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10.28.2010

Economic and Workforce Challenges in Central VA Background Information for Discussion. 10.28.2010. Purpose Provide a better understanding of macro & regional economic factors. The positives and negatives Employment dynamics Who’s most affected by the changes

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10.28.2010

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  1. Economic and Workforce Challenges in Central VA Background Information for Discussion 10.28.2010

  2. Purpose • Provide a better understanding of macro & regional economic factors. • The positives and negatives • Employment dynamics • Who’s most affected by the changes • Identify underlying issues • Recommendations & discussion

  3. The Macroeconomic Picture

  4. Foreclosures have probably not peaked, meaning a continued oversupply of housing stock.

  5. Demand is down despite record low interest rates.

  6. The overall demand picture remains weak nearly 5 years into the housing depression.

  7. The supply/demand dynamics will lead to higher inventories and further price declines.

  8. The connection between housing and employment is very strong. Without a rebound, employment will lag.

  9. The rebound in manufacturing has been stronger, but subdued compared to other recessions.

  10. Manufacturing employment may actually grow with a favorable exchange rate, but the sector is still underutilized.

  11. Growth in services has rebounded somewhat, but employment gains have been tepid.

  12. Job Leaders / Losers, Q4 2007-Q1 2010

  13. Government Debt as a Percent of GDP

  14. Employment Dynamics

  15. Positive Attributes and Workforce Opportunities

  16. Unemployment, 1990-Present (VEC) Local, regional unemployment consistently tracks lower than state and national averages.

  17. Wage Growth, 1990-Present (QCEW) 93.9% Average wage growth in the county has been consistently strong. 100.3%

  18. Greater Charlottesville Employment by Size of Establishment Large / public sector employers are the county / region’s firewall against more severe downturns. • 39% of Albemarle County’s Wages Come from the Public Sector • 35% of the MSA’s Wages Come from the Public Sector • 19% of the Commonwealth’s Wages Come from the Public Sector

  19. Downside Risks: Greater Charlottesville Economic and Workforce Challenges

  20. Albemarle Unemployment, 1990-Present (VEC) Labor force participation and employment have broken under their 12 month moving averages. Rates go down, but not because of employment growth.

  21. Private Sector Wage Growth, 1990-Present (VEC) 85.9% 91.0% Private sector wage growth is eroding when compared to the rest of VA. 88.6%

  22. Labor Supply and Demand (2008 QCEW, 2000 Census) Albemarle leads the ‘mismatch’

  23. Commuting Workforce WIA 6 Commuting to Work (2000 Census) (~ 22,200) Out commuters are one indicator of competing economic opportunities in different workforce areas. NOVA (~ 1,900) (~ 2,800) VAL FB RIC (~ 1,100) (~ 4,700) LYN

  24. Greater Charlottesville Business Clusters • Professional • Information Technology • Finance • Insurance • Prof & Tech Services • Mgt of Co. & Enterprises • Skilled Trades • Agriculture • Mining • Utilities • Construction • Manufacturing • Wholesale & Trans. • White Collar Service • Real Estate • Educational Services • Health Care • Social Assistance • Public Administration Industry cluster types coalesce around wage and education levels. • Blue Collar Service • Retail • Administration • Arts, Entertainment & Rec • Accommodation • Food Service • Other Services

  25. Greater Charlottesville Employment Growth by Cluster Q1 1990 – Q1 2010 (US Department of Labor, Quarterly Census of Employment & Wages) $1,241 $883 Employment growth has been steady until the recession. $995 $435

  26. Greater Charlottesville Employment Growth by Cluster Q1 1990 – Q1 2010 (US Department of Labor, Quarterly Census of Employment & Wages) But the growth has been uneven. (L14 – 16) $883 (L8 - 12) $435 (12 – 14) $955 (L14 – 20) $1,241

  27. Greater Charlottesville Business Clusters (US Department of Labor Quarterly Census of Employment & Wages) Low wage service jobs comprise almost 1/3 of the employment share, unchanged since 1990. 1990 Jobs, comprised mostly of public sector employees are taking a larger share of the regional economy. Skilled trades employment has declined by almost 30% since 1990. 2010

  28. Observations • The public sector and hospitality industry are driving employment growth in the Charlottesville MSA. • There are several downside risks to this pattern: • Economy demands higher education for the same pay. • Lack of diversity in job opportunities may be contributing to a permanent underclass and a permanent commuting class. • Population growth is not balanced by revenue growth.

  29. Greater Charlottesville Employment Growth by Cluster Q1 1990 – Q4 2009 (US Department of Labor, Quarterly Census of Employment & Wages) (L14 – 16) $999 (L8 - 12) $474 (12 – 14) $1,012 (L14 – 20) $1,405

  30. Greater Charlottesville Housing Sales and Median Prices, 2002-2009 (CAAR)

  31. Issues & Challenges The regional economy may continue to grow in a way that causes several challenges: More residents may not necessarily mean more tax paying employers. Property tax revenues (70-75% of most budgets) will be under strain because of declining residential assessments (75-90% of property tax revenues). Education funding will likely be the biggest challenge as a result.

  32. Looking Forward

  33. Workforce Area 6 Projected Employment Growth by Industry, 2010-2020

  34. Workforce Area 6 Projected Employment Growth by Occupation, 2010-2020

  35. Workforce Area 6 Age by Industry, 2009

  36. Educational Challenges/Opportunities from an EcoDev Perspective • Funding constraints will continue. • More students in education, health, IT career paths to work in the Central VA region. • Pay attention to the retiree wave that could affect both the region’s and department’s workforce. • Have flexibility to adjust as conditions change. (DIA, Other ‘game changing’ employment sectors) • Work with EcDev on career paths for targets, emerging industries.

  37. Overall EcoDev Recommendations • Our economic program should have 3 main goals: • Reduce the number and percentage of our residents who commute out of the region for work. • Reduce the number and percentage of our working poor. • Expand and diversify the local employment / tax base.

  38. TJPED Recommendations Strategically grow and attract capital intensive, private sector employers that provide career ladder job opportunities for our resident workforce. • Actions that can help us achieve our goals: • Determine business targets • Create a favorable climate • Cultivate & grow local businesses • Strategically attract new investment • 5. Develop the right workforce

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