2018 imperial valley general assembly and economic summit
TRANSCRIPT
Presented by:
Michael Bracken
Managing Partner & Chief Economist
2018 Imperial Valley
General Assembly and
Economic Summit
1
2
1. Registered as Decline to State
2. Advise Both Sides of the Aisle
3. Co-Founder and Member of Board of
Directors of Publicly Traded Community Bank
4. Serve as Economic Development Advisor to SCAG,
Lake Elsinore, Colton, Imperial and Needles
5. Serve as Economist / Market Advisor to Manheim
Automotive, AEG / Goldenvoice, Ferguson Enterprises,
Berkshire Hathaway and Elmore Sports (Owner of
Professional Sports Franchises)
3
Good
• World Economic Growth is Positive
• Oil inventory Steadily Rising ($70 ok, $90 bad)
• International Financial System is solid
Bad
• Geopolitical Issues (North Korea)
• Will Brexit Happen? Any Real Impacts?
• President Trump’s Bark vs. Bite on Trade
15
23
Good • GDP Continues Growth
• Potential Impact from Tax Cuts (Remains to be Seen)
• Job Growth Stable (and Solid)
• Housing Starts Climbing and Strong
Bad • Policy Uncertainty (Trade)
• Labor Shortage (Many Industries)
• Debt ($21.1 Trillion) ($2 Trillion in Last Two (2) Years!)
• Costs of Higher Education and Student Debt
• Income Disparity (“Bernie” May Win???
• Consumer Inflation & Rising Interest Rates
25
26
28
29
$19.36
$11.94
$4.88
$3.65
$2.75
$2.57
$2.56
$2.44
$2.08
$1.92
$1.64
0 5 10 15 20 25
United States
China
Japan
Germany
CALIFORNIA
France
United Kingdom
India
Brazil
Italy
Canada
Gross Domestic Product (GDP) by Nation
(in billions of dollars)
30
31
32
33
Imperial
County
United
States
San
BernardinoRiverside Ventura San Diego California Orange Los Angeles
Series1 5.01 5.57 5.66 6.25 7.11 8.16 8.21 8.82 9.79
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Mu
ltip
lie
r o
f H
H I
nc
om
e /
Me
dia
n H
om
e P
ric
e
Housing Affordability Index (Median Home Price /
Median Household Income)
34
36
37
May-16 May-17 May 18
Full Employment (Automation on Rise)
Minimum Wages Increasing (Automation on Rise)
Housing Shortage Across Most of State (Record Prices)
Wall?
Unsustainable Costs from Public Safety and Prisons
Drought (Quickly) Returning (Do We Ever Learn?)
38
40
1.200
1.400
1.600
1.800
2.000
2.200
YR 2006 YR 2007 YR 2008 YR 2009 YR 2010 YR 2011 YR 2012 YR 2013 YR 2014 YR 2015 YR 2016
Va
lue
in
Bil
lio
ns
of
$
Includes both Livestock & Crops
Total Production: 2,154 MW
State Ranking: 2nd (By County)
County is ½ of 1% of State Population, 8% of
Renewable Production
44 Total Projects • Geothermal: 20 / 718 mw
• Small Hydro: 8 / 93 mw
• Solar (PV): 15 / 1078 mw
• Wind: 1 / 265 mw
41
42
YearFY 03-
04
FY 04-
05
FY 05-
06
FY 06-
07
FY 07-
08
FY 08-
09
FY 09-
10
FY 10-
11
FY 11-
12
FY 12-
13
FY 13-
14
FY 14-
15
FY 15-
16
FY 16-
17
FY 17-
18
Series1 7.073 7.326 7.969 8.64 10.298 11.206 10.965 10.789 10.5 10.582 11.23 11.65 12.4 12.7 12.98
4
5
6
7
8
9
10
11
12
13
14
Va
lua
tio
n i
n B
illi
on
s o
f $
43
$30,000
$32,000
$34,000
$36,000
$38,000
$40,000
$42,000
$44,000
YR
2005
YR
2006
YR
2007
YR
2008
YR
2009
YR
2010
YR
2011
YR
2012
YR
2013
YR
2014
YR
2015
YR
2016
An
nu
al
Do
lla
rs
44
12.00%
14.00%
16.00%
18.00%
20.00%
22.00%
24.00%
26.00%
28.00%
30.00%
YR
2003
YR
2004
YR
2005
YR
2006
YR
2007
YR
2008
YR
2009
YR
2010
YR
2011
YR
2012
YR
2013
YR
2014
YR
2015
YR
2016
YR
2017
YR
2018
(4/18)
45
44,000
49,000
54,000
59,000
64,000
69,000
YR
2004
YR
2005
YR
2006
YR
2007
YR
2008
YR
2009
YR
2010
YR
2011
YR
2012
YR
2013
YR
2014
YR
2015
YR
2016
YR
2017
YR
2018
(4/18)
Total Persons Employed
46
$44,819
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
An
nu
al
Pa
y
47
0
1000
2000
3000
4000
5000
6000
7000
8000
Job
Co
un
t
2015 2016 2017
48
Supervisor:
Correctional
Officers
(150)
General and
Operations
Managers
(180)
Registered
Nurses (220)
Correctional
Officers
(300)
Elementary
School
Teachers
(220)
Sales
Representati
ves (Non
Technical)
(180)
Supervisors:
Office/Admi
