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Warren County Office of Economic Development
Ahead of the Curve 2015-2017
ITR Economics itreconomics.com Brian L Beaulieu
ITR Economics provides the best economic intelligence to reduce
risk and drive practical and profitable business decisions.
Duration Forecast Result Accuracy
US GDP 15 $16.098 Trillion $16.317 Trillion 98.7%
US Ind. Prod. 13 101.5 (12MMA) 104.1 97.4%
EU Ind. Prod. 14 100.6 (12MMA) 101.5 99.1%
Canada Ind Prod 9 350.1 (12MMA) C$357.1 98.0%
China Ind Prod 21 564.9 (12MMA) 563.6 99.8%
US Housing 12 955 Ths. Units 1.0 mils. Units 94.7%
US Retail Sales 16 $2.751 Trillion $2.808 Trillion 98.0%
US Employment 13 144.9 Million 146.3 Million 99.0%
2014 Forecast Results 2
*Denotes year-end estimate based on most recent data available
3
Real Gross Domestic Product
3MMA
10
12
14
16
18
20
10
12
14
16
18
20
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
June 2013 Sept 2013
Sept 2013
GDPCON 3MMA
4
US, Ohio & the Midwest Annual GSP Growth Rate
2009 Dollars
-8
-6
-4
-2
0
2
4
6
8
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16
U.S. Ohio Midwest
WC OH USA
High School 92.0% 88.5% 86.0%
BS/BA 37.9% 25.2% 28.8%
Income: $72.5 $48.3 $53.0
Poverty rate 6.3% 15.8% 15.4%
5
Unemployment Rates
2
3
4
5
6
7
8
9
10
11
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
U.S. Ohio
Feb 2015
OH 5.1%
US 5.5%
Cincinnati 4.1%
Dayton 6.1%
Raw
May-13 1.4
Jun-13 1.5
Jul-13 1.5
Aug-13 1.4
Sep-13 1.5
Oct-13 1.3
Nov-13 1.3
Dec-13 1.6
Jan-14 1.6
Feb-14 1.5
Mar-14 1.7
Apr-14 1.6
May-14 1.7
Jun-14 1.7
Jul-14 1.7
Aug-14 1.6
Sep-14 1.7
Oct-14 1.5
Nov-14 1.5
Dec-14 1.9
Jan-15 1.7
Feb-15 1.7
Mar-15 1.9
Apr-15 1.7
3MMT
4.4
4.4
4.4
4.2
4.1
4.2
4.5
4.7
4.8
4.8
5.0
5.0
5.1
5.0
5.0
4.8
4.7
4.9
5.1
5.3
5.3
5.3
12MMT
18.0
18.2
18.4
18.6
18.8
19.0
19.2
19.4
19.7
19.8
20.0
20.2
20.3
12/12
26.7%
25.5%
25.2%
22.4%
20.0%
18.3%
15.4%
12.7%
3/12
15.9%
13.6%
13.6%
14.3%
14.6%
16.7%
13.3%
12.8%
10.4%
10.4%
6
Data Preparation
7
Ohio Construction Industry Employment
Thousands of People
2.3% 4.4%
195.2
160
210
260
310
360
-24
-16
-8
0
8
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMA R-O-C
3/12
12/12
3MMA 12MMA
8
World GDP, Trillions of US $, Current Prices
Percent of 2013 World GDP
Source: IMF
73.982 Trillion US$
OHIO / IRAN
#21 ranking
Annual Average Data Trends
US to Europe Industrial Production 9
9
60
80
100
120
140
40
60
80
100
120
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Europe US
US
Europe
10
Interest Rates for Long-Term Government Bonds
2.4%
0.3% 0.5%
1.3%
0.3% 0.3%
0.5% 0.2%
11.7%
0.8%
1.3%
0.4% 0.3%
3.2%
1.7% 1.2%
0.4%
1.6% 1.9%
0%
5%
10%
15%
Latest yield
0.0%
11
Ohio to Warren County Population
Millions of Persons
0.01
0.10
1.00
1.00
10.00
100.00
Warren County Ohio
Population, Ohio
Population, Warren County
WC 4.1% Population Growth
OH 0.5% (2010-2014)
