1,000 3,000 5,000 7,000 9,000 11,000 Source: U.S. Bureau of Labor Statistics *According to the Local Area Unemployment Statistics (LAUS) series NV added 24,731 jobs between August 2016 and August 2017.
State-by-state Growth in Construction Jobs August 2016 v. August 2017 STATE YOY Change ( 000) STATE YOY Change ( 000) STATE YOY Change ( 000) CALIFORNIA 47.4 PENNSYLVANIA 4.7 DELAWARE* 0.1 FLORIDA 35.0 VIRGINIA 4.5 ALASKA -0.3 LOUISIANA 15.3 OKLAHOMA 3.8 VERMONT -0.3 TEXAS 15.2 MASSACHUSETTS 3.4 SOUTH CAROLINA -0.4 NEVADA 11.6 NEW MEXICO 3.2 WYOMING -0.5 OREGON 10.6 RHODE ISLAND 3.2 MISSISSIPPI -0.6 OHIO 8.1 NEW HAMPSHIRE 3.1 NORTH DAKOTA -0.6 MARYLAND* 7.8 ARIZONA 2.3 HAWAII* -0.6 WASHINGTON 7.7 IDAHO 1.9 SOUTH DAKOTA* -0.7 TENNESSEE* 6.8 MAINE 1.6 CONNECTICUT -1.2 ALABAMA 6.6 WEST VIRGINIA 1.1 NEW YORK -1.4 KENTUCKY 6.3 KANSAS 1.0 GEORGIA -1.5 MICHIGAN 6.3 ARKANSAS 0.5 NEBRASKA* -1.5 MINNESOTA 6.3 WISCONSIN 0.4 NORTH CAROLINA -1.8 NEW JERSEY 6.3 DISTRICT OF COLUMBIA* 0.3 MISSOURI -2.1 UTAH 5.7 COLORADO 0.1 ILLINOIS -3.0 INDIANA 4.7 MONTANA 0.1 IOWA -5.9 Source: U.S. Bureau of Labor Statistics U.S. Year-over-year Net Change: +214K *Construction, Mining, and Logging are included in one industry.
Employment Growth, U.S. States (SA) August 2016 v. August 2017 Percent Change RANK STATE % RANK STATE % RANK STATE % 1 NEVADA 3.0 18 CALIFORNIA 1.6 35 INDIANA 1.0 2 GEORGIA 2.7 18 KENTUCKY 1.6 35 OHIO 1.0 3 FLORIDA 2.6 18 MASSACHUSETTS 1.6 35 PENNSYLVANIA 1.0 3 UTAH 2.6 18 MONTANA 1.6 38 NEW JERSEY 0.9 5 TEXAS 2.5 18 NORTH CAROLINA 1.6 39 SOUTH DAKOTA 0.8 6 MARYLAND 2.3 23 MINNESOTA 1.5 40 DELAWARE 0.6 6 OREGON 2.3 23 VIRGINIA 1.5 40 HAWAII 0.6 8 IDAHO 2.2 25 ALABAMA 1.4 40 MISSISSIPPI 0.6 9 NEW HAMPSHIRE 2.1 25 MICHIGAN 1.4 40 VERMONT 0.6 9 WASHINGTON 2.1 25 NEW YORK 1.4 40 WISCONSIN 0.6 11 ARKANSAS 1.9 28 ARIZONA 1.3 45 CONNECTICUT 0.4 11 RHODE ISLAND 1.9 28 NEBRASKA 1.3 45 ILLINOIS 0.4 13 COLORADO 1.8 28 NORTH DAKOTA 1.3 45 MAINE 0.4 13 MISSOURI 1.8 31 LOUISIANA 1.2 48 ALASKA 0.1 13 TENNESSEE 1.8 31 OKLAHOMA 1.2 48 WEST VIRGINIA 0.1 16 DISTRICT OF COLUMBIA 1.7 33 NEW MEXICO 1.1 50 KANSAS -0.6 16 SOUTH CAROLINA 1.7 33 IOWA 1.1 51 WYOMING -0.9 Source: U.S. Bureau of Labor Statistics U.S. Year-over-year Percent Change: +1.4%
Employment Growth, 24 Largest Metros (NSA) August 2016 v. August 2017 Percent Change Rank MSA % Rank MSA % 1 Orlando-Kissimmee-Sanford, FL MSA 3.3 13 Washington-Arlington-Alexandria, DC-VA-MD- WV MSA 2 Atlanta-Sandy Springs-Roswell, GA MSA 3.2 14 Denver-Aurora-Lakewood, CO MSA 2.0 3 Tampa-St. Petersburg-Clearwater, FL MSA 3.1 15 Houston-The Woodlands-Sugar Land, TX MSA 1.8 4 Dallas-Fort Worth-Arlington, TX MSA 2.8 15 Philadelphia-Camden-Wilmington, PA-NJ-DE- MD MSA 5 Seattle-Tacoma-Bellevue, WA MSA 2.7 15 Phoenix-Mesa-Scottsdale, AZ MSA 1.8 6 Charlotte-Concord-Gastonia, NC-SC MSA 2.6 18 San Francisco-Oakland-Hayward, CA MSA 7 Portland-Vancouver-Hillsboro, OR-WA MSA 2.5 19 New York-Newark-Jersey City, NY-NJ-PA MSA 1.5 7 9 10 Riverside-San Bernardino-Ontario, CA MSA Miami-Fort Lauderdale-West Palm Beach, FL MSA Boston-Cambridge-Nashua, MA-NH Metro NECTA 10 Detroit-Warren-Dearborn, MI MSA 2.3 23 10 Minneapolis-St. Paul-Bloomington, MN-WI MSA Source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES) Survey 2.1 1.8 1.7 2.5 20 Baltimore-Columbia-Towson, MD MSA 1.4 2.4 21 San Diego-Carlsbad, CA MSA 1.3 2.3 22 St. Louis, MO-IL MSA 1.1 Los Angeles-Long Beach-Anaheim, CA MSA 0.6 2.3 24 Chicago-Naperville-Elgin, IL-IN-WI MSA 0.5
