Changing Economic Times Presented to: Market Pulse Bonita Springs Area Chamber of Commerce Bonita Springs-Estero Association of REALTORS, Inc. Dr. Gary Jackson Director, Regional Economic Research Institute Florida Gulf Coast University April 8, 2008
Outline for Presentation National Economic Trends FED Economic Forecasts for 2008 through 2010 Local Economic Trends
National Economic Trends Real GDP (Output measure) Employment Unemployment Initial Unemployment Claims Consumer Prices Consumer Confidence Retail Sales S & P 500 Stock Index Industrial Production Light-Weight Vehicle Sales Housing Starts Mortgage Rates Crude Oil Prices Gasoline Prices
01 Recession 91 Recession 4 th Qtr 0.6 4
Jan -17,000 Feb -63,000 91 Recession 01 Recession
8.0 7.0 6.0 5.0 4.0 3.0 2.0 Source: BLS 7.5 U.S. UNEMPLOYMENT RATE 01 Recession 5.8 5.6 91 Recession 4.0 4.6 4.6 5.0 4.9 4.8 Av. 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 07 Feb 07 Av. 90 Av. 91 Av. 92 Av. 93 Av. 94 Av. 95 Av. 96 Av. 97 Av. 98 Av. 99 Av. 00 Av. 01 Av. 02 Av. 03 Av. 04 Av. 05
400,000 U.S. Weekly Unemployment Claims Initial Claims, SA 380,000 360,000 340,000 320,000 300,000 280,000 2/24/ 3/31/ 5/5/ 6/9/ 7/14/ 8/18/ 9/22/ 10/27/ 12/1/ 1/5/2008 2/9/2008 Source: US Department of Labor
3/4/2008 Florida Weekly Unemployment Claims Initial Claims, SA 21,000 19,000 17,000 15,000 13,000 9,000 11,000 7,000 5,000 3/10/ 4/9/ 5/9/ 6/8/ 7/8/ 8/7/ 9/6/ 10/6/ 11/5/ 12/5/ 1/4/2008 2/3/2008 Source: US Department of Labor
Feb 4.1%
Consumer Confidence Index 120.0 106.9 109.9 110.0 107.0 111.9 110.0 100.0 90.0 80.0 70.0 60.0 102.7 100.2 105.3 Source:Conference Board, http://www.conference-board.org/economics/consumerconfidence.cfm 90.6 87.8 76.4 64.5 Mar 08 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sept 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Index 1985=100 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Feb 08
Jan + 0.3 Feb - 0.6
Feb 1,354.9
Feb - 0.53 91 Recession 01 Recession
Feb 15.38
Interest Rate 9.00 8.00 7.00 6.00 5.00 4.00 Conventional 30 Year Fixed Rate Mortgage Rates Jan 00 Jan 01 Jan Jan Jan Jan Jan 02 03 04 05 06 Month and Year 5.85% for Mar 27th weekly survey Jan 07 Jan 08 Source: Freddie Mac
Federal Reserve System Economic Forecast Real GDP Unemployment Rate Consumer Prices Total Inflation Core Inflation
Growth of Real GDP Percent 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 3.7% 3.2% 3.2% 3.2% 2.9% 3.0 2.6% 2.5% 2.7 2.2% 2.5 2.0% 2.1 2.2% 1.8% 1.3% 1.0% 2003 2004 2005 2006 2008 2009 2010 Year Source:FED,http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20080130.pdf
Unemployment Rate Percent 6.0 5.8 5.6 5.4 5.2 5.0 4.8 4.6 4.4 4.2 4.0 5.8 5.4 4.9 4.8 4.4 5.7 5.5 5.0 5.3 5.3 5.2 5.0 4.9 5.4 4.7 2003 2004 2005 2006 2008 2009 2010 Year 5.1 4.9 Source:FED,http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20080130.pdf
PCE Inflation Percent 4.0 3.5 3.0 2.5 2.0 1.5 1.0 3.4 3.1 3.2 1.9 1.9 2.8 2.0 2.4 2.1 2.3 1.7 2.0 2.0 1.9 1.7 1.7 2003 2004 2005 2006 2008 2009 2010 Year 1.5 Source:FED,http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20080130.pdf
Core PCE Inflation Percent 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 2.2 2.2 2.3 2.2 2.3 1.9 1.4 2.2 2.0 2.2 1.7 2.0 1.7 2.0 1.4 2003 2004 2005 2006 2008 2009 2010 Year 1.9 1.6 Source:FED,http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20080130.pdf
Important Factors For the Economy Oil Shock/Middle East War? Weather (Hurricane?) Inflationary Expectations Productivity Wealth Effects (Housing/Stock Market) Global Economy (Increased demand for oil, raw materials, and increased trade)
Southwest Florida Trends Population Employment Unemployment Airport Passengers Taxable Sales Single Family Permits Median Housing Price and Existing Sales
Florida EDR: http://edr.state.fl.us/conferences/population/demographic.htm, February 2008.
