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Asia Pacific Economic OutlookOctober 2014

CambodiaChinaJapanTaiwan

CambodiaSet to reap the benefits of political reconciliation

By Akrur Barua

CAMBODIA’S political troubles, which had threatened to affect the economy, seem to

have abated. In a deal in July, the opposition Cambodia National Rescue Party (CNRP) announced its decision to join parliament, which it had boycotted since disputed election results last year. The government agreed to a number of concessions, including a relatively more independent election commission. The current patch-up between opposing political parties augurs well for stability in Cambodia. It is yet another step toward a more stable democracy. Both parties can now get back to the business of reforming the economy and tackling the myriad challenges it faces.

GDP growth in 2013 confirmed at 7.5 percent

Latest data from the National Institute of Statistics (NIS) reveal that the economy grew 7.5 percent in 2013, up from 7.3 percent

in 2012. The uptick in growth was in spite of floods in September and October, which affected agriculture, and political unrest that had threatened to spill to the garments and footwear sector. According to the revised data, industries grew by a stellar 11 percent in 2013, aided by a strong exports sector. Services growth also picked up (8.7 percent), aided by tourism (a 17.5 percent rise in arrivals), real estate services, and wholesale and retail trade. Interestingly, the NIS’s growth figure for 2013 is higher than the 7.0 percent rise estimated by the International Monetary Fund (IMF) and the Asian Development Bank.1 Both had expected growth to slow last year due to politi-cal uncertainty and floods.

Healthy growth expected in 2014

The economy is likely to remain strong this year, growing by about 7.2–7.7 percent.

2

Exports, primarily garments and footwear, will again be a key growth driver; recent data reveal a 20 percent year-over-year rise in exports in the first five months of 2014. The sector will also benefit from investments from China as factories relocate from the mainland due to cost advantages, and from Vietnam due to recent anti-China riots there. Tourism is likely to pick up in the second half as tourist arrivals accelerate (due to lower political ten-sions) from a modest 5.2 percent rise in the first half. The development of new tourist destina-tions and infrastructure improvements, including a $200 million upgrade of the Phnom Penh and Siem Reap airports, will help.2 These upgrades are one of many infra-structure investments, which, along with greater housing demand, will keep construction activity strong in the medium term.

Political reconciliation a major positive step

In a huge boost to stability, the opposition CNRP and the ruling Cambodian People’s Party (CPP) decided to mend fences after nearly a year of acrimony. Of particular impor-tance is the CNRP’s decision to return to par-liament, which it had boycotted since last year’s elections. In return, the government agreed to a host of measures including the release of key opposition party leaders from prison and reforms to the election commission. The wider deal, if implemented, will significantly enhance political stability, thereby reassuring foreign investors. Moreover, the opposition’s pres-ence will ensure greater legitimacy to any new legislation. Given CNRP’s campaign promise, its legislative participation could lead to more efforts to improve working conditions in the country’s industrial sector, including higher minimum wages.

Need for long-term de-dollarization strategy

High dollarization is arguably one of Cambodia’s main long-term concerns. Foreign currency deposits (mostly dollar denomi-nated) account for 96 percent of total deposits and 88 percent of liquidity (M2). At present, this does not seem much of a problem as the country’s relatively large exports revenue,

strong inflows of foreign aid and investment inflows, and tourism receipts are mostly in dollars. However, as the economy matures, de-dollarization will be necessary for effec-tive monetary policy, including banking and financial oversight. As of now, extensive use of the US dollar impacts two key functions of the National Bank of Cambodia (NBC). First, it does not allow the NBC to act as the lender of last resort, thereby removing one of the key pillars of a stable banking system. Second, it does not allow the central bank to regulate the domestic economy through its most effective tool: interest rates.

To solve this, authorities must first try to put strong institutions in place, includ-ing a healthy interbank money market. Also needed is prudent macroeconomic manage-ment, including stable fiscal and external balances, and strong reserves. The latter will come in handy if de-dollarization efforts put pressure on the local currency (which it most likely will). Authorities can then proceed with specific de-dollarization efforts. The IMF, for example, suggests measures such as differential reserve requirements for dol-lar- and Cambodian riel–denominated assets,

Both parties can now get back to the business of reforming the economy and tackling the myriad challenges it faces.

