The Erie Economy: Performance, Opportunities, and Challenges

Transcription

1 The Erie Economy: Performance, Opportunities, and Challenges Eggs n Issues Manufacturer and Business Association December 2015 Dr. Kenneth Louie The Economic Research Institute of Erie Sam and Irene Black School of Business Penn State Behrend

2 Overview Employment, Unemployment, & Labor Force Participation Output (GDP) Income per Capita Cost of Living Components of Personal Income Erie in the Global Economy 2016 Economic Outlook The Erie Leading Index (ELI) Highlights of Some of Our Work at the Economic Research Institute of Erie in the Black School of Business at Penn State Behrend 1

3 Erie Employment (SA*) 127,000 *SA = seasonally adjusted, not South America. Source: Bureau of Labor Statistics, Local Area Unemployment Statistics 2

4 Unemployment Rate (%) Erie & US Unemployment (SA) Erie U.S. Latest: October Source: Bureau of Labor Statistics, Local Area Unemployment Stats 3

5 Difference in Erie - US Unemployment Rates (SA) Average difference Jan April 2008: +.53 Average difference May April 2015: Latest: September Source: Bureau of Labor Statistics, Local Area Unemployment Stats 4

6 % Change in Employment The U.S. s 9 Recessions since / Months after Peak Latest: November 2014, Peak = Jan 2008 Source: Bureau of Labor Statistics, Current Employment Survey 5

7 % Change in Employment Erie s 9 Recessions since / Months after Peak Latest: October 2014, Peak = May 2008 Source: Bureau of Labor Statistics, Current Employment Survey 6

8 Number of Jobs Erie Gross Job Losses During the Recession 4,000 2,000 1,400 Gain 0-2,000-4,000-6,000-8,000-2,300-6,100-3, ,600-2, ,000-12,000-14,000-16,000-13,400 Note: Industry detail does not add to total due to use of different peak & trough dates for each industry. Source: Bureau of Labor Statistics, LAUS 7

9 Jobs Lost and Regained 14,000 12,000 10,000 13,400 10,700 Latest: October ,000 6,000 6,100 4,000 2, ,000 2,300 1,400 3,600 3,100 2, ,600 2,700 1, , Source: Bureau of Labor Statistics, LAUS 8

10 Percent Labor Force Participation Rate (SA) U.S. LFPR Size of Erie Year Labor Force , , , , , , , , , , Latest: July 2014 Source: Bureau of Labor Statistics 9

11 % Change from Peak Value U.S. LFPR in 11 Cycles Months Past Cycle Peak Nov 1948 Jul 1953 Aug 1957 Apr 1960 Dec 1969 Nov 1973 Jan 1980 Jul 1981 Jul 1990 Mar 2001 Dec 2007 Source: Bureau of Labor Statistics 10

12 Indexed GDP (2001 = 100) Erie & US Output (GDP, GMP) GDP: Erie: $10,856,000,000 U.S.: $17,316,314,000,000 %DRGDP ( ): Erie: +0.2% U.S.: +1.7% U.S Erie 100 Latest: Source: Bureau of Economic Analysis, REIS 11

13 Erie GMP by Industry, 2014 Erie U.S. Erie Erie to to Industry GMP % of GDP %% of of U.S. U.S. (in millions) GMP (in billions) GDP LQ LQ All All industry total $10,856 $10, $16,701,415.0 $15,678, Private industries 9,432 9, ,613, ,795, Agriculture, forestry, fishing, and hunting , , Mining , , Utilities , , Construction , , Manufacturing 2,851 2, ,079, ,797, Durable goods 1,953 1, ,096, , Nondurable goods , , Wholesale trade , , Retail trade , , Transportation and warehousing , , Information , , Finance and and insurance 1, ,293, ,206, Real Real estate estate and and rental and leasing ,178, ,161, Professional, Professional, scientific, and and technical technical services services ,172, ,180, Management Management of of companies companies and and enterprises enterprises , , Administrative Administrative and and waste waste management management services services , , Educational services , Educational services , Health care and social assistance 1, ,200, Health care and social assistance 1, ,133, Arts, entertainment, and recreation , Arts, entertainment, and recreation , Accommodation and food services , Accommodation and food services , Other services, except government , Other services, except government , Government 1, ,087, Government 1, ,883, Source: Bureau of Economic Analysis, REIS 12

