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Ten Years of Change in the Humboldt County Economy

Ten Years of Change in the Humboldt County Economy. Prof. Erick Eschker and Jessica Digiambattista. The Index of Economic Activity for Humboldt County. Celebrating 10 Years--The Index of Economic Activity for Humboldt County. Professor Erick Eschker, Chair of the Department of Economics

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Ten Years of Change in the Humboldt County Economy

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  1. Ten Years of Change in the Humboldt County Economy Prof. Erick Eschker and Jessica Digiambattista The Index of Economic Activity for Humboldt County

  2. Celebrating 10 Years--The Index of Economic Activity for Humboldt County • Professor Erick Eschker, Chair of the Department of Economics • Jessica Digiambattista, student assistant editor • Garrett Perks and Andrea Walters, student assistant analysts • Founded by Prof. Steve Hackett and Prof. Tim Yeager • Six previous student assistants

  3. Thanks to Humboldt Bank for use of these great facilities!

  4. Our Sponsoring Business Partners: • Coast Central Credit Union Dean Christensen, President, and Dennis Hunter, Vice President of Marketing. Representing Coast Central Credit Union today are Matt Dennis, Executive Vice President and Jim Sessa, Vice President and Chief Financial Officer

  5. Our Sponsoring Business Partners: • Humboldt Bank Martha Traphagen, Senior Vice President and Area Manager

  6. Our Sponsoring Business Partners: • North Coast Small Business Development Center Kristin Roach-Johnson, Executive Director

  7. Our Sponsoring Business Partners: • Six Rivers Bank Russ Harris, President and Chief Executive Officer

  8. Thanks to our Data Providers!

  9. What is the Index? • The only monthly source of broad-based economic indicators for Humboldt County • Extremely timely--most data are from the previous month • Leading indicators • Data since January 1994

  10. What is the Index? Tracks six sectors of the economy: • Home sales • Retail sales • Energy consumption • Occupancy rates at hotels/motels/inns • Employment • Lumber manufacturing

  11. What does an Index tell us? • Seasonally adjusted--Units are not dollars • Index numbers are relative to the base period (January 1994=100) • Useful for determining percent change • Dow Jones Industrial Average example

  12. Readership www.humboldt.edu/~indexhum/ • Available about the 5th of each month • Steady growth in readership • 95% of readers from outside HSU • E-mail us to join our mailing list

  13. Index Budget

  14. Index projects in 2003-2004 • New website • New layout • Local Spotlight interviews • Gasoline prices in Humboldt County

  15. Potential projects • Housing sales predictor • Form “historical” Index back to 1960 • Expansion of retail sector • New service sector Depends upon continued support from existing and new sponsors!

  16. Demographic Changes According to the U.S. Census Bureau: • Humboldt County population has grown 6.2 percent from 1990 to 2000. • California state population has grown 13.8 percent in the same time.

  17. Demographic Changes • In Humboldt County the number of households with social security income has grown 9.4 percent from 1990 to 2000. • Throughout the state this change has been 12.7 percent.

  18. Demographic Changes • In Humboldt County the number of households with retirement income has grown 10 percent from 1990 to 2000. • Throughout the state this number has grown 14.5 percent.

  19. Home Sales • Based on the number of homes that sell in Humboldt County each month. • Measure is adjusted for seasonal variation. • Quality of the data is very high.

  20. Changes and Trends Home sales index has increased by 32 percent since 1994.

  21. Changes and Trends Median home prices have increased 97 percent, from $118250 to $232900.

  22. Analysis • Home sales began increasing before the drop in interest rates. • Local sales have followed the upward trends seen at the state and national levels.

  23. Projections • Housing affordability will become more problematic if housing prices continue to rise faster than incomes. • Some economists speculate there is a housing bubble.

  24. Retail Sector • Based on seasonally adjusted sales at a range of local retail businesses. • Measures spending on final goods and services.

  25. Accuracy of the Retail Sales Index

  26. Retail Sector Trends From 1994 – 2004 the retail sales index has increased 40 percent.

  27. National Retail Trends Retail sales increased 58 percent from 1994 – 2003.

  28. Analysis • Local retail sector did not follow the national trends during the early 1990’s. • More recently local retail has reflected the national trends.

  29. Projections • Consumer confidence is currently high. • EDD predicts that employment in the retail trade sector will increase by 700 jobs from 2001 to 2008.

  30. Electricity Consumption • Based on seasonally adjusted electricity consumption. • Measures kilowatt hours of electricity used in Humboldt County.

  31. Quality of the Data • Correlation between the index and the actual consumption is 100%. • Data are only received quarterly.

  32. Changes and Trends From 1993 – 2004 electricity consumption has increased by 16 percent.

  33. State Level Trends Statewide electricity consumption from 1994 – 2001 increased by 10 percent.

  34. Analysis • Local electricity consumption has followed statewide trends. Both increased rapidly in the late 1990’s, then dropped sharply with the onset of the energy crisis. • Recent data show local consumption is again trending upward.

  35. Projections The state electricity forecast predicts that consumption will increase through 2007.

  36. Hospitality Sector • Based on seasonally adjusted average occupancy each month at a cross section of local hotels, motels and inns • A measure of the number of tourists who visit the North Coast • Quality of data is very good

  37. Very similar to series generated by the CA Division of Tourism:

  38. Unchanged 1994-2001 • Drop in occupancy starting in 2002

  39. Tourism Jobs flat since 1992 (confirms Index data)

  40. U.S. Hotel and Lodging Industry Income rising since 1994

  41. New rooms added, so drop in occupancy rate may not indicate decreased visitors • (9% increase in rooms since 2001) • However, Index fell by 17%, so fewer visitors since 2001

  42. Explanations Humboldt County Hospitality • Unchanged 1994-2001 • Drop in occupancy starting in 2002 • Recent Recession (but why no increase during late 1990s boom?) • Higher gas prices starting 1999? • 9/11

  43. Hospitality Sector Projections • Depends on people’s willingness to travel • Depends on easy access to Humboldt County • EDD predicts employment in Hospitality increasing 22% from 2001 to 2008.

  44. Employment Sector • Based on seasonally adjusted total county employment as reported by the Employment Development Department • We report which sectors gained jobs and which sectors lost jobs • Quality of data is excellent

  45. Employment peaked 2000 and began mild recovery in 2002 (same as nationally)

  46. U.S. Employment Level (dominated by upward trend)

  47. Only 5% increase in Employment since 1994 (almost 15% nationally) • However, national population is growing much faster

  48. Unemployment rate fell until 2001 then rose • Unemployment rate higher than state/national during boom, and similar during recession

  49. No relative change in labor markets within Humboldt County

  50. EDD projects 5.7% growth in employment 2001-2008

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