3

regulation to denote all prices in the market in riels, and strict controls on risks related to foreign currency loans. However, any such effort has to be gradual because rushed efforts could lead to massive dollar outflow and strong currency depreciation, thereby destabilizing the economy.

Toward better fiscal health and a diversified economy

Fiscal reforms are another concern. The government has made a start by trying to widen the tax base. However, it needs to do more. It should aim for a nascent government bond market in the medium term; issuing treasury securities instead of drawing down deposits at the NBC could be a first step. It also needs to innovate to bring people and busi-nesses into the formal economy, both to widen fiscal oversight and to diversify the economy. The government’s recent effort to enable small and medium enterprises (SMEs) to register online is encouraging. Policymakers need to develop the SME sector, given its role in job creation and economic growth. A recent economic census revealed that 97.7 percent of the nearly 500,000 enterprises surveyed were micro enterprises; the share of SMEs was a puny 2.1 percent.3 This needs to change. To do so, authorities also need to improve education and technology, possibly in collaboration with international partners. Currently, in the World Economic Forum’s global competitiveness indices, Cambodia ranks a poor 116 among 148 countries in higher education and training; its rank in technological readiness (97) is not impressive either.4

Environmental laws and other regulations

Cambodia needs efficient and transparent mechanisms to deal with problems pertain-ing to land acquisitions and the environment. Focus on the latter is increasing due to the recurrence of floods in low-lying areas and fears of some infrastructure projects’ environ-mental impact. Policymakers need to frame a mechanism to resolve these environmental conflicts without compromising on economic development efforts. Transparent rules will also help address issues related to land acquisitions. The CNRP’s return to parliament is likely to help increase focus on some of these concerns since the party had campaigned on these issues during the national elections.

Large waves in a calm sea

Cambodia needs to gradually address these long-term challenges, even as it rides on a strong economy. In fact, as opposing politi-cal parties mend fences, policymakers should introduce key reforms to diversify the econ-omy, upgrade human capital, strengthen insti-tutions, and tackle environmental problems. To delay will not be prudent. Already economic competition is increasing in Cambodia’s neigh-borhood. It will likely get more intense after the proposed launch of the ASEAN Economic Community in December 2015. No longer can Cambodia rest on its previous decade’s record of strong growth. It needs to think of the next big steps—and fast.

Endnotes

1. International Monetary Fund, “World economic outlook database,” April 2014; International Monetary Fund, “Press release: IMF executive board concludes 2013 Article IV consultation with Cambodia,” February 2014; Asian Develop-ment Bank, “Asian Development Bank outlook 2014: Cambodia,” September 2014.

2. Oxford Economics, “Country economic forecast: Cambodia,” June 2014.

3. Asian Development Bank, “Asian Development Bank outlook 2014: Cambodia,” September 2014.

4. World Economic Forum, The global competitiveness report 2013–14, September 2014.

4

Growth

CHINA’S economy is exhibiting weakness. Several indicators point to slower growth.

These include retail sales, industrial produc-tion, investment spending, and bank lending. The latter was especially notable. The central bank reports that aggregate financing, the broadest measure of new credit, was just 273.1 billion Chinese yuan in July, the lowest figure since October 2008 and far lower than inves-tors had anticipated. The broad money supply, M2, was up 13.5 percent from a year earlier, also less than expected. As for nonfinancial indicators of economic activity, the govern-ment reported that retail sales were up 12.2 percent in July versus a year earlier, industrial production was up 9.2 percent, and fixed asset investment decelerated in July. In addition, the purchasing managers’ index (PMI) for Chinese

manufacturing fell in August to 50.2, indicat-ing that the sector is just barely growing.