14 Annual % Change Growth Rate of Real GDP Annual Average: Erie 0.25%, U.S. 1.70% Erie U.S Latest: Source: Bureau of Economic Analysis, REIS 13

15 Millions (2009$s) Erie Goods and Services Production 6,500 6,000 5,500 5,000 4,500 4,000 5,152 Services 5,682 3,500 3,000 2,500 3,215 Goods 2,992 2,000 1,500 Latest: 2014 Source: Bureau of Economic Analysis, REIS 14

16 Index Value (2001=100) Goods and Services Indexes U.S. Services Erie Services Erie Goods U.S. Goods Latest: 2013 Source: Bureau of Economic Analysis, REIS 15

17 Millions of Dollars (Chained 2009$) Erie Goods Production 3,000 Manufacturing Total 2,790 2,500 2,663 2,000 Durable Goods 2,065 2,202 1,852 1,500 1,442 1,000 Non-Durables 500 Ag., Min., & Const Latest: 2014 Source: Bureau of Economic Analysis, REIS 16

18 Millions of Dollars (Chained 2005$) Erie Services Production 3,000 Latest: 2013 Info, Prof, Mgmt, Admin, Other Services 2,500 2,338 2,000 1,500 Government Healthcare & Education 1,000 Real Estate Retail 500 Wholesale & Transportation Utilities 0 1,399 1,297 Finance & Insurance Arts & Accom Source: Bureau of Economic Analysis, REIS 17

19 Per Capita Income ($) Income Per Capita 50,000 40,000 30,000 20,000 % Increase ( ): Erie: 959.9% US: 1,071.7% US Erie 46,049 40,873 39,379 33,518 38,200 33,225 10,000 3,930-3,604 Latest: Source: Bureau of Economic Analysis, REIS 18

20 Real Per Capita Income (2000$) Real Income Per Capita 50,000 45,000 40,000 35,000 % Increase ( ): Erie: 64.3% US: 87.8% US 44,721 42,760 36,567 36,078 46,855 37,590 30,000 25,000 20,000 24,946 22,877 Erie 15,000 10,000 5,000 - Latest: Source: Bureau of Economic Analysis, REIS 19

21 Percentage of U.S. (%) 100 Erie Real Income Per Capita as a % of U.S Latest: Source: Bureau of Economic Analysis, REIS 20

22 Cost of Living Index, 2014 (Annual Averages) Erie, PA Composite Index: = average of 264 U.S. urban areas Components: Grocery Items Housing 83.6 Utilities 91.5 Transportation 95.7 Health care 92 Miscellaneous Source: C2ER, Cost of Living Index Annual Averages

23 % of Total Income of Erie Residents Erie Personal Income Breakdown Earnings Latest: Div, Int, & Rent Proprietorship s Transfers Source: Bureau of Economic Analysis, Local Area Personal Income 22

24 % of Total Income Earnings as a % of Total Income Erie Earnings U.S. Earnings Latest: 2014 Source: Bureau of Economic Analysis, Local Area Personal Income 23

25 % of Total Income Transfers as a % of Total Income Erie Transfers U.S. Transfers 0 Latest: 2014 Source: Bureau of Economic Analysis, Local Area Personal Income 24

26 Transfer Receipts in $ Millions Types of Transfer Payments: Erie 1,400 Latest: ,200 Medical 1, Retirement and Disability Unemployment Insurance Compensation Income Maintenance Other Source: Bureau of Economic Analysis, Local Area Personal Income 25