n (130)
Series1 $90,848 $81,326 $79,759 $73,378 $73,196 $49,977 $44,915
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
An
nu
al
Pa
y i
n $
Projected High Growth Occupations 2014-2024
(100+ Jobs, Wages $40,000/yr+)
49
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
$260,000
$280,000
YR 2004 YR 2005 YR 2006 YR 2007 YR 2008 YR 2009 YR 2010 YR 2011 YR 2012 YR 2013 YR 2014 YR 2015 YR 2016 YR 2017 YR 2018
(4/18)
Pri
ce
in
$
Imperial County, CA Median Home Price
50
100
300
500
700
900
1100
1300
1500
1700
YR
2004
YR
2005
YR
2006
YR
2007
YR
2008
YR
2009
YR
2010
YR
2011
YR
2012
YR
2013
YR
2014
YR
2015
YR
2016
YR
2017*
To
tal
Ne
w H
om
es
So
ld
New Home Sales 2004-2017*
51
0
1
2
3
4
5
6
7
8
9
YR 2006 YR 2007 YR 2008 YR 2009 YR 2010 YR 2011 YR 2012 YR 2013 YR 2014 YR 2015 YR 2016 YR 2017
Housing Affordability Index
(Median Home Price / Median Income)
52
Imperial
County
United
States
San
Bernardin
o
Riverside Ventura San Diego California OrangeLos
Angeles
Series1 5.01 5.57 5.66 6.25 7.11 8.16 8.21 8.82 9.79
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Mu
ltip
lie
r o
f H
H I
nc
om
e /
Me
dia
n H
om
e P
ric
e
Housing Affordability Index
(Median Home Price / Median Household Income)
53
Less than
9th Grade
Some High
School, No
Diploma
High
School
Grad (or
GED)
Some
College,
No
Degree
Associate'
s Degree
Bachelor's
Degree
Master's
Degree
Profession
al School
Degree
Doctorage
Degree
2016 19.94% 13.12% 22.24% 25.02% 6.80% 9.18% 2.99% 0.54% 0.17%
2017 19.88% 13.51% 22.11% 24.54% 6.02% 9.81% 3.23% 0.75% 0.16%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
% o
f A
du
lts
Att
ain
ing
Educational Attainment (Adults 25+)
54
YR 2005 YR 2006 YR 2007 YR 2008 YR 2009 YR 2011 YR 2013 YR 2014 YR 2015 YR 2016
<HS $15,959 $16,642 $16,201 $11,836 $15,047 $14,634 $13,259 $17,201 $15,689 $15,758
HS $23,643 $22,684 $24,936 $21,894 $22,678 $26,458 $26,688 $25,066 $27,397 $27,678
ALL $25,396 $27,048 $26,340 $26,638 $25,889 $27,987 $27,356 $26,546 $27,458 $27,733
Some College/ AA $35,093 $32,347 $31,889 $30,463 $27,809 $35,527 $31,497 $27,482 $32,777 $31,083
BA/BS $41,605 $46,930 $41,850 $42,414 $41,235 $50,982 $52,546 $46,414 $45,408 $46,119
Post Grad/Prof $61,543 $46,006 $70,161 $62,445 $61,494 $73,281 $69,498 $73,938 $69,661 $70,236
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
An
nu
al
Ea
rn
ing
s i
n $
Earnings by Educational Attainments (Adults 25+)
55
YR 1990
Census
YR 2000
Census
YR 2005-
09 ACS
YR 2006-
10 ACS
YR 2008-
10 ACS
YR 2011
ACS
YR 2012
ACS
YR 2013
ACS
YR 2014
ACS
YR 2015
ACS
YR 2016
CR
All Persons 23.8 22.6 21.2 19.6 22.6 22.7 23.2 23.3 23.7 23.4 24.6
Under 18 31.1 28.9 27.2 28.3 29.9 32.8 32.8 31.3 30.1 31.2 34
19
21
23
25
27
29
31
33
% o
f P
ers
on
s/
Ch
ild
ren
Percentage of Residents Below Poverty Line
Poverty Rates Slowly Rising
Water Wars (Continuing)
Regulation DRIVING Ag Elsewhere
Need for Stability of Regional Leadership
Rising Interest Rates (Many Barely
Making It)
Job Quality / Opportunity to Advance in
Fast Paced Economy
56
Affordable Land / Buildings / Housing
Water & Energy (Local Control)
Housing Affordability
Land & Labor Availability
57
Economy Booming in Coastal Communities
Boom = Push East
Inland Empire NOW Expensive (Yes Really!)
Small Businesses / New Businesses NEED
Affordable location& Market Opportunity
Growth will Come FROM West and Northwest
(Leapfrogging I.E. in Some Cases)
58
2018 = 250 New Homes Built (maybe 350)
Unemployment Stable (Historic Lowes of 15%)
Agriculture Continues March of Automation
Trade War = Uncertainty
More Solar/Geothermal Coming (Look for Ramp-
up 2019-20 with Generation Goal of 2022-2025
59
Development Management Group ,Inc. economic development fiscal & economic analysis
41-625 Eclectic Street, Suite D-2 Palm Desert, CA 92260
Office: (760) 346-8820 * Mobile: (760) 272-9136 Fax: (760) 346-8887
[email protected] www.dmgeconomics.com
@Brackenomics 60