What does all of this mean? It indicates that the economy continues to sputter relative to past performance. It probably means that the slump in the property market is taking a toll both on economic activity and on the willing-ness of banks to lend. It also raises the pos-sibility that the government will seek to boost growth through stimulus measures beyond what it has already done. So far this year, fis-cal outlays in such areas as rail construction, shanty-town reconstruction, and environmen-tal protection investments have amounted to nearly 1.0 percent of GDP.

On the other hand, in the critical trade sector, Chinese exports increased 14.5 percent in July and 9.4 percent in August versus a year earlier. It appears that an improvement in global demand is benefiting China’s economy.

ChinaEconomy continues to sputter

By Dr. Ira Kalish

5

In the recent past, strong export data were often attributed to fake invoicing. The latest commentary suggests this may not necessarily be the case now. Rather, the strength of exports this past summer might have been partly due to delays in shipments in prior months. Exports to the United States were up 11.4 percent, while exports to the European Union were up 12.1 percent in August. Meanwhile, imports declined, leading to a surge in the trade surplus. Also, the services sector appears to be strengthening significantly: The PMI for services published by Markit increased from 50.0 in July to 54.1 in August, a 17- month high.

Housing

The prices of new homes fell in 64 of the 70 major cities that the government moni-tors. Prices of existing homes fell in 65 of the 70 cities. For the 70 cities as a group, prices were down 0.9 percent from June to July. This was the third consecutive month in which prices fell. The drop in prices reflects a drop in demand. Indeed, sales of homes fell 28 percent in July. This reflects tight mortgage lending conditions, especially given the glut of prop-erty in the market and the efforts of the central bank to dampen mortgage lending. It also reflects weak demand as speculative purchases become less attractive and property prices start to fall; some consumers may be taking a wait-and-see attitude because they believe the market correction is not complete. By June, 36 major cities had implemented measures to boost home sales. These do not appear have the desired effect. The problem is that the central government has removed incentives for home purchases, such as mortgage dis-counts, although it has loosened restrictions for first-time home buyers. The result is that financing costs have effectively risen for many purchasers. While the central government has attempted to ease a housing bubble, local gov-ernments are keen to keep the party going lest construction activity wane.

Finance

The loan loss reserves of Chinese banks have fallen to their lowest level in three years relative to bad debts. The coverage ratio, which is the amount of loan loss reserves in relation to the level of nonperforming loans, fell to 262.9 in July. The decline in the ratio is largely due to a rise in the volume of nonperforming loans. Also, it is important to note that many potentially bad assets reside off the balance sheets of commercial banks in shadow banking vehicles such as trust companies. While banks are not legally obligated to cover the losses of these vehicles, it is widely expected that they will do so.

A significant component of China’s shadow banking system is the network of trust compa-nies. An industry group reports that trust com-pany assets are now expanding at their slowest pace in two years.1 This reflects the govern-ment’s efforts to restrain the growth of shadow banking. Trust company assets expanded 6.4 percent in June from three months earlier. Assets actually declined from May to June, the first time such a decline was reported. In the past several years, trust company assets had expanded at about 50 percent per year. Assets have now reached 12.5 trillion yuan (or about $2 trillion). Trust companies raise money from wealthy individuals and others, promis-ing them a return far higher than what can be achieved through the formal banking system. The trusts lend money to businesses. Lately, there have been problems in repaying loans from trust companies, raising the specter of trust company default. Banks have participated in efforts to rescue trusts. As such, the gov-ernment has tightened the rules for creating new trust products. The government wants to limit the growth of shadow banking, but not necessarily overall credit. A slowdown in credit growth could threaten the ability of the econ-omy to maintain adequate growth. That, in turn, could increase the likelihood of default. Thus the government is caught between a rock and a hard place.

6 | Asia Pacific Economic Outlook

Why are foreign manufacturers not so keen on China?