12
Ohio to Warren County Number of Proprietors
Thousands of Proprietors
1
10
100
10
100
1,000
10,000
Warren County Ohio
No. of Proprietors, Ohio
No. of Proprietors, Warren County
13
Ohio to Warren County Total Full-Time
and Part-Time Employment
Millions of Jobs
0.00
0.02
0.03
0.05
0.06
0.08
0.09
0.11
0.12
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
Warren County Ohio
Total Jobs, Ohio
Total Jobs, Warren County
14
US Industrial Production to ITR Leading Indicator™
USIP – 12/12 Indicator - Monthly
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Indicator US IP
Indicator - Monthly
US IP - 12/12
Reported in ITR Trends Report – ITR Advisor
15
US Leading Indicator
Source: The Conference Board
6.2%
-25
-20
-15
-10
-5
0
5
10
15
-25
-20
-15
-10
-5
0
5
10
15
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
1/12
2010 = 100
16
Purchasing Managers Index
1/12 Rate-of-Change
Source: Institute for Supply Management
-5.3
-50
-25
0
25
50
75
-50
-25
0
25
50
75
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
1/12
Non-Manufacturing Purchasing Managers Index 17
57.3
45
50
55
60
45
50
55
60
'10 '11 '12 '13 '14 '15 '16
MMA R-O-C
3MMA 12MMA
17
Above 50 Indicates expansion
Institute for Supply Management
18
S&P500 Stock Prices Index
Data Trends
0
400
800
1200
1600
2000
2400
0
400
800
1200
1600
2000
2400
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Raw
12MMA
Source: Wall Street Journal
19
Nondefense Capital Goods New Orders w/o Aircraft
Billions of Dollars
1.3% 4.8%
$851.0
500
750
1000
1250
1500
-60
-40
-20
0
20
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMT R-O-C
3/12
12/12
3MMT
12MMT
20
-21
-14
-7
0
7
14
21
-45
-30
-15
0
15
30
45
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Indicator Company A
Company A
Indicator - 1/12
Executive Vantage Point (EVP) for Companies
20
Generating the Quantitative Forecast
21
ITR Long Term Business Cycle Theory News and Market Observations
Leading Economic Indicators Internal Trends
22
Crude Oil Futures Prices to
Natural Gas Future Prices
Raw Data
0
3
6
9
12
15
-5
25
55
85
115
145
'86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Gas Oil
Oil
Natural Gas
23
US Consumption of Crude Oil & Petroleum Products
to Real Gross Domestic Product
Data Trends
Sources: EIA, BEA
6
10
14
18
0.4
0.5
0.6
0.7
1985 1990 1995 2000 2005 2010 2015 2020
GDP Trils C2009$
Oil Bils Barrels
Oil Consumption - Raw Data
GDP - 3MMA
24
US Total Renewable Energy Consumption
Quadrillion Btu
Source: EIA
9.6
3
4
5
6
7
8
9
10
3
4
5
6
7
8
9
10
25
Crude Oil Futures Prices to JP Morgan Global PMI
12/12 Rates-of-Change
-60
-30
0
30
60
90
-60
-30
0
30
60
90
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Global PMI Oil Prices
Oil Prices
Global PMI
The JP Morgan Global PMI 12/12 has a 10
month lead time to the Crude Oil Futures
Prices 12/12 through business cycle highs
and lows.