Unemployment Rates, 24 Largest Metros (NSA) July 2017 Rank MSA UR Rank MSA UR 1 Denver-Aurora-Lakewood, CO MSA 2.4 13 Baltimore-Columbia-Towson, MD MSA 4.4 2 Minneapolis-St. Paul-Bloomington, MN-WI MSA 3 Dallas-Fort Worth-Arlington, TX MSA 3.7 15 4 Washington-Arlington-Alexandria, DC-VA-MD-WV MSA San Francisco-Oakland-Hayward, CA 4 MSA Boston-Cambridge-Nashua, MA-NH Metro 6 NECTA 3.3 13 Detroit-Warren-Dearborn, MI MSA 4.4 Miami-Fort Lauderdale-West Palm Beach, FL MSA 4.5 3.9 16 Phoenix-Mesa-Scottsdale, AZ MSA 4.6 3.9 17 Chicago-Naperville-Elgin, IL-IN-WI MSA 4.7 4.0 17 New York-Newark-Jersey City, NY-NJ-PA MSA 4.7 6 Orlando-Kissimmee-Sanford, FL MSA 4.0 17 San Diego-Carlsbad, CA MSA 4.7 6 Seattle-Tacoma-Bellevue, WA MSA 4.0 20 Atlanta-Sandy Springs-Roswell, GA MSA 4.8 6 St. Louis, MO-IL MSA (1) 4.0 21 Houston-The Woodlands-Sugar Land, TX MSA 4.9 10 Portland-Vancouver-Hillsboro, OR-WA MSA 4.1 22 10 Tampa-St. Petersburg-Clearwater, FL MSA 4.1 23 12 Charlotte-Concord-Gastonia, NC-SC MSA 4.2 24 Source: U.S. Bureau of Labor Statistics U.S. Unemployment Rate July: 4.3% August: 4.4% Los Angeles-Long Beach-Anaheim, CA MSA Philadelphia-Camden-Wilmington, PA-NJ-DE- MD MSA Riverside-San Bernardino-Ontario, CA MSA 5.0 5.2 6.1 1. Area boundaries do not reflect official OMB definitions.
21 Jump Street (And Other Addresses of Interest) Photo: TheMoveDatabase.org
SAAR ($billions) Nonresidential Construction Put-in-Place December 2006 through July 2017 800 Public Oct-08: $719.5B Private 700 July-17: $688.4B 600 Jan-11: $506.8B 500 400 300 200 100 0 Source: U.S. Census Bureau
Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Architecture Billings Index August 2008 through August 2017 60.0 55.0 50.0 45.0 40.0 35.0 August 2017: 53.7 30.0 Source: The American Institute of Architects
National Nonresidential Construction Spending by Subsector July 2014 v. July 2017 Lodging Office Amusement and recreation Commercial Communication Manufacturing Educational Highway and street Transportation Health care Religious Conservation and development Power Public safety Water supply Sewage and waste disposal -0.8% -1.1% -8.5% -11.7% -14.1% -18.8% -20.6% -21.2% 5.1% 1.2% 17.1% 36.0% 31.3% 31.0% 49.4% Total Nonresidential Construction: +$51.2B; +8.0% 61.1% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 3-year % Change Source: U.S. Census Bureau
Billions of $US Commercial/Multifamily Offshore Investment Sales Volumes Reach New Heights in 2015/16 $60 $50 Foreign investment increases 85.1% in 2015 $40 $30 $20 $10 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Jones Lang LaSalle; Real Capital Analytics Cross-border investment remained elevated in 2016: Although down relative to a record 2015, offshore investment levels still exceeded the pre-2015 high in 2007. Note: Among transactions larger than $5.0 million
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD Foreign Office Investment Activity, as of 2016Q3 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Foreign Participation as a % of Total Office Volume 14.9% Foreign Office Investment by Destination Market (as a % of Total, 2016YTD) New York San Francisco Boston Washington, DC Dallas-Fort Worth Los Angeles Seattle-Bellevue Miami Northern New Jersey Chicago Atlanta Austin Philadelphia San Diego 8.4% 7.1% 6.8% 5.6% 4.8% 4.8% 2.8% 2.1% 1.9% 1.6% 1.4% 1.1% 1.1% 45.5% 0% 10% 20% 30% 40% 50% Source: Jones Lang LaSalle; Real Capital Analytics Note: Among transactions larger than $5.0 million; includes all office markets which received > 1.0% of offshore capital. Primary markets continue to capture the lion s share of inbound capital, receiving 78.2% of this capital YTD.