Investment

Foreign direct investment (FDI) into China has fallen. In July, FDI was $7.8 billion, the lowest in two years. For the first seven months of 2014, FDI was $71.1 billion, 0.4 percent below a year earlier and the first such decline in 17 months. Foreign investment in the ser-vices sector continued to grow, but investment in manufacturing declined. Investment in services was up 11.4 percent in the first seven months of the year versus a year earlier, while investment in manufacturing declined 14.3 percent. Investment from the United States, Western Europe, Japan, and Southeast Asia declined, while invest-ment from the United Kingdom and South Korea increased.

Why are foreign manufacturers not so keen on China? First, rising Chinese wages and a higher-valued Chinese currency both hurt export competi-tiveness. Second, China’s economy is growing more slowly, thus making the domestic market less attractive. Third, weakness in global mar-kets such as Europe and other emerging mar-kets make export less attractive. Nevertheless, the level of FDI remains quite high compared with most other countries. Also, FDI accounts for only a small share of China’s invest-ment spending. On the other hand, foreign

investment is important in that it brings in new technologies and is often more productive than domestically funded investments.

Inflation

Chinese inflation is now relatively benign, with consumer prices in July up only 2.3 per-cent from a year earlier—the same rate of infla-tion as in June. Meanwhile, producer prices fell 0.9 percent in July, the 29th consecutive month in which producer prices have fallen. The lat-ter reflects the continuing problem of excess capacity in industry, itself driven by overinvest-

ment on the part of state-run businesses. The low consumer price inflation represents a triumph for monetary policy and suggests that the central bank now has consid-erable wiggle room to engage in more aggres-sive policies if needed. Normally, central banks

struggle to balance the competing goals of low inflation and strong economic growth. China’s central bank, however, is also attempting to restrain excessive growth of credit, especially in the property market, lest the collapse of a bubble in the housing market create problems for the financial sector. Thus, although infla-tion is now quite low, the central bank cannot put its foot on the accelerator with impunity.

Endnotes

1. Bloomberg News, “China trust asset growth slows in shadow banking campaign,” August 12, 2014, http://www.bloomberg.com/news/2014-08-12/china-s-trust-asset-growth-slows-amid-shadow-banking-crackdown.html.

October 2014 | 7

JapanGovernment in dilemma over raising taxes again

By Dr. Rumki Majumdar

THE increase in the national sales tax that went into effect in April 2014 aimed to

improve the long-term health of the nation’s pension system. However, it was feared that the tax increase could drag down economic growth. The GDP data for the second quar-ter confirm that, as feared, the economy has contracted at an annual rate of 7.1 percent. The recent data revisions show a contraction of 0.3 points more than the government’s first estimate published in mid-August. This is the steepest fall in growth since the first quarter of 2009, during the global financial crisis.

The downward revision was largely due to a fall in business investment that was sharper than previously estimated. Real private nonres-idential investment fell 5.1 percent quarter over quarter during April–June, more than double of what the government initially had estimated.

The increase in the sales tax affected private consumption expenditure, which accounts for approximately 60 percent of economic activity. Real private consumption expenditure fell 5.1 percent quarter over quarter due to a signifi-cant fall in spending on durable goods, such as furniture and household utensils, and on hous-ing. The latest retail sales and factory output figures indicate a negative impact on sales due to the fall in consumption. Consumers held back on spending because they had already stocked up ahead of the tax hike. The rise in prices due to an easy monetary policy and the tax increase squeezed their spending budget as well. In addition, real wages fell 3.2 percent year over year in Q2 2014; this was the steepest drop in 18 quarters. Real wages have contin-ued to fall despite the government’s effort to persuade companies to increase wages.


Why wages have failed to grow

One of the philosophies behind Abenomics is that as the economy’s health is restored, prices will rise. Companies will earn more profits, which, in turn, will improve real wages and lift consumer spending. This will further boost investment in the economy, and a virtu-ous cycle will set in, raising prices further. Tight labor market conditions due to strong demand for labor in construction, a low unem-ployment rate, and aging demographics too will put an upward pressure on wages.

