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December 4, 2008

The U.S., Washington & Northern Virginia Economies: Current Performance and Near Term Outlook. John McClain, AICP Senior Fellow and Deputy Director, Center for Regional Analysis, School of Public Policy George Mason University. December 4, 2008. GDP Percent Change (Real Dollars). %.

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December 4, 2008

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  1. The U.S., Washington & Northern Virginia Economies: Current Performance and Near Term Outlook John McClain, AICPSenior Fellow and Deputy Director, Center for Regional Analysis, School of Public Policy George Mason University December 4, 2008

  2. GDP Percent Change(Real Dollars) %

  3. CURRENT CONDITIONS

  4. ISM Manufacturing and Non-Manufacturing Indices Non-Mfg Mfg

  5. Annual Change in Jobs - US THOUSANDS Oct = - 1.18 Source: BLS Establishment Survey

  6. Initial Unemployment Claims Thousands (4-week moving average) 350

  7. U.S. Unemployment Rate % 6.5 Source: BLS, Seasonally Adjusted

  8. Consumer Confidence Present Situation 100 Expectations Source: Conference Board, GMU Center for Regional Analysis

  9. U.S. Gross Domestic ProductQuarterly Change: 2006 – 2010 Forecast > > > > > > > > > % 2006 2007 2008 2009 2010 2011 Source: Global Insight

  10. The Washington and Northern Virginia Economies

  11. U.S and Washington Area Recent Recessions

  12. Annual Change in Jobs1991 – 2007Washington Metro Thousands Source: BLS, GMU Center for Regional Analysis

  13. Annual Job ChangeWashington Metro Area 000s Annual Change Annual Month-over-the-Year 2007 2008 Source: BLS, GMU Center for Regional Analysis

  14. 15 Largest Job MarketsJob Change Oct. 07– Oct. 08 Thousands Washington + 35,700 Ranked by Total Jobs

  15. 15 Largest Job MarketsRanked by Unemployment RateOctober 2008 % U.S. 6.1 4.1 Source: BLS, GMU Center for Regional Analysis Data not seasonally adjusted

  16. Oct. 2007 – Oct. 2008Job Change By Sector MSA(000s) Total = 35,800 (Ranked by Size of Sector)

  17. Annual Job ChangeNorthern Virginia Annual Change Annual Month-over-the-Year 2007 2008 000s Source: BLS, GMU Center for Regional Analysis

  18. Federal Procurement – Northern Virginia Billions $ +16% +27% +16% Source: Consolidated Federal Funds Reports, Eagle Eye, Inc., GMU Center for Regional Analysis

  19. The Housing Market

  20. Sales and Total Active ListingsWashington MSA, October Each Year 1000s Listings Sales

  21. Units Sold Percent ChangeBy SubregionAll Housing Types % 2007 2008 NVA MSA SMD DC

  22. Units Sold Percent ChangeNorthern VirginiaAll Housing Types % 2007 2008 PW NVA FFX LDN

  23. Median Housing Sales PriceNorthern VirginiaOctober Each Year, 1998 - 2008 $ $459,300 $287,500 $181,000 Appreciation = + 4.7%/year for 10 years Source: MRIS, GMU Center for Regional Analysis

  24. Foreclosure ActivityVirginia Metropolitan AreasJuly 15 and Oct 15, 2008 Source: RealtyTrac, GMU Center for Regional Analysis

  25. The Outlook

  26. GDP/GRP 2000 - 2011 % Washington Metro U.S.

  27. Employment Change bySub-state Region (000s) Average Annual Change 1990-2007 = 44,900 Source: BLS, GMU Center for Regional Analysis

  28. Job Change by Sector, 2008-2013(000s)

  29. THE OUTLOOK FOR NORTHERN VIRGINIA’s HOUSING MARKET • Foreclosures Will Take Time to Work Through • Many Sub-primes Will Have Reset by Early 2009 • Alt-As will take much longer • Some Areas Face Danger of Prime Mortgages Going into Foreclosure Because of Falling Prices • Fiscal Impacts of Declines in Residential Property Values Will Invoke Large Toll on Government Tax Revenues • Federal Policy Effects – How Long For Current Actions to Turn the Current Situation? • Increases in Sales A Sign the Tide is Turning? • Market Recovery Will be a Mix by Geography – Areas with Good Transportation and Access to Jobs, Recovering Soon, Most Areas Will Take Longer

  30. THE OUTLOOK FOR NORTHERN VIRGINIA’s ECONOMY • Underlying Economic Fundamentals are Still OK • Federal Procurement Moderating Trend to Continue & Will Grow But Will Not be the Economic Driver as in the Past • Sectors Related to Housing Market Will Take Some Time to Recover – Will Depend on Housing Market Recovery • Long-term Prosperity/Recovery Will Require Adequate Workforce, Workforce Housing, Improved Mobility / Traffic Congestion Relief • Need Long-Term Economic Strategy To Build on Region’s Strengths & Adjust to Any Shifts in Procurement Policy • Federal Policy Effects – How Long For Current Actions to Turn the Current Situation? • Recovering Slowly Late 2009 At National Level ?? – Northern Virginia Jobs Will Continue Slow Growth

  31. www.cra-gmu.org

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