the southeastern states: recent performance and prospects for recovery

Copyright 2002 Global Insight, Inc.

The Southeastern States: Recent Performance and Prospects for

Recovery

Phil HopkinsPrincipal, US Regional Services

[email protected]

2Copyright 2002 Global Insight, Inc.

Macro Effects on Regions & States

Investment-Led Recession – Mfg. Decline Started in the Midwest, Spread to the Coasts

High Tech Collapse Hit High-Growth States Hard

World Economy is Slow – No Help from Abroad

Jobless Recovery

State Budgets in Deficit - $70 to $90 Billion – partially offset Federal Stimulus 43 States With Budget Deficits


Macro Effects on Regions & States

State Tax Revenues Still Stagnant

Stock Market Crash – Wealth Effects Hit High-Growth States Hard – CA, VA, FL, CO, MA, IL, NV, NY

Increase in Defense Spending Benefits Sun-Belt States – MS, GA, CA, TX, VA

Excess Capacity Remains


Mfg. % of Total Employ. (SIC, 2002)

15.4 to 20.411.4 to 15.4

8.5 to 11.40.4 to 8.5


Historic Economic Trends


Why Did the SE States Grow?

Shift-Share: Decompose regional growth into 3 Effects: National Growth; Growth in US Economy Industry Mix - % Shares of high-growth and slow-growth

sectors as defined at the US level Competitive Effects: individual sectors in region grow faster

than same sectors at US Level

Results SE Region: 1990 to 2002 Employment Change 72% of Employment Growth 1990 to 2002 due to Growth in

US economy -5.8% due to Industry Mix (too many slow growth industries 33.2% due to Competitive Effect (SE sectors grew faster

than same sectors as US level


Personal Income Growth

0201

0099

9897

9695

9493

9291

9089

8887

8685

8483

15.0%

12.0%

9.0%

6.0%

3.0%

0.0%

15.0%

12.0%

9.0%

6.0%

3.0%

0.0%

% C

ha

ng

e Y

ea

r A

go

% C

ha

ng

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ea

r Ag

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Southeastern States US


Per Capita Personal Income

0201

0099

9897

9695

9493

9291

9089

8887

8685

8483

8281

80

$35000

$30714

$26429

$22143

$17857

$13571

$9286

$5000

$35000

$30714

$26429

$22143

$17857

$13571

$9286

$5000

Per C

apita

Pers

onal

Inco

me

Per C

apita P

erso

nal In

com

e

Southeastern States US SA & ESC Census Regions


Real Wage Per Worker

0201

0099

9897

9695

9493

9291

9089

8887

8685

8483

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

-2.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

-2.0%

% C

han

ge

Yea

r A

go

% C

han

ge Y

ear Ago



Manufacturing Employment

0201

0099

9897

9695

9493

9291

9089

8887

8685

8483

15.0%

12.0%

9.0%

6.0%

3.0%

0.0%

-3.0%

-6.0%

-9.0%

15.0%

12.0%

9.0%

6.0%

3.0%

0.0%

-3.0%

-6.0%

-9.0%

% C

han

ge

Yea

r A

go

% C

han

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ear Ag

o

Non-Durable SE States Durable SE StatesNon-Durable US Durable US


Growth in Real GSP/GDP per Worker

0201

0099

9897

9695

9493

9291

9089

8887

3.6%

3.0%

2.4%

1.8%

1.2%

0.6%

-0.0%

-0.6%

-1.2%

3.6%

3.0%

2.4%

1.8%

1.2%

0.6%

-0.0%

-0.6%

-1.2%

% C

han

ge

Yea

r A

go

% C

han

ge Y

ear Ag

o



Growth in Housing Starts

0201

0099

9897

9695

9493

9291

9089

8887

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

-20.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

-20.0%

% C

han

ge

Yea

r A

go

% C

han

ge Y

ear Ago



Services-Producing & Construction Employment Changes

0201

0099

9897

9695

9493

9291

9089

8887

8685

8483

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

% C

han

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Yea

r A

go

% C

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Priv. Services-producing SE Construction SEPriv. Services-producing US Construction US


Employment Cycles- FL, GA, and US

-3

0

3

6

9

1980 1983 1986 1989 1992 1995 1998 2001 2004

Georgia Florida United States


Recent Economic Performance


% Change in Goods Providing Employment March 01 – February 03

-7.5 to 0.8-9.2 to -7.5

-10.9 to -9.2-16.2 to -10.9


% Change in Service Providing Employment March 01 – February 03

0.9 to 4.0-0.1 to 0.9-0.9 to -0.1-3.4 to -0.9


% Change in Total Employment – March 01 - February 03

-0.4 to 3.0-2.0 to -0.4-2.7 to -2.0-4.4 to -2.7


Employment Change in SE States March 2001 to February 2003

State Goods Services Total

Alabama -41,400 -6,100 -47,500Florida -37,000 69,400 32,400

Georgia -62,400 -39,600 -102,000Mississippi -20,300 9,000 -11,300

North Carolina -135,500 -12,500 -148,000South Carolina -47,700 900 -46,800

Tennessee -67,600 -5,300 -72,900

Total SE States -411,900 15,800 -396,100Total US -2,355,800 -613,000 -2,969,000

SE % of US 17.5% -2.6% 13.3%


February 2003 Conditions

Total Employment (SA) Unemployment% Change Year Ago Rate (SA)

