High Desert Economy: Record Level of Jobs and Economic Growth

1. High Desert Economy . . . John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

2. After Losing 8.71 Million Jobs … Now At A Record Level of JobsU.S. Jobs Long Slow Growth - Not Over-Heating

4. California Job Gains/Losses Up 1,064,038 6.7% Up 2007 15,844,325 2016 16,908,363 Recovery 2,243,097 Great Recession -1,179,058

6. Inland Empire Population Greater Than 25 of 50 States 2010-2016 Growth: 6.2%

7. High Desert Population In Cities 349,249 2010-2016 Growth: 6.0%

8. Population Growth Rates

9. Inland Empire Economy Gaining Strength!

10. Job Quality

11. Unemployment Rates

12. The Issue: Poverty

13. Gold Mine Theory Secondary Tier Primary Tier

14. Sophisticated Warehousing Operations

15. Value of the Dollar:Helps Imports & Hurts Exports 100.0 2012-2016 25.6%

16. Port Container VolumesOn Pace To Tie 2nd Highest Import Level

17. Net Industrial Space Absorption 17.1 million

18. Industrial Vacancy Rate Low Everywhere! 2005/2006 2009Q3 2016Q4 High Desert 5.0% Inland Empire 2.7% 12.8% 4.0% San Diego 7.0% 12.0% 3.6% Central Valley NA NA 1.9% Orange Co. 5.4% 6.5% 1.6% L.A. Co. 2.1% 3.2% 1.2% Source: CB Richard Ellis & Coldwell Banker

19. E-Commerce Growth RatesYear Over Year by Quarter 1.1% 8.4%

20. Industrial OverwhelminglyIn The Inland Empire

21. Industrial Asking Lease Rates Soaring High Desert $5.88 Up 17.5%

22. Logistics Powerful Job Growth • 2011-2016 • 23.1% of New Jobs • Median Pay $45,456

23. Manufacturing: Should Be A Major Growth Source

24. California Manufacturing Job GrowthJust 4.8% of U.S. Growth

26. Inland Empire Manufacturing Jobs • 2011-2016 • 5.5% of Job Growth • Median Pay $50,106

27. Construction: Finally Coming Back

28. Existing Home Sales

29. Existing Home Sales By City, 2016

30. New Home Sales

31. New Home Sales By City

32. High Desert Existing Home Prices 104% -31%

33. High Desert New Home Prices 74% -27%

34. Existing Home Prices By City, 4th_2016

35. New Home Prices By City, 4th_2016

36. Long Term Competitive Price Advantage Still Exists

37. Mortgage Market Has Stabilized …Low Numbers of Notices of Default

38. Apartment Rental Rates & Vacancies. Riverside $1,367 4.6% San Bernardino $1,418 3.9% Orange $1,637 3.4% Santa Barbara $1,682 2.7% San Diego $1,873 3.2% Ventura $1,890 3.9% Los Angeles $2,180 4.0% Source: CB Richard Ellis

39. Inland Empire Construction Jobs • 2011-2016 • 12.8% of Job Growth • Median Pay $51,915

40. Health Care

41. Potential Impact On Health Care Demand & Quality of Life -51.0% Drop in Uninsured

42. Health Care Jobs: Continuous Growth • 2011-2016 • 11.6% of Job Growth • Median Pay $59,494

43. High Paying Sectors Ahmad Adel Al-Khatib Jack Dangermond

44. BA or Higher

45. Office Market Vacancies Improving 24.2% 12.4%

46. Office Vacancy Rates Recovering But Remain High! 2006Q4 2009Q4 2016Q4 Ventura NA NA 16.6% Inland Empire 7.6% 22.6% 12.5% L.A. Co. 9.4% 14.1% 12.4% Central NA NA 11.9% San Diego 10.1% 18.0% 11.5% Orange Co. 7.3% 18.7% 9.7% High Desert 5.8% Source: CB Richard Ellis & Coldwell Banker

47. Office Asking Lease Rates Rising Down -8.2% High Desert $1.40

48. Professionals & Mgmt., Higher Ed., Mining Utilities, Information Group Slowly Adding Jobs 2011-2016 0.4% of Growth Median Pay $71,206

49. Assessed Valuation Finally, Purchasing Power Growth! 14.1% FY 2009-2018 Inflation: 11.7%

50. High Desert Assessed Valuation -10.2% SB Co. +14.1%