However, real wages have continued to fall. One of the reasons has been a rise in tempo-rary employment as companies avoid hiring permanent employees, who are highly paid and have job protection. After the implementa-

tion of aggressive fiscal and monetary policies, there has been a sharp rise in new jobs, which helped restore economic growth. However, due to global uncertainties and low business confidence, Japanese companies have preferred employing part-time workers or contract employees with lower pay and benefits. These workers have limited influence on wage deci-sions and are not fully protected by labor laws. In Q1 2014, nonregular employment touched a record high of 37.9 percent of all jobs. It fell marginally to 36.8 percent in the subsequent quarter, but the numbers have remained close to the record high. Although tight labor

market conditions and rising consumer prices are expected to push up wages eventually, how long it will take to impact wages is not known for sure. Until then, consumers will continue to feel the pinch of rising prices, which will keep consumer spending low.

Poor exports

The other growth driver, exports, remains sluggish. Real exports fell 0.5 percent quarter over quarter in Q2 2014. Despite a weaker currency, exports have failed to take off in the last few years. In addition, the continuing shift of production facility overseas has impacted exports from Japan. While growth in imports was lower in Q2 2014 due to poor domestic demand, in general, the weak currency and

higher crude oil prices have resulted in relatively higher import bills in the last few years. As a result, the current account surplus has declined in the past few quarters.

The fall in export growth has also been an outcome of structural changes in the economy. While growth in exports has picked up in the rest of Asia due to an improved US economy, Japanese manufacturers are losing their hold on the

global market. Manufacturers, despite making profits, are not willing to invest. This is because global uncertainties and a lack of confidence in reforms are discouraging businesses from reinvesting their profits to expand operations.

Will the government raise taxes again?

It is clear that Japan is going through a tough time as its growth drivers fail to boost the economy. What complicates the situa-tion is that soon the government has to take a decision on whether to raise the national

Global uncertainties and a lack of confidence in reforms are discouraging businesses from reinvesting their profits to expand operations.

October 2014 | 9

sales tax to 10 percent next year after raising it from 5 percent to 8 percent in April. An increase in taxes will help curb Japan’s large and rising government debt. However, it is also feared that it may adversely affect consumption expenditure, leading to a recession.

Weak economic data for July suggest that there is low possibility of a strong economic rebound in Q3 2014 as exports may continue to remain subdued. If the government decides to raise taxes at one go, it would amount to a hike of five percentage points in little more than a year. This could result in a considerable blow to the economy. However, if taxes are not raised, businesses and investors may lose confidence in the prime minister’s ability to

bring in substantial economic reforms. Thus Japan’s government has to be more cautious about raising taxes again. The decision has to be taken before the end of 2014.

Policymakers and close aides to the prime minister have suggested that the government should introduce taxes in a phased manner. This will soften the impact and prevent further damage to the economy. The government may continue to implement the first two arrows of Abenomics—monetary and fiscal stimulus—to help the economy weather the situation. Whatever the decision, it will be a difficult path for the government to tread, and Japan’s recov-ery will depend on it.


TAIWAN’S economic recovery gained momentum in the first half of 2014 and

recorded growth of 3.1 and 3.8 percent year over year in Q1 and Q2 2014, respectively. Growth was primarily boosted by a strong revival in private consumption demand and exports. Private consumption expenditure grew 2.7 percent in the first half of 2014, sup-ported by a lower unemployment rate and rising wages. Taiwan’s exports registered posi-tive annual growth for the sixth consecutive month in July and grew 4.3 percent in the first half of 2014 due to the mild recovery of global demand. Growth in imports remained low, and the economy recorded a double-digit current account surplus during this period.

The Taiwan business indicator com-piled by the National Development Council showed that the domestic economy is steadily

recovering.1 The overall monitoring indica-tor suggested steady growth for the next six months. Taiwan’s manufacturing sector too signaled an improvement in overall business conditions. According to data released by the Ministry of Economic Affairs, the industrial production (IP) index increased 6.1 percent year over in July 2014, while the manufac-turing index rose 6.8 percent.2 The IP index moved up 4.5 percent year over year in the first half of 2014. The HSBC Taiwan purchasing managers’ index rose from 54 in June to 55.8 in July, marking the largest rise since April 2011. The IP rise was supported by an all-round increase in total output, total new orders, and new export orders. Taiwanese manufacturers raised production levels for 11 consecutive months, and in July output grew at its fastest rate since January 2014. Improvement in the

TaiwanStill going strong

By Dr. Rumki Majumdar

October 2014 | 11

industry sector indicates sustained growth in production activities that began last year.

