Inland Empire International Trade Economic Forecast

Transcription

1 Inland Empire International Trade Economic Forecast Mira Farka Adrian Fleissig Institute for Economic and Environmental Studies Orange County / Inland Empire Regional SBDC Network California State University, Fullerton 17 November 2011

2 Main Topics The Big Picture Global Economic Trends Exports as a source of Growth Inland Empire Economy and International Trade Inland Empire Exports: Analysis and Forecasts Exports by Countries and Regions Exports by Sector Data and Methodology

3 Inland Empire: Quick Facts Area: Largest MSA in US Population: 13 th MSA in US; 3 rd MSA in CA As a separate state, ranks 27 th on population, ahead of Oregon GMP (Gross Metro Product): 25 th in US and 5 th in CA As a separate country, ranks 57th in world based on GDP, ahead of Vietnam Exports: 40 th in US (top 10%); 5 th in CA Exports: 5.2% of region s economic activity Exports grew on average by 18% over

4 Inland Empire Export Profile (2009, billions and shares of total) Largest trading partners Canada ($1.0 billion; 19% of total) Mexico ($0.85 billion; 16% of total) Largest trading Areas NAFTA ($1.9 billion; 35% of total) Asia ($1.4 billion; 27% of total) EU ($1.3 billion; 24% of total) Largest Exports by Sector Computer & Electronic Products ($1.06 billion; 20% of total) Miscellaneous Manufacturing ($1.04 billion; 19% of total) Transportation Equipment ($0.7 billion; 13% of total)

5 Global Economic Trends and International Trade

6 Global GDP in 2050: A Different World 60,000 (adjusted for purchasing power parity) 56,785 50,000 40,000 30,000 20,000 41, ,061 35,288 10,000 9,772 7,641 0 China India US EU Brazil Japan

7 Strength in Numbers: Share of Global Middle Class Population by % 60% 50% 40% 30% 20% 10% 28% (% of world middle class population) 54% 66% % 22% 14% 18% 10% 7% 0% Asia Pacific Europe North America

8 Majority of Spending by the Middle Class Will Come from Asia 70% (% of spending based on 2009 PPP dollars) 60% 50% 40% 30% 20% 23% 42% 59% % 29% 26% 20% 17% 10% 10% 0% Asia Pacific Europe North America

9 World Volumes have Risen Sharply Vastly Exceeding Growth in World GDP 14,000 (Index; 1960=100) 12,000 10,000 8,000 6,000 4,000 World GDP World Trade 2,

10 50% 45% 40% 35% 30% 25% 20% 15% Export Contribution to GDP is Large in Main Economies, but not in the US 47% 46% (exports as % of GDP) 40% 38% 27% 20% 18% 12% 10% 5% 0% Germany Asia EU China UK India Japan US

11 Exports Have Potential to Drive US Growth (percent contribution to GDP growth, 2010) Consumption 44% Gov. 5% Business Investment 65% Exports 48%

12 Inland Empire Economy and International Trade

13 Inland Empire s Role in International Trade Has Grown, but Imports Dominate (total volumes, billions of dollars) Exports Imports

14 Los Angeles-Long Beach- Santa Ana San Jose-Sunnyvale-Santa Clara San Francisco-Oakland- Fremont San Diego-Carlsbad-San Marcos Riverside-San Bernardino- Ontario Sacramento--Arden-Arcade-- Roseville Oxnard-Thousand Oaks- Ventura Inland Empire is the 5 th Largest El Centro 3,502 2,484 1,993 5,356 Exporter in CA (level, millions, 2009) 13,419 16,040 21,406 51, % of GDP 14.4% of GDP 5.0% of GDP 7.9% of GDP 5.2% of GDP 3.8% of GDP 7.2% of GDP 43.6% of GDP Bakersfield Fresno 1,778 1, % of GDP 5.7% of GDP 0 10,000 20,000 30,000 40,000 50,000 60,000

15 Exports Support a Large Number of Jobs Nationally and Locally (thousands of employees) Region Jobs U.S. Total 9,200 U.S. Manufacturing 5,300 CA Total 1,560 CA Manufacturing 616 SoCal Total 500 Inland Empire Total 90

16 Exports Can be an Important Factor in Supporting the Recovery Every $1 billion increase in exports supports 5,000 jobs 22% of manufacturing jobs are supported by exports Exporting jobs: Pay 15% higher wages than non-exporting jobs Offer 11% higher benefits than non-exporting jobs Exporting businesses are: 20%-30% more productive than non-exporting firms Experience 20% more job growth than non-exporting firms 25% less likely to fail than non-exporting firms