Correlation: 0.42
26
Crude Oil Futures Prices to Cushing Hub Inventories
12/12 Rates-of-Change
-60
-30
0
30
60
90
-60
-30
0
30
60
90
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Inventories Oil Prices
Oil Prices
Inventories Correlation: 0.61
27
Employment – Private Sector
Annual Data Trend
85
90
95
100
105
110
115
120
85
90
95
100
105
110
115
120
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Employment Mils of Jobs
Private Sector Employment Growth
Job Openings
Involuntary Part Time Employment
Quit Rate – Rising
19.4% B 2.4% B
-9.2% D 11.0%
28
Ohio to Warren County Total Full-Time
and Part-Time Employment
12/12 Rates-of-Change
1.2%
3.7%
-9
-6
-3
0
3
6
9
-6
-4
-2
0
2
4
6
1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020
Warren County Ohio
Ohio
Warren County
29
Ohio to Warren County Wage & Salary Jobs
Millions of Jobs
0.00
0.01
0.03
0.04
0.06
0.07
0.09
0.10
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Warren County Ohio
Wage & Salary Jobs, Ohio
Wage & Salary Jobs, Warren County
30
Ohio to Warren County Wage & Salary Jobs
12/12 Rates-of-Change
1.1%
4.2%
-12
-8
-4
0
4
8
12
-6
-4
-2
0
2
4
6
1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020
Warren County Ohio
Ohio
Warren County
31
Consumer Price Index
Rates-of-Change
0.0%
1.4%
-3
0
3
5
8
10
-3
0
3
5
8
10
'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
1/12
12/12
32
FOMC Member Interest Rate Projections
Source: Federal Reserve
Fed Open Market Committee
0
1
2
3
4
5
6
0
2
4
6
8
10
12
14
16
1982 1986 1990 1994 1998 2002 2006 2010 2014
%
Yield on 10 Year Treasury Note Source: Factset
Corporate AAA Bond Yields Inverted for Prices
Raw Data
34
34
0
3
6
9
12
15
18
0
3
6
9
12
15
18
Raw
Source: Federal Reserve Board
35
Real Personal Income Less Transfer Receipts
Average per Person Age 18 to 65
12MMA Data Trend
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
Sources: Federal Reserve Bank of St. Louis
U.S. Bureau of Labor Statistics
36
Ohio to Warren County Personal Income
Billions of Dollars
$0.1
$1.0
$10.0
$10
$100
$1,000
Warren County Ohio
Personal Income, Ohio
Personal Income, Warren County
37
Ohio to Warren County per Capita Income
Thousands of Dollars
$1
$10
$100
$1
$10
$100
Warren County Ohio
Income per Capita, Ohio
Income per Capita, Warren County
38
Ohio to Warren County Wages & Salaries
Billions of Dollars
$0.0
$0.3
$3.0
$30.0
$3.0
$30.0
$300.0
$3,000.0
Warren County Ohio
Wages & Salaries, Ohio
Wages & Salaries, Warren County
Source: Reuters/University of Michigan 39
Consumer Expectations and Retail Sales
Index of Expectations
1.2
1.6
2.1
2.5
2.9
45
61
78
94
110
'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Sales Expectations
Expectations - Actual
Retail Sales - 12MMT
40
Total Retail Sales (deflated)
Trillions of Dollars
6.6%
4.6%
$2.83
1.65
2.15
2.65
3.15
3.65
4.15
4.65
-18
-14
-9
-5
0
5
9
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMT R-O-C
3/12 12/12
3MMT
12MMT
41
Housing Starts
Millions of Units
Mar ‘13
May ‘11
Dec ‘09
8.2%
9.5%
1.013
0.2
1.0
1.9
2.7
3.5
4.4
5.2
-80
-60
-40
-20
0
20
40
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMT R-O-C
3/12
12/12
3MMT 12MMT
42
Remodeling Market Index
3MMA
Source: National Association of Home Builders
62.9 Northeast 66.3 West
56.3 South 59.0 Midwest
15
30
45
60
75
15
30
45
60
75
'02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Northeast
Midwest
South
West
43
US to Ohio Building Permits
12/12 Rates-of-Change
-50
-25
0
25
50
-50
-25
0
25
50
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 U.S. Ohio
44
