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Economic Outlook: Beyond the Recession

Economic Outlook: Beyond the Recession. ESICA Spring Conference The Tides Inn – Irvington, VA May 6, 2010 Ann Battle Macheras Federal Reserve Bank of Richmond. Overview. National Economic Trends GDP Employment Business Activity Construction Indicators Construction Put in Place

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Economic Outlook: Beyond the Recession

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  1. Economic Outlook:Beyond the Recession ESICA Spring Conference The Tides Inn – Irvington, VA May 6, 2010 Ann Battle Macheras Federal Reserve Bank of Richmond

  2. Overview • National Economic Trends • GDP • Employment • Business Activity Construction Indicators • Construction Put in Place • Commercial Vacancy Rates • Property Prices Financial Markets • Lending for Commercial Real Estate • What to Expect?

  3. National Economic Trends

  4. US Gross Domestic ProductPercent Change, Seasonally Adjusted Annual Rate Source: BEA/Haver Analytics

  5. Real Gross Domestic Product Source: BEA/Haver Analytics

  6. Real Gross Domestic Product Source: Bureau of Economic Analysis/Haver Analytics

  7. Non-Residential Fixed Investment Source: BEA/Haver Analytics

  8. Real Non-Residential Fixed InvestmentEquipment and Software Source: BEA/Haver Analytics

  9. Non-Residential Fixed Investment in Structures Source: BEA/Haver Analytics

  10. Real Non-Residential Fixed Investment in Structures Source: BEA/Haver Analytics

  11. Nonfarm Payroll EmploymentAverage Monthly Change Source: Bureau of Labor Statistics/Haver Analytics

  12. Industry Growth in the United StatesPercent Change in Employment from a Year Ago

  13. Unemployment Rate Source: Bureau of Labor Statistics/Haver Analytics

  14. Retail Sales % Change: Jan: 4.1% Feb: 3.9% Mar: 7.6% Source: BEA/Haver Analytics

  15. Personal Income and Expenditures Source: BEA/Haver Analytics

  16. ISM Manufacturing and Non-Manufacturing Surveys Source: Institute of Supply Managers

  17. Richmond Manufacturing Composite Index:MD, DC, VA, WV, NC, SC Source: Federal Reserve Board/Haver Analytics

  18. Manufacturing Activity – Regional Surveys Philadelphia New York Source: Federal Reserve Bank of Philadelphia and Federal Reserve Bank of New York

  19. Industrial ProductionIndex: 2002=100 Source: Federal Reserve Board/Haver Analytics

  20. Capacity UtilizationIndex: 2002=100 Source: Federal Reserve Board/Haver Analytics

  21. Core Capital Goods Source: US Census Bureau/Haver Analytics

  22. Construction Indicators

  23. U.S. Construction Put in PlaceTotal and Private Construction Source: US Census Bureau/Haver Analytics

  24. U.S. Construction Put in PlaceOffice and Commercial Construction Source: US Census Bureau/Haver Analytics

  25. U.S. Construction Put in PlacePower and Manufacturing Construction Source: US Census Bureau/Haver Analytics

  26. Regional Construction Put in PlaceTotal Private Construction Source: US Census Bureau/Haver Analytics

  27. Regional Construction Put in PlaceOffice Construction Source: US Census Bureau/Haver Analytics

  28. Regional Construction Put in PlaceCommercial Construction Source: US Census Bureau/Haver Analytics

  29. Regional Construction Put in PlaceManufacturing Construction Source: US Census Bureau/Haver Analytics

  30. U.S. Commercial Real Estate Source: CB Richard Ellis/Haver Analytics

  31. Regional Commercial Real EstateOffice Vacancy Rates Source: CB Richard Ellis/Haver Analytics

  32. Regional Commercial Real EstateIndustrial Availability Rates Source: CB Richard Ellis/Haver Analytics

  33. Employment’s Relationship to Residential and Commercial Property Prices Moody’s/REAL Commercial Property Price Index: Dec. 2000=100 Source: Moody’s/REAL, BLS, Haver Analytics

  34. Financial Markets

  35. Fed Funds Rate

  36. Lending for Commercial Real EstateNet Percentage Tightening Standards

  37. Lending for Commercial Real EstateNet Percentage Reporting Stronger Demand

  38. Possible Future Scenarios?

  39. Gross Domestic Product – What to Expect? Note: For the most recent recession, t= 2Q:2009 Source: BEA/Haver Analytics

  40. Nonfarm Payroll Employment – What to Expect? Note: For the most recent recession, t= June 2009 Source: BLS/Haver Analytics

  41. Private Nonresidential Construction – What to Expect? Note: For the most recent recession, t= June 2009 Source: Census Bureau/Haver Analytics

  42. Looking Ahead for 2010: • Positive developments: • Job losses tapering off and gains setting in • Consumer spending strengthening • Business investment and increased activity • Global markets reinforcing the recovery • Risks to the recovery • Stubborn unemployment • Housing slow to rebound • Commercial real estate – continued drag • State and local revenue shortfalls – another drag

  43. Links for Data: • Construction Put In Place:http://www.census.gov/const/www/c30index.html (the links on the lefthand side take you to additional pages with more detail for each category) • Senior Loan Officer Survey – Measures of Supply and Demand for Commercial Real Estate Loans: http://www.federalreserve.gov/boarddocs/SnLoanSurvey/default.htm • National Indicators, such as GDP, Personal Consumption, etc. – Charts available in pdf files, with sources listed below http://www.richmondfed.org/research/national_economy/national_economic_indicators/index.cfm Ann’s email: ann.macheras@rich.frb.org

  44. Questions? … and thank you! The views and opinions expressed herein are those of the author. They do not represent an official position of the Federal Reserve Bank of Richmond or the Federal Reserve System.

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