27 Transfer Receipts in $ Millions Types of Transfer Payments: U.S. 1,200,000 Latest: ,000, ,000 Medical 600,000 Retirement and Disability 400, ,000 Unemployment Insurance Compensation Income Maintenance Other Source: Bureau of Economic Analysis, Local Area Personal Income 26

28 Increasing Global Interdependence 27

29 Jobs Supported by Total Goods Exports, Top 10 States, 2014 Rank State Jobs Supported Share of U.S. All States 7,123, % 1 Texas 1,117, % 2 California 775, % 3 Washington 390, % 4 New York 389, % 5 Illinois 345, % 6 Michigan 270, % 7 Florida 270, % 8 Ohio 263, % 9 Georgia 209, % 10 Pennsylvania 191,779 (3% of PA Empl) 2.7% Source: U.S. Dept. of Commerce, International Trade Administration 28

30 Millions of Jobs Jobs Supported by Exports is Increasing Year Source: U.S. Dept. of Commerce, International Trade Administration 29

31 Exports (In Millions of Chained 2009$) Erie Merchandise Exports 2,000 1,800 1,600 1,400 1,200 Erie 1,305 1,000 1, Latest: Source: International Trade Administration 30

32 Exports (In Millions of Chained 2009$) Merchandise Exports 16,600 Latest: ,600 12,600 10,600 8,600 7,785 Pittsburgh Cleveland 9,782 9,151 7,579 6,600 4,600 2,600 Buffalo 3,795 4,384 1,028 Erie 1, Source: International Trade Administration 31

33 Exports as a % of RGDP Erie Exports as a % of Real GDP Erie Latest: Source: International Trade Administration, Bureau of Economic Analysis 32

34 Top 10 Exporting MSAs, 2014 Rank *Out of 362 MSAs MSA Source: International Trade Administration Exports (in $ millions) 1 Houston; TX 108, New York; NY 96, Los Angeles-Long Beach-Anaheim; CA 68, Seattle; WA 56, Detroit; MI 45, Chicago; IL 43, Miami; FL 34, New Orleans; LA 31, Dallas; TX 26, San Francisco; CA 24, Erie; PA 130 1,

35 The Future 34

36 Growth in Real GDP (%) IMF Forecasts of Growth in Real GDP Ave RGDP growth in G-7 Countries: : 2.14% : 1.38% China U.S. U.K. Euro area Germany G-7 Ave France Canada Italy Japan Source: International Monetary Fund 35

37 U.S. Forecast PNC Bank, Northwest Pennsylvania Market Outlook (October 2015) U.S. Forecast Real GDP Growth (% change) Job Growth (% change) Unemployment Rate (%) Median HH Income (Ths. $) Home price (% change) Single-Fam permits (% change) Mult-Fam permits (% change) 30-Year Fixed Mortgage (%) 2014 (Actual) Annual Data (Forecast) (Forecast) Source: PNC Bank 36

38 Erie, PA Forecast PNC Bank, Northwest Pennsylvania Market Outlook (2015 Q3) Erie Forecast Job Growth (% change) Unemployment Rate (%) Median HH Income (Ths. $) Home price (% change) Single-Fam permits (% change) Mult-Fam permits (% change) 2014 (Actual) Annual Data 2015 (Forecast) (Forecast) Source: PNC Bank 37

39 Issue #18: Fourth Quarter 2015 (data through September 2015) 5/07 2/10 ELI Takes a Break, But Manages to Spread a Little Holiday Cheer Will ELI be naughty or nice after the holiday season? Though it has been rising fairly consistently since 2010 as Erie recovered from the Great Recession along with the national economy, the Erie Leading Index (ELI) has apparently decided to take a holiday break this season from its steady five-year upward climb. ELI has remained stable through the past few quarters and is currently hovering at just below 105. Overall, ELI grew by only 0.11% through the third quarter and even dipped slightly in August before picking back up again. Although this represents a slight improvement compared to the 0.05% growth that ELI saw in the previous quarter, it unfortunately is much less than the 2.0% growth that ELI enjoyed over the course of