Ohio Housing Unit Building Permits
Thousands of Units
-0.2% -2.8%
20.2
5
35
65
95
125
155
-105
-70
-35
0
35
70
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMT R-O-C
3/12
12/12
3MMT 12MMT
45
US to Warren County
Median Home Sales Price
Annual Data Trends
Source: Zillow.com
$207.2
$187.8
150
170
190
210
230
150
170
190
210
230
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Warren County US
US Median Price
Warren County Median Price
46
Ohio to Warren County
Median Home Sales Price
Annual Data Trends
Source: Zillow.com
$127.8
$187.8
100
120
140
160
180
200
220
100
120
140
160
180
200
220
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Warren County Ohio
Ohio Median Price
Warren County Median Price
47
Ohio Housing Price Index
Year over Year % Change
120
135
150
165
180
195
120
135
150
165
180
195
Raw
48
US Industrial Production to
Non-Residential Construction
Data Trends
50
150
250
350
450
35
65
95
125
155
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Construction Index
Index
Construction
Private Chemical +61.9% and accelerating
Warehouse +53.2% and accelerating
Private Manufacturing +19.7% and accelerating
49
US Industrial Production to Gross Domestic Product
Year-over-year, Quarter to Quarter (3/12)
-6.8%
-2.9%
-5.8%
-15.1%
4.0%
-16
-12
-8
-4
0
4
8
12
-16
-12
-8
-4
0
4
8
12
'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
GDP US IP
GDP
US IP
0
20
40
60
80
100
120
140
0
20
40
60
80
100
120
140
1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
120.6%
50
Total U.S. Public Debt
(% of GDP)
The Long View…
Age Group US China India Ger Mex Braz Japan Can
65 & older 19.6 17.2 8.9 27.9 11.5 12.2 32.2 24.8
40-64 29.0 37.9 28.9 32.9 29.7 32.7 32.8 30.8
20-39 25.4 24.0 31.0 21.5 28.9 29.1 19.5 23.7
less than 20 25.9 21.0 31.4 17.6 29.9 25.9 15.6 20.6
Estimated Percent of Total Population in 2030
52
Share of Population Age 65 and Over
U.S. Dependence on Foreign Oil Declining Net imports as a share of domestic consumption
Source: Energy Information Administration 53
60.4% 59.9% 58.2% 57.0% 51.5% 49.2%
44.7% 40.0%
32.9% 26.9%
0%
10%
20%
30%
40%
50%
60%
70%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
1. Near –Sourcing 2. Technology 3. Capital vs. Labor 4. Energy 5. Consumer base
45% increase in Robotics N.O. in 2014 in this industry alone
56
Look for More Opportunities in These Sectors
► Energy Distribution ► Housing
► Water
Distribution/Conservation ► Printed Electronics
► Infrastructure ► Robotics
► Vocational Education ► Security
► Health Care ► 3-D Printing
► Food ► Natural Resources (Harvesting/Conserving)
► Mexico ► Entertainment
The next Great Depression is coming.
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58
ITR Management Objectives™
Preparing for the Rise Ahead
1. Budget for the rise…do you have enough….
2. Invest in customer market research to reduce price sensitivity
3. Make sure your training and retention programs are top notch
4. Marketing and advertising spending increasingly effective
5. Drive efficiencies with technology
6. Hire sales people and leaders
7. Lock in costs toward the end of 2015
8. Expand credit offerings to garner market share
9. What are you going to do to avoid 2019?
Source: Census Bureau
Income by Household % in 1967 % in 2013
Less than $35,000 39.3% 34.4%
$35,000 to $200,000 59.8% 60.8%
Over $200,000 0.9% 4.8%
Household Distribution by Income Level
Source:
Census Bureau
39.3% 34.4%
59.8% 60.8%
0.9% 4.8%
0
10
20
30
40
50
60
70 Percentage
$ 0 - 35k
$ 35k - 200k
$ 200k +
60
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