17 Before the Crisis, Inland Empire Manufacturing Labor Force Rose Dramatically 2,200,000 (level, thousands of employees) 130,000 2,000,000 1,800,000 1,600,000 1,400,000 California Inland Empire 120, , ,000 90,000 1,200,000 80,000 1,000,000 70, Cal State 2010 Fullerton

18 Trade-Related Jobs Suffered Most from Recession, But have already Started to Pick Up (level, thousands of employees) Construction M anufacturing Prof. & Business Services Retail Trade Leisure & Hospitality Financial Activities W holesale Trade Government Logistics Food & Beverage Educational & H ealth -62,200-37,300 Job Gains in ,900 Job losses in recession -18,700-5,500-11,200-1,100-9,700-8,400-4,400-7, ,800-1,700 2,500 2, ,100 6,000 3,600 1,900 8,100-80,000-60,000-40,000-20, ,000

19 Inland Empire Relies Heavily on Blue Collar Work (% of Adults with High School or Less Diploma) Im perial San B ernardino Riverside Los Angeles Ventura 36% 47% 45% 49% 58% Orange 35% San Diego 34% 0% 10% 20% 30% 40% 50% 60% 70%

20 Inland Empire Household Median Income is amongst the Lowest in SoCal (household median income, level) Orange Ventura San Deigo California Los Angeles Riverside 60,103 58,925 56,375 55,151 71,735 71,246 San B ernardino 52,137 Im perial 37, ,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

21 Export-Related Industries have Low Training Barriers and High Pay (level, average salary) Sector Average Salary Mining $55,910 Wholesale Trade $50,660 Construction $47,470 Manufacturing $45,680 Logistics $43,400 Administrative $34,140 Retail Trade $28,980 Agriculture $25,530 Accommodation and Food $22,440

22 Inland Empire is well Positioned to Expand Exports since it has over 4,000 Manufacturing Firms Sector Jobs Businesses Average Salary Fabricated Metal 11, ,038 Misc. Manufacturing 8, ,965 Plastic & Rubber 8, ,002 Food 7, ,890 Transportation Equipment 5, ,852 Machinery 5, ,967 Chemicals 5, ,924 Computer & Electronics 4, ,531

23 Inland Empire Merchandise Exports Forecasts and Analysis

24 Inland Empire Total Export Volume: 7,000 6,000 5,000 4,000 3,000 2,000 Historical Data (millions of dollars) 4,971 6,241 5,356 1, Cal State 2008Fullerton

25 Inland Empire Total Export Volume: 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 Forecasts (millions of dollars) 6,316 7,034 7,825 8,992 2,000 1,

26 30% 25% 20% 15% 10% 5% 0% -5% -10% Inland Empire Exports Growth 15.6% Historical Data (percent change, y-o-y) 11.1% 18.6% 25.6% -15% -20% -14.2%

27 Inland Empire Exports Growth 30% 25% 20% 15% 10% 5% 0% -5% 15.6% 11.1% Forecasts (percent change, y-o-y) 25.6% 18.6% 17.9% 11.4% 11.2% 14.9% -10% -15% -14.2% -20%

28 Inland Empire Exports by Country

29 25,000 Inland Empire Top Trading Partners are Similar to CA (CA exports, millions of dollars, 2010) 20,000 20,949 16,198 CA Exports by Country 15,000 12,469 12,180 10,000 5,000 8,027 6,757 6,518 5,122 4,181 4,126 - Mexico Canada China Japan South Korea Hong Kong Taiwan Germany United Kingdom Netherlands

30 Inland Empire Exports: Top 5 Countries ( 2009 levels, millions of dollars) Country Year 2009 Canada 1,006 China 305 Japan 290 Netherlands 595 Mexico 852 Rest of World 2,305 43% Canada 1,006 19% Netherlands % China 305 6% Japan 290 5% Rest of World 2,305 Mexico %

31 110% 90% 70% 50% 30% 10% -10% -30% -50% Inland Empire Export Growth Top 5 Countries (percent change, y-o-y) 32.8% 25.6% 11.5% % 15.1% 10.3% -6.5% -13.7% 12.7% -15.1% 26.5% -26.7% 45.4% 96.1% 26.6% -1.1% -3.9% 19.0% 4.3% 43.0% Canada China Japan Netherlands Mexico

32 Inland Empire Export Shares have Evolved (% of Total Volumes) 30% 25% 20% 15% 10% 5% Canada Mexico 0%

33 1,800 1,600 1,400 1,200 1, ,184 Inland Empire Export Forecasts Top 5 Countries 1,382 1,488 1,705 (level, millions of dollars) , ,151 1, Canada China Japan Netherlands Mexico