Aug-01 Dec-01 Apr-02 Aug-02 Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 12-month % Change Inputs to Construction PPI (NSA) August 2001 August 2017 15% 10% Aug. 2016 v. Aug. 2017: +3.7% 5% 0% -5% -10% Source: U.S. Bureau of Labor Statistics
Construction Materials PPI (NSA) 12-month % Change as of August 2017 Crude Petroleum Softwood Lumber Crude Energy Materials Iron and Steel Natural Gas Steel Mill Products Nonferrous Wire and Cable Concrete Products Plumbing Fixtures and Fittings Fabricated Structural Metal Products Prepared Asphalt & Tar Roofing/Siding Products -1.9% 1.9% 1.8% 2.9% 5.2% 7.0% 6.7% 9.5% 9.5% 11.3% 15.0% -5% 0% 5% 10% 15% 12-month % Change Source: U.S. Bureau of Labor Statistics
Down to The Wire Photo: RecapGuide.com
Sales Growth by Type of Business August 2016 v. August 2017* Internet, etc. Retailers Building Material & Garden Supplies Dealers Gasoline Stations Furniture & Home Furn. Stores Miscellaneous Store Retailers General Merchandise Stores Food Services & Drinking Places Food & Beverage Stores Motor Vehicle & Parts Dealers Clothing & Clothing Accessories Stores Health & Personal Care Stores Sporting Goods, Hobby, Book & Music Stores Electronics & Appliance Stores -3.5% -1.4% 2.5% 2.3% 2.1% 1.5% 0.6% 0.5% 8.4% 7.5% 6.4% 5.4% 5.2% -5% -2% 1% 4% 7% 10% 12-month % change Source: U.S. Census Bureau *August 2017 advanced estimate Total Retail Sales: +3.2% YOY
Jul-05 Nov-05 Mar-06 Jul-06 Nov-06 Mar-07 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Jul-17 Savings Rate (%) U.S. Saving Rate, July 2005 July 2017 (Savings as Percentage of Personal Disposable Income) 12.0 10.0 8.0 July 2017: 3.5% 6.0 4.0 2.0 0.0 Source: Bureau of Economic Analysis
2000Q2 2000Q4 2001Q2 2001Q4 2002Q2 2002Q4 2003Q2 2003Q4 2004Q2 2004Q4 2005Q2 2005Q4 2006Q2 2006Q4 2007Q2 2007Q4 2008Q2 2008Q4 2009Q2 2009Q4 2010Q2 2010Q4 2011Q2 2011Q4 2012Q2 2012Q4 2013Q2 2013Q4 2014Q2 2014Q4 2015Q2 2015Q4 2016Q2 2016Q4 2017Q2 U.S. Gross Private Domestic Investment (SAAR) % Change from Previous Quarter, 2000Q2 2017Q2* 40.0 30.0 20.0 10.0 0.0-10.0-20.0-30.0-40.0 2017Q2: +3.6% Source: Bureau of Economic Analysis *2 nd Estimate
Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 One-month Percent Change Conference Board Leading Economic Indicators Index August 2007 through August 2017 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% August 2017: 128.8 where 2010: 100-1.5% Source: Conference Board
The Closer Global economy remains weak, and correspondingly... ; Global money has continued to pour into America in search of yield and safety, including into commercial real estate that was particularly true in 2015, only a bit less true in 2016; Inflationary pressures are on the rise so, too, are interest rates eventually -- that could begin to squeeze asset prices in 2017/18, triggering negative wealth effects and sentiment in the process; There are indications of mini-bubbles forming in commercial real estate, particularly in office, lodging and multifamily segments; There are also longer-term structural considerations, including the national debt and pending insolvencies of Medicare and Social Security the longer-term outlook may be deteriorating even as the short-run improves; Momentum should see us through 2017, but tighter monetary policy combined with a heavy dose of political intrigue could render 2018 different. By this time in 2019/20, the economy could be in a far different place and likely will be. Photo: Google *Kyra Sedgwick as Brenda Leigh Johnson
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