40 ERIE Leading Index (2004 = 100) ERIE Leading Index (ELI) /91 6/00 7/03 Erie Total Employment ERIE Leading Index ELI Turning Points Erie Recessions 5/07 2/ Latest: September

41 ELI Components: Manufacturing PA Avg. Weekly Mfg. Hours (SA) Latest: September 2015 Source: Bureau of Labor Statistics, Local Area Unemployment Stats 40

42 ELI Components: Manufacturing Erie County Mfg. Employment (SA) Latest: September 2015 Source: Bureau of Labor Statistics, Local Area Unemployment Stats 41

43 A big THANK YOU to 42

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45 Latest Erie Data! Last updated November 19, 2015 (All data are for Erie County unless otherwise indicated) Change from Change from As of September, 2015: Latest (NSA)* Previous Month Latest (SA)* Previous Month Unemployment Rate (Erie County) 4.8% 0.8% 5.5% 0.0% -Erie City 5.5% 0.9% Millcreek Township 4.2% 0.6% U.S. 4.9% 0.3% 5.1% 0.0% -Pennsylvania 4.9% 0.6% 5.3% 0.1% Labor Force 135, , Employment 128,500 1, , Unemployment 6,500 1,000 7,400 0 *NSA: Not Seasonally Adjusted; SA: Seasonally Adjusted. SA data for Erie City and Millcreek Township are unavailable. Erie, Pennsylvania, and U.S. data provided by PA Department of Labor and Industry. Note: Latest Erie Data are preliminary and subject to revision next month As of September, 2015 Change from Previous Month Manufacturing Employment (NSA) 22,400 0 Change from Prior Year Population, , % from 279,760 Total Personal Income, 2014 $10,636,535, % from $10,428,430,000 Income Per Capita, 2014 $38, % from $37,276 -U.S., 2014 $46, % from $44,438 44

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47 5/07 2/10 Issue #18: Fourth Quarter 2015 (data through September 2015) I invite you to sign up for the s at klouie@psu.edu, or at the bottom of ELI Takes a Break, But Manages to Spread a Little Holiday Cheer Will ELI be naughty or nice after the holiday season? Though it has been rising fairly consistently since 2010 as Erie recovered from the Great Recession along with the national economy, the Erie Leading Index (ELI) has apparently decided to take a holiday break this season from its steady five-year upward climb. ELI has remained stable through the past few quarters and is currently hovering at just below 105. Overall, ELI grew by only 0.11% through the third quarter and even dipped slightly in August before picking back up again. Although this represents a slight improvement compared to the 0.05% growth that ELI saw in the previous quarter, it unfortunately is much less than the 2.0% growth that ELI enjoyed over the course of ELI s anemic performance reflects the recent sluggish pace of growth in Erie total nonfarm employment, which rose on a seasonally adjusted basis by only 1.5% (2,000 jobs) year-on-year in September, and by only 0.54% (700 jobs) in the third quarter. While the rate of employment growth has been less robust than we would have liked to see, the modest improvement means that ELI is still managing to spread a little holiday cheer! However, if the recently announced plans by G.E. and Lord Corp. for possible job reductions locally are realized, Erie manufacturing as well as total employment are expected to decrease in the next several months, unless those anticipated job losses are offset by job gains in other parts of the local economy. We will therefore need to pay careful attention to see if ELI will be naughty or nice next quarter. Of course, our holiday wish is for ELI to hold its ground, based on the strength of its other input components, and continue to point to growth (or at least stability) in overall local employment. Erie s seasonally adjusted unemployment rate in September remained at 5.5%, unchanged since June, and was just slightly higher than the unemployment rate in Pennsylvania (5.3%) and the nation as a whole (5.1%). Economic Research Institute of Erie, Sam and Irene Black School of Business, Penn State Behrend 46

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51 Contact Info Dr. Kenneth Louie, Director Dr. Jim Kurre, Director Emeritus 50