Washington Area Economy: Performance and Outlook Presentation to: Arlington Economic Development Commission Mark C. White, Ph.D. Deputy Director Center for Regional Analysis Schar School of Policy and Government George Mason University June 12, 2018 1
Agenda US economic trends The Washington regional economy The continued influence of the federal government Additional ongoing challenges The contributions of foreign-born, non-citizen workers to the regional workforce Looking ahead 2
U.S. Gross Domestic Product 6.0 Quarterly Change Real GDP (Billions) $18,000 % 5.0 4.0 3.0 2.0 $17,500 $17,000 $16,500 $16,000 $15,500 1.0 0.0-1.0 $15,000 $14,500 $14,000 $13,500-2.0 2010 2011 2012 2013 2014 2015 2016 2017 $13,000 Source: Bureau of Economic Analysis (Seasonally Adjusted, Chained 2009 Dollars ) 2017 +2.3% 2018Q1 +2.2%
400 350 300 250 200 150 100 50 0 US Payroll Jobs Month-to-Month Change (000s) Total (Millions) 2013 2014 2015 2016 2017 2018 150 145 140 135 130 125 2016-2017 2.36M May +223K Since 2010 +18.9 M Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis
The Washington Regional Economy 5
GDP Trends since 2001 6
110 90 70 50 30 10 Annual Job Change - Washington MSA MOTYC Non-Farm Jobs 000 s 000 s -10 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 3,350 3,300 3,250 3,200 3,150 3,100 3,050 3,000 2,950 2,900 2,850 2,800 Apr 17- Apr 18 +38.7 K April-18 Total: 3,308 K
15 Largest Job Markets Job Change: April 2017 April 2018 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Washington +1.2% Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Unemployment Rates in the WMSA By Sub-State Area 12 10 8 6 4 2 5.0 DC 3.9 U.S. 3.5 SMD 3.1 MSA 2.4 NVA 1.9 ARL 0 Source: Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US Seasonally Adjusted)
Professional & Business Services drive the regional economy April 2018 Professional & Business Services Education & Health Services Federal Government State & Local Government Leisure & Hospitality Retail Trade Other Services Construction Financial Activites Information Transportation & Utilities Wholesale Trade Manufacturing 2.3% 2.1% 4.9% 4.9% 1.9% 1.7% 6.4% 11.1% 10.4% 10.2% 8.5% 13.7% 22.9% Source: US Bureau of Labor Statistics, Current Employment Statistics 0% 5% 10% 15% 20% 25% 10
(Ranked by Size in 2017) Prof. & Bus. Svcs Educ & Health Svcs Federal Govt. State & Local Govt Leisure & Hosp. Retail Trade Other Services Construction Financial Information Transp. & Util. Wholesale Trade Manufacturing -4.6 Job Change by Sector April 2017 April 2018 Washington MSA -1.6 0.0 1.1 2.9 2.1 2.1 3.2-6 -4-2 0 2 4 6 8 10 12 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis (000s) Total = 38,700 3.7 4.3 7.3 8.5 9.7
Covered Employment in Washington MSA Professional & Business Services Government Education & Health Services Leisure & Hospitality Retail Trade Other Services Construction Financial Activites Information Transportation & Utilities Manufacturing Wholesale Trade 2.2% 2.0% 1.7% 1.7% 5.5% 5.0% 4.7% 8.8% 10.5% 13.0% 2018 2008 22.6% 21.9% Source: EMSI 0% 5% 10% 15% 20% 25% 12
Covered Employment in Arlington Professional & Business Services Government Leisure & Hospitality Education & Health Services Other Services Retail Trade Transportation & Utilities Financial Activites Information Construction Wholesale Trade Manufacturing 1.2% 0.8% 0.6% 5.3% 5.1% 3.9% 3.0% 6.4% 8.3% 10.5% 2018 2008 22.2% 32.6% Source: EMSI 0% 5% 10% 15% 20% 25% 30% 35% 13
The Economic Influence of the Federal Government 14
(000s) 30 25 20 15 10 5 0-5 -10-15 -20 Federal Government Washington MSA 2010 2011 2012 2013 2014 2015 2016 2017 2018 (000s) 390 385 380 375 370 365 360 355 350 345 Feb 17- Feb 18-6,600 MOTYC Total Jobs Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis February-18 Total: 362K
$ Billions 90 80 70 60 50 40 30 20 10 0 Federal Procurement in the Washington MSA 1980-2017 (Fiscal Years) 82.4 TOTAL = $1,388.5 Billion 79.9 76.3 77.6 71.2 75.0 69.1 71.1 Source: US Census, Consolidated Federal Funds Report and USAspending.gov
(000s) 25 20 Professional & Business Services Washington MSA 780 760 15 10 5 0-5 -10-15 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 740 720 700 680 660 640 620 Apr 17- Apr 18 +7.3K MOTYC Total Jobs April-18 Total: 751.5K
Month over the Year Employment Change (000s) Professional and Business Services Employment and Federal Employment in Washington, DC Metro Area Compared to the Previous Year, 2012-2018 25.0 20.0 15.0 10.0 5.0 0.0-5.0-10.0-15.0-20.0 Prof. & Business Services Federal 2012 2013 2014 2015 2016 2017 2018 Source: US Bureau of Labor Statistics, Current Employment Statistics 18
The DC Metro is a leader in Cyber-security Washington New York Dallas Chicago Minneapolis Boston Los Angeles Philadelphia Atlanta Charlotte Phoenix SF-Oakland Baltimore St. Louis Denver Information Security Analysts (SOC 15-1122) by metro area, 2017 3,560 3,400 3,200 3,110 3,030 2,460 2,430 2,360 2,360 2,270 2,170 1,970 1,740 7,380 13,520 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Source: U.S BLS Occupational Employment Statistics (May 2017) and GMU Center for Regional Analysis 19