Alabama -0.66% 5.50%Florida 1.53% 5.20%

Georgia -0.25% 4.50%Mississippi 0.12% 6.00%

North Carolina -0.72% 5.80%South Carolina 0.53% 6.20%

Tennessee -0.08% 4.70%US -0.22% 5.68%


2002 Values for Selected SE MSAs

MSA

Per Capita Income

Real Output per worker

Real wage per worker

Atlanta 34,000 73,800 41,900 Augusta 24,700 64,500 28,500

Biloxi 24,900 55,500 29,900 Birmingham 29,200 58,100 33,300 Charleston 25,900 57,200 29,800

Charlotte 31,600 75,200 35,400 Columbia 28,700 63,300 30,100

Greenville 26,200 58,100 30,200 Huntsville 29,200 57,200 35,100


2002 Values for Selected SE MSAs

MSA

Per Capita Income

Real Output per worker

Real wage per worker

Jackson 28,600 60,000 30,300 Johnson City 23,400 62,600 24,900

Knoxville 28,000 59,900 29,500 Miami 26,800 66,600 34,000

Mobile 24,000 56,000 27,400 Nashville 32,800 63,600 33,900

Orlando 27,100 61,900 30,600 Raleigh 33,800 64,600 37,800 Tampa 29,300 64,400 30,700


Housing Trends


9.5 to 15.76.8 to 9.55.5 to 6.83.5 to 5.5US +6.5%

Median Housing Price Growth1999-2002


2.2 to 3.72.0 to 2.21.7 to 2.01.4 to 1.7

Median Price of Single Family Home Over Average Household Income – 2002q2


0.69 to 1.610.47 to 0.690.39 to 0.470.08 to 0.39

Housing Starts/Population 2002


% Change Year Ago Housing Starts by State – 2002q4

26.0 to 163.010.0 to 26.02.0 to 10.0

-14.0 to 2.0


Regional Housing Start Trends

Housing Start Rate % Change Census Region Rate in 2002q4 from 2001q4

New England 43.84 1.41%Middle Atlantic 114.84 11.41%South Atlantic 502.73 7.17%

East North Central 241.50 3.88%East South Central 81.97 1.38%West North Central 108.84 10.20%West South Central 197.72 7.45%

Mountain 194.87 5.72%Pacific 222.46 7.83%

US 1,708.78 7.07%


South Atlantic Housing Trends

020100999897

30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

% C

han

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ear

Ago

% C

han

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ear A

go

Housing Starts, Income and Interest Rate TrendsSouth Atlantic Census Region

Effective US Mortgage Rate - New HomesHousing StartsAverage Personal Income per Household


Housing Trends – Selected MSAs

Housing Avg. Sales Price % Increase Avg. Price Affordability Existing SF Home Existing SF Home

MSA Ratio Home 1992q2 to 2002q2

Atlanta 208.4 206,400$ 74.1%Augusta 250.6 123,700$ 30.5%

Biloxi 243.1 120,300$ 68.6%Birmingham 228.4 153,300$ 78.0%Charleston 161.5 196,400$ 79.2%

Charlotte 214.2 178,200$ 75.1%Columbia 230.5 151,200$ 55.3%

Greenville 216.7 138,500$ 57.1%Huntsville 231.4 139,200$ 40.4%


Housing Trends – Selected MSAs

Housing Avg. Sales Price % Increase Avg. Price Affordability Existing SF Home Existing SF Home

Ratio Home 1992q2 to 2002q2

Jackson 283.9 123,100$ 57.7%Johnson City 214.9 93,800$ 73.8%

Knoxville 211.8 143,200$ 75.9%Miami 161.8 218,700$ 77.9%

Mobile 207.7 133,800$ 77.6%Nashville 213.9 176,200$ 76.7%

Orlando 194.7 170,600$ 54.3%Raleigh 194.4 198,400$ 55.2%Tampa 207.8 159,600$ 69.2%


Travel and Tourism


Reliance on Travel & Tourism

7.5 to 28.96.3 to 7.55.7 to 6.33.9 to 5.7

% Employment in Travel & Tourism Industries in 2000


Annual Growth in Travel & Tourism Employment 1995-2000

3.31 to 4.542.52 to 3.311.78 to 2.52

-1.10 to 1.78


Foreign Travel has Fallen

-21

-14

-7

0

7

14

Canada Mexico SouthAmerica

Europe Asia MiddleEast

2000 2001 2002

% Change in Visitor Arrivals


Global Insight’s Spring 2003 Forecast for the Southeastern States


Total Employment Growth Rate2002 to 2007

1.3 to 3.31.0 to 1.30.8 to 1.00.4 to 0.8


Personal Income Growth Rate 2002 to 2007

5.1 to 6.64.7 to 5.14.2 to 4.73.4 to 4.3


Housing Start Growth Rate2002 to 2007

1.0 to 5.60.1 to 1.0

-1.6 to 0.1-5.6 to -1.6


Real GSP Growth Rate2002 to 2007

3.4 to 5.22.8 to 3.42.4 to 2.80.9 to 2.4


Competitive Advantages Remain and Will Re-Assert Themselves

Identifying and Nurturing Industry Clusters

Education Matters at All Levels

Cost Advantages for All Types of Infrastructure and Utilities

Access to Research and Capital a Key

Quality of Life Key to Attracting Creative Workers and Companies Needing Them

Steps To Economic Recovery


When Will Employment and Investment Recover?

Public/Private Ventures, Especially in University MSAs

Keeping the Consumer Spending

State Government Budgets In Balance

Use of Selected, Prudent Economic Incentives

Steps To Economic Recovery

the southeastern states: recent performance and prospects for recovery

Documents

employment growth

national growth growth

regional growth

slowgrowth sectors

se states

slow growth industries33

total employment

highgrowth states hard