HomeMy WebLinkAbout2009-07-21; City Council; 19907; SANDAG presention on the economyCITY OF CARLSBAD - AGENDA BILL
AB# 19,907
MTG. 7/21/2009
DEPT. FIN
PRESENTATION ON ECONOMY FROM
REPRESENTATIVE FROM SANDAG
DEPT. HEAER^gl
CITY ATTY. <§^
CITY MGR.
RECOMMENDED ACTION:
Accept presentation regarding an overview of the national and local economies from Marney
Cox, Chief Economist, SANDAG.
ITEM EXPLANATION:
The United States is experiencing an economic recession. It is important for the City of
Carlsbad to be aware of the economic slow down and the potential impacts on the City of
Carlsbad's finances. The City of Carlsbad has invited Marney Cox, Chief Economist from
SANDAG to present to the City Council his perspective on the national and local economies.
FISCAL IMPACT:
None.
ENVIRONMENTAL IMPACT:
The proposed presentation does not constitute a "project" within the meaning of the California
Environmental Quality Act and, therefore, does not require environmental review.
EXHIBITS:
None.
DEPARTMENT CONTACT: Lisa Irvine 760-602-2430 lisa. irvine(a)ca rlsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION:APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
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CONTINUED TO DATE SPECIFIC
CONTINUED TO DATE UNKNOWN
RETURNED TO STAFF
OTHER -SEE MINUTES
Council received tbe report.
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San Diego’s
Mid 2009 Economic Outlook
Marney Cox, Chief Economist, SANDAG
US W&S Employment Declining
Y-O-Y Change by Month
US Unemployment Rate Rising
US-Retail Sales Up and Down
Y-O-Y Change by Month, M$
US Deflation (Negative Consumer Price Index)
Y-O-Y Percent Change by Month
US Total Federal Public Debt Has Tripled
Y-O-Y Change by Month, M$
US Federal Funds Rate
Reduced to “0 -.25”
US Money Supply is Increasing
YOY Change by Month, $B
US Borrowing from Federal Reserve
(Change Y-O-Y for monthly borrowings, B$)
US Banks-A Balance Sheet Problem
Change in Banks Market Capital In Billions $
SD Decline in Payroll Jobs
Change Y-O-Y by Quarter
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
1991199219931994199519961997199819992000200120022003200420052006200720082009
SD Decline in Payroll Jobs
Change Y-O-Y by Month
-60,000
-50,000
-40,000
-30,000
-20,000
-10,000
0
10,000
20,000
30,000
2006 2007 2008 2009
SD Construction Employment
Stabilizing Trend ?, Change Y-O-Y by Month
-15,000
-10,000
-5,000
0
5,000
10,000
2006 2007 2008 2009
SD Financial Activities Employment
Stabilizing Trend ?, Change Y-O-Y by Month
-6,000
-5,000
-4,000
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
2006 2007 2008 2009
SD Less Venture Capital Funds
Less Fuel for High Tech Jobs, M$ per Year
$0
$500
$1,000
$1,500
$2,000
$2,500
92 94 96 98 '00 '02 '04 '06 '08 10
1Q09
SD Housing-Reverse Wealth Effect
“Great Consumer Contraction”, M$ per year
-$2,500
-$2,000
-$1,500
-$1,000
-$500
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2000 2002 2004 2006 2008
SD Outlook-2009 Industry Talley Sheet
Pluses
Defense
Construction
Health Services
Minuses
Retail Services
High-Tech Clusters
Financial Services
Agriculture
SD Outlook-2009 More Job Losses
Annual Change Payroll Jobs
-20000
-10000
0
10000
20000
30000
40000
50000
60000
90 92 94 96 98 00 02 04 '06 '08
SD Outlook-Rising Unemployment Rate
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
90 92 94 96 98
00 01 02 03
04 05 06 '07 '08 '09
San Diego 6.1%
California 7.2%
United States 5.8%
2008
SD Outlook-Decline in Taxable Retail Sales
Y-O-Y Percent Change, Fiscal Years 09 &10
-10%
-5%
0%
5%
10%
15%
90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 10
SD Outlook-Disinflation
US Deflation, Rate of Change in CPI-U
-1%
0%
1%
2%
3%
4%
5%
6%
7%
91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09
San Diego California United States
US Construction Costs Falling
Change in Producer Prices by Major Construction Inputs, (2003 = 100)
100
150
200
250
300
350
400
450
12/03 12/04 12/05 12/06 12/07
#2 diesel fuel: 75%
Copper and brass mill shapes: 80%
Steel mill products: 70%
Concrete products: 39%
Gypsum products: 26%
Consumer price index: 14%
Dec. 2008
SD New Home Pricing Trends
Single Family Townhomes/ Condominium
$266$265
$318
$318$320
$325
$321
$339$335
$285
$402.88
$415.88
$463.93
$447.81
$461.38
$473.70
$441.20
$486.93
$463.94
$420.28
1,435
1,567
1,512
1,458
1,4101,443
1,457
1,376
1,387 1,473
$250.000
$300.000
$350.000
$400.000
$450.000
$500.000
2006/1 2006/2 2006/3 2006/4 2007/1 2007/2 2007/3 2007/4 2008/1 2008/2
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000$/SQFT PRICE SQFT
2009 Outlook Key Assumptions
“Will Federal Stimulus Programs Generate 2H Growth?”
Deflation Except Wages
Bundles of New Money
Stable Marginal Tax Rates
Low Interest Rates
Economic Stimulus
SD-FIFO & Boost from
Gov’t Construction
US-No Depression
Mid 2009 SD Outlook Summary
“Moving Sideways then Slow Growth”
•Job Losses Ease 2H
•U-Rate Up
•Higher Median Home Prices
•Reverse Wealth Effect
•Declining Retail Sales (FY09)
•Less VC Investment
•Disinflation
•Significant Risks-
San Diego’s
2009 Economic Outlook
Marney Cox, Chief Economist, SANDAG