34 Inland Empire Exports by Region

35 2,000 1,800 Inland Empire Exports by Region ( 2009 levels, millions of dollars) 1,860 1,600 1,400 1,200 1, ,449 1, NAFTA Asia European Union South America OPEC Africa

36 Inland Empire Export Growth by Region (percent change, y-o-y) Year Africa Asia European Union NAFTA OPEC South America % 11% 15% 18% 56% 69% % 25% 27% 29% 16% -8% % -16% -18% -11% 9% -30%

37 Inland Empire Exports to NAFTA and Asia: History and Forecasts 3,500 (levels, millions of dollars) 3,000 2,500 2,000 1,500 1,000 Asia 1,860 NAFTA 1,449 3,068 2, Cal State 2013 Fullerton

38 Inland Empire Exports to European Union: History and Forecasts 2,400 (levels, millions of dollars) 2,000 1,600 1, ,290 1,402 1,665 1,827 2,

39 Inland Empire Exports by Sector

40 Inland Empire Exports by Sector (2009 levels, millions of dollars) Computer & Electronic Product Miscellaneous 1,062 1,042 Transportation Equipment Other Sectors Machinery Chemical Fabricated Metal Product Food Electrical Equipment & Appliance Primary Metal Plastics and Rubber Beverage and Tobacco 89 Apparel ,000 1,200

41 Inland Empire Sector Exports are Similar to CA and are Concentrated in Manufactured Equipments (2010, millions of dollars) COMPUTER AND ELECTRONIC 43,064 MACHINERY TRANSPORTATION EQUIPMENT CHEMICALS MISCELLANEOUS AGRICULTURAL FOOD WASTE AND SCRAP ELECTRICAL & APPLIANCES 14,492 12,964 11,574 11,507 9,354 7,375 5,376 3,976 CA Exports by Sector PETROLEUM & COAL 3,686 FABRICATED METAL 3,564 PLASTICS & RUBBER 2,461-5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

42 1,500 Inland Empire Exports Top 5 Sectors (millions of dollars) , , ,062 1, ,052 1, Transportation Equipment Computer & Electronic Product Miscellaneous Chemical Machinery

43 Inland Empire Exports Growth by Sector (percent change, y-o-y) Year Transportation Equipment Computer & Electronic Product Miscellaneous Chemical Machinery Beverage and Tobacco % 21.0% 20.1% 19.8% 8.5% 21.1% 21.2% % 9.6% 27.4% 14.5% 1.8% 2.0% 1.2% % 1.9% -0.9% -0.4% -12.6% 18.9% 20.3% Year Fabricated Metal Product Electrical Equipment & Appliance Apparel Plastics and Rubber Products Primary Metal Other Sectors Food Inland Empire Total % 17.7% 20.3% 19.2% 15.7% 22.6% 18.6% % 34.2% 9.1% 19.8% 53.8% 18.5% 25.6% % -23.4% 7.4% -7.3% -40.4% -16.8% -14.2%

44 2,000 1,800 1,600 1,400 1,200 1, Inland Empire Export Forecasts Top Sectors (level, millions of dollars) Transportation Equipment Computer & Electronic Product Miscellaneous Manufacturing 1,062 1, ,766 1,717 1,

45 2,000 1,800 1,600 1,400 1,200 1, Inland Empire Export Forecasts Top 5 Sectors 1,717 1, ,316 1,213 1, Transportation Equipment Computer & Electronic Product Miscellaneous Chemical Machinery

46 Methodology e( x) = ( b a = ( b xa) e( x) = b xa i i T 2 i x) 2 ( b xa)

47 Methodology Regional, State, National International data Exchange rates Labor productivity U.S. growth (RGDP) Foreign growth (RGDP) Exports by industry Statistical & econometric modeling Nonlinear regression System of equations Model validation

48 Measures of Trade Data Origin-of-Movement (OM) Based on Origin State merchandise starts its journey to the port of export Exporter Location (EL) ( previous data) Based on zip code of the exporter & captures company headquarters, wholesalers, brokers, and freight forwarders Customs District and Port Data Measure goods leaving district or port (regardless of where good originated in U.S.)

49 International Trade Administration U.S. Dept. of Commerce Data Availability Individual countries Trade and economic groups Geographic regions Product type and industry National Trade Data State Export Data U.S. Metro Area

50 Questions? Mira Farka Adrian Fleissig