The Taiwan Institute of Economic Research (TIER) reported improvement in both the services sector and the construction sector composite indices.3 Growth in the former

went up 1.2 percent month over month, while the latter increased 4.1 percent month over month in June. The services sector indicator has been rising consistently, and the sector has maintained steady growth. However, the con-struction sector indicator, which experienced a significant decline in the first five months of 2014, improved for the first time in June. The uptick was primarily due to more public construction being undertaken in the second half of 2014.

The growth outlook for 2014 remains positive for Taiwan’s trade-intensive economy. TIER recently revised the annual growth forecast upward. It foresees stronger business sentiments and investment activities due to improving external prospects, and increased household spending reinforced by rising employment. However, Taiwan’s high depen-dence on China for trade, the lack of free-trade agreements with other nations, and the elec-tronics sector’s deteriorating performance are

impacting the country’s manufacturing com-petitiveness. An aging population is also a con-cern for the economy. Therefore, the economy’s vulnerability to external and internal factors will likely pose risks to long-term growth.

The economy is showing some signs of heating up, with the consumer price index (CPI) rising 1.6 percent year over year in June. The wholesale price index also increased 0.8 percent year over year, primarily due to rising domestic consumption expenditures and input prices. Average input prices rose sharply in July, and the rate of input inflation was the fastest since May 2011. An increase in electric-ity tariffs, introduced by the government in October 2013 to reduce subsidies on power purchase, and a rise in pork prices weighed heavily on consumer prices. Thus the economy is experiencing both demand-pull and cost-push inflation. The CPI will most likely rise faster in 2014 relative to last year by one per-centage point or more. However, inflation is much lower than in neighboring countries.

Monetary policy and financial sector

The Central Bank of the Republic of China (Taiwan), also known as the CBC, has kept policy rates unchanged; the benchmark discount rate has been held steady at 1.875 percent. Since inflation is not a concern and inflation expectations are subdued, monetary policies will likely remain unchanged for the rest of 2014. The CBC might increase policy rates in 2015 in response to rising rates in the United States and other developed economies. However, the probability of a tighter monetary policy will likely be low due to continued global uncertainties and the authorities’ desire to keep the cost of investment down.

On the other hand, prolonged easy mone-tary policy increases the risk of financial insta-bility in the economy. Low rates have led banks to offer high-valued housing loans without

Low rates have led banks to offer high-valued housing loans without fully complying with the general principles of loan review and credit extension.


fully complying with the general principles of loan review and credit extension. Property prices have soared due to low interest rates, low property tax rates, high banking credit to the housing sector, and a high level of global liquidity that has mostly flowed into Taiwan’s real estate.

The financial sector is highly exposed to the real estate sector. In order to moderate risks in

Endnotes

1. National Development Council, “Taiwan business indicators in July 2014,” August 27, 2014, http://www.ndc.gov.tw/encontent/m1.aspx?sNo=0061268#.U_2h4P8rj6E.

2. Department of Statistics, Ministry of Economic Affairs, Taiwan, “Monthly report of industrial production statistics,” July 2014, http://www.moea.gov.tw/Mns/dos_e/content/Content.aspx?menu_id=6758.

3. Taiwan Institute of Economic Research, “The Taiwanese economy in June 2014,” August 25, 2014, http://english.tier.org.tw/eng_forecast/monthly.asp.

the latter, the CBC lowered the loan-to-value ratio requirement on mortgages for luxury and second homes in June to stem speculation and risk-taking investments. However, the mea-sures to contain banks’ exposure to real estate loans so far have not been sufficient. The vul-nerable housing sector, together with increas-ing dependence on China, poses significant risks for the financial sector of the economy.