1200 Long-Run Population Growth Projections July, Lee and Collier- Thousands 1000 800 600 400 200 318 549 379 677 440 783 882 498 549 971 1,054 599 0 2005 actual 2010 2015 2020 2025 2030 Collier Lee Source: Florida EDR: Demographic Estimating conference Database, Updated July.
290,000 285,000 280,000 275,000 270,000 265,000 260,000 255,000 250,000 Source: BLS LEE COUNTY EMPLOYMENT 285,182 282,251 283,008 283,138 274,617 279,526 280,392 268,994 273,668 269,271 (P) Jun 07 Jul 07 Aug 07 Sept 07 Oct 07 Nov 07 Dec 07 Jan 08 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sept 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07
156,000 154,000 152,000 150,000 148,000 146,000 144,000 142,000 140,000 Source: BLS COLLIER COUNTY EMPLOYMENT 155,231 153,386 153,536 151,627 150,634 152,567 147,497 145,060 148,899 144,839 (P) Sept 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sept 07 Oct 07 Nov 07 Dec 07 Jan 08 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06
Unemployment Rates SWFL Coastal County Unemployment Rates (%) 2000- Monthly Averages; Most Recent 12 Months Data 8.0 7.0 6.0 5.0 4.0 Charlotte Collier Lee 6.5% 6.1% 4.8% 3.0 2.0 1.0 2000 2001 2002 2003 2004 2005 2006 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08. Feb 08 Source: Florida AWI
Airport Passenger Travel Trends 1200 RSW (SW Florida International) Airport Passenger Traffic Trend Thousands 1000 800 1990 2000 2006 Arrivals plus Departures - 600 400 200 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Local Airport Authorities
Monthly Taxable Sales 2000 to 2000-2006 Monthly Averages; Average of Most Recent 12 Months 1,200 Charlotte / Collier / Lee - Million 1,000 800 600 400 200 Collier Lee 0 2000 2001 2002 2003 2004 2005 2006 Avg Dec06 to Nov07 Monthly Averages for Each Year - 2000 to 2006 Source: Florida Department of Tax Research
1400 1200 1000 800 600 400 200 0 Source: Florida Department of Tax Research Taxable Sales by Month Dec-06 Jan-07 Feb-07 Charlotte / Collier / Lee - Million Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Collier Lee
1600 Single Family Permits Issued Lee County Single Family Permits Issued - Lee County 2000-07 Monthly Averages for Each Year; Most Recent 12 Months Data 1400 1200 Permits Issued 1000 800 600 400 200 0 2000 Av 2002 Av 2004 Av 2006 Av Apr Jun Aug Oct Dec Feb 2008 Source: Local Building and Zoning Departments, included Fort Myers, Cape Coral, and unincorporated Lee County permits
Single Family Permits Issued Collier County Single Family Permits Issued - Collier County 2000- Monthly Averages; Most Recent 12 Months Data 350 300 250 Permits Issued 200 150 100 50 0 2000 Av 2002 Av 2004 Av 2006 Av Apr Jun Aug Oct Dec Feb 2008 Source: Local Building and Zoning Departments; includes unincorporated Collier County permits only.
Lee County Existing Single Family Sales by REALTORS Bar Chart, Scale on the Left Median Housing Price Line Chart, Scale on the Right Lee County Existing Single Family Home Sales by Realtors 1200 $350 1000 800 600 400 200 $300 $250 $200 $150 $100 $50 0 $0 Feb 2006 Mar 2006 Apr 2006 May 2006 Jun 2006 Jul 2006 Aug 2006 Sep 2006 Oct 2006 Nov 2006 Dec 2006 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2008 Homes Sold by Realtors Median Sale Price - Thousands Lee Homes Sold by Realtors Lee Median Sale Price Source: Florida Association of REALTORS, August 05 price estimated, http://media.living.net/statistics/statisticsfull.htm
Collier County Existing Single Family Sales by REALTORS Bar Chart, Scale on the Left Median Housing Price Line Chart, Scale on the Right Collier County Existing Single Family Home Sales by Realtors 250 $700 Homes Sold by Realtors 200 150 100 50 Collier Homes Sold by Realtors Collier Median Sale Price $600 $500 $400 $300 $200 $100 Median Sale Price - Thousands 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2008 $0 Source: Naples Area Board of Realtors (NABOR), www.naplesarea.com
Summary Negative growth or very slow growth the first half to 2008; Continued growth but at a slower pace during the second half of 2008 and 2009 with more normal growth in 2010; Unemployment rates at higher levels during the first half of 2008; Risk of shocks to the economy; Inflation is above the rate desired and is a a concern; Housing recover is not expected until 2009.