Additional ongoing challenges 20
Population/Employment (2000=100) Population and employment trends in the Washington Metro Area 130 125 120 115 110 105 100 95 Population Employment 90 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Source: US Census Bureau Population Estimates, US Bureau of Labor Statistics Quarterly Census of Employment and Wages 21
Population and employment trends in Arlington Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 22
Arlington is fully immersed within the broader regional workforce Where Arlington residents work (2015) Where Arlington workers live (2015) *19.5 percent of workers living in Arlington, also work in Arlington Source: US Census Bureau, Longitudinal Employer-Household Dynamics, OnTheMap *15.4 percent of workers working in Arlington, also live in Arlington 23
Population Change 120,000 The region has experienced net domestic out-migration since 2013 120,000 100,000 37,183 80,000 39,715 41,048 39,358 45,410 44,760 45,606 60,000 49,016 40,000 49,169 47,790 20,000 23,864 6,843 0 3,143 Net Int'l Migration -20,000-40,000 Natural Increase 48,651 47,832 44,882 42,616-23,209-21,543-31,483-31,492 Net Domestic Migration Total Change 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 Source: US Census Bureau, Population Estimates Program, V2017 100,000 80,000 60,000 40,000 20,000 0-20,000-40,000 Total Population Change This trend started sooner in places like Arlington- Alexandria and suburban Maryland. People move here for jobs, then choose a place to live in the region. Many factors cause them to consider other metro areas Note the continued importance of Int l migration to the region s continued growth 24
Long commutes diminish quality of life Proportion of workers with travel time to work of 60 or more minutes New York 21.8% Washington 17.8% SF-Oakland 17.2% Atlanta 14.5% Chicago 14.1% Boston 13.8% Los Angeles 13.3% Seattle 12.2% Philadelphia 11.6% Houston 11.2% Miami 10.7% Dallas 9.3% Source: US Census Bureau, 2016 American Community Survey, Table S0802 United States Phoenix Detroit Minneapolis 9.1% 7.6% 7.2% 5.5% 0% 5% 10% 15% 20% 25% Arlington 7.6% 25
(000s) 700 Median House Sales Price Washington MSA Arlington 600 $560K 500 400 $442 K May 2018 300 200 100 Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
The contributions of foreign-born, non-citizen workers to the Washington region s workforce 27
Source: 2016 American Community Survey, Public Use Microdata Sample (PUMS) files 28
Most Foreign Born, Non-Citizens originate from Latin America El Salvador 23.5% India Guatemala Mexico Honduras 6.2% 6.1% 5.8% 5.6% Ethiopia China Bolivia Philippines Canada Bangladesh 3.1% 3.0% 2.9% 2.7% 1.0% 0.7% 0% 5% 10% 15% 20% 25% Proportion of Total Foreign-Born, Non-Citizen Workers Source: US Census Bureau ACS 2016, GMU Center for Regional Analysis 29
Source: 2016 American Community Survey, Public Use Microdata Sample (PUMS) files 30
60% 50% 40% Majority of foreign-born, non-citizen workers have been here 10 years or more Year of Entry, Non Citizen Foreign Born Workers MWCOG Region 48.3% 30% 20% 10% 0% 22.2% 17.2% 8.4% 0.2% 0.5% 1.5% 1.8% before 1960 1960-1969 1970-1979 1980-1989 1990-1999 2000-2009 2010-2014 2015 or later Source: US Census Bureau ACS 2016, GMU Center for Regional Analysis 31
Percentage of Workers Foreign-born, non-citizen workers are about as likely to have a post-secondary degree as all workers nationwide 35% 30% 29.4% Non-Citizen, Foreign-Born Workers Greater Washington Region Workforce 25% 27.4% 25.8% 20% 20.9% 22.7% 15% 16.0% 16.2% 16.0% 17.5% 10% 5% 8.2% 0% Less than High School High school diploma/ged Source: US Census Bureau ACS 2016, GMU Center for Regional Analysis Associates degree or Some College Bachelors Degree Graduate or Professional Degree 32
Several occupational groups rely heavily on foreign-born, non-citizen workers Foreign-Born, Non-Citizen Workers % of Total Occupation Workforce Occupation Group Construction & extraction 65,940 52.4% Cleaning & maintenence 52,750 48.6% Farming, fishing, & forestry 1,150 38.0% Food preparation & serving 43,770 32.6% Production 14,220 28.0% Healthcare support 10,300 21.6% Personal care & service 21,160 21.3% Transportation & material moving 22,870 20.7% Life, physical, & social science 10,890 18.1% Installation, maintenance, & repair 9,190 16.6% Sales 33,990 14.1% Computer & mathematical 21,520 10.1% Healthcare practitioners 11,420 8.7% Financial specialists 8,070 8.6% Office & administrative support 27,980 8.6% Source: 2016 American Community Survey, Public Use Microdata Sample (PUMS) files 33
Looking ahead Now/This Year: On a roll Apple/Amazon Federal Budget (We have one!) Job growth constrained by labor availability Building permits not booming Lack of housing inventory, lack of affordable housing Looking Forward Economic Development = Talent Attraction Quality of Life is key Net effects of new tax laws on worker take home Increasing debate about 1099 work versus employment Immigration Construction costs AI
Thank You Questions mwhite34@gmu.edu cra.gmu.edu