October 2014 | 13

Global Economic Outlook3rd Quarter 2014

COMPARISON OF GAINER STATES: MINING, CONSTRUCTION, AND MANUFACTURING

Issues by the NumbersThe geography of jobs: Mapping the recoveryJune 2014

Source: US Department of Labor, Bureau of Labor Statistics, Current Employment Statistics.Graphic: Deloitte University Press | dupress.com

Copyright © 2014 Deloitte Development LLC. All rights reserved.

-7.1%Colorado

-6.9%Iowa

-6.9%Montana

-8.2%Louisiana

-5.4%Texas

0%South Dakota

-13.9%Massachusetts

-7.1%Minnesota

-16.9%New York

-2.7%North Dakota

-16.6%West Virginia

-5.9%Nebraska

-3%Washington

-6%Utah

9.6%Oklahoma20.7%

Alaska

MANUFACTURING

-20.1%Colorado

-4.1%Iowa

-25.1%Montana

-9.1%Minnesota

-7%New York

-26.6%Washington

-20.8%Utah

3.7%Oklahoma

10.2%District of Columbia

-2.3%Alaska

0%Louisiana

-5.1%Texas

-8.9%South Dakota

-9.9%Massachusetts

71.9%North Dakota

-12.3%West Virginia

-7.3%Nebraska

CONSTRUCTION

20.8%Colorado

8.6%Louisiana

31.4%Texas

17.3%Nebraska

-31.4%Washington

24.6%Oklahoma21.3%

Alaska

3.9%Iowa

0%South Dakota

-41.6%Massachusetts

19.5%Minnesota

19.2%West Virginia

17%Montana

-14.3%New York

378.1%North Dakota

13.8%Utah

MINING

3.7%Colorado

1.3%Iowa

2.5%Massachusetts

1.3%Minnesota

2.4%New York

27.3%North Dakota

1.4%West Virginia

7%District of Columbia

1.4%Washington

4.5%Utah

6.4%Alaska

1.5%Montana

1.3%Louisiana

9%Texas

3%South Dakota

1.9%Nebraska

3%Oklahoma

GAINER STATES’TOTAL

EMPLOYMENT CHANGE

(all economic sectors)

Only 16 states and the

District of Columbia

currently have

employment at least

1 percent above their pre-recession

employment levels.

Among the states that

have experienced the

highest overall

employment gains are

the beneficiaries of

expanding energy production.

Construction and

manufacturing remain

20 percent and 12 percent below

their December 2007

levels for the economy as

a whole.

States shaded green experienced net growth in

employment between December 2007 and

April 2014, while states shaded red experienced

net losses in employment over the same period.

Additional resources

Deloitte Research thought leadershipGlobal Economic Outlook, Q3 2014: Eurozone, China, United States, Japan, India, Russia, Brazil, United Kingdom

United States Economic Forecast, Volume 2, Issue 3

Issues by the Numbers, June 2014: The geography of jobs: Mapping the recovery

Please visit www.deloitte.com/research for the latest Deloitte Research thought leadership or contact Deloitte Services LP at: [email protected].

For more information about Deloitte Research, please contact John Shumadine, Director, Deloitte Research, part of Deloitte Services LP, at +1 703.251.1800 or via e-mail at [email protected].


Contact information

Dr. Ira Kalish is chief global economist of Deloitte Touche Tohmatsu Limited.

Dr. Rumki Majumdar is a macroeconomist and a manager at Deloitte Research, Deloitte Services LP.

Akrur Barua is an economist and a manager at Deloitte Research, Deloitte Services LP.

About the authors

Global Economics TeamAditi RaoDeloitte Research Deloitte Services LPIndia Tel: +1 615 209 3941E-mail: [email protected]

Dr. Ira KalishDeloitte Touche Tohmatsu LimitedUSATel: +1.213.688.4765E-mail: [email protected]

Dr. Rumki MajumdarDeloitte Research Deloitte Services LPIndiaTel: +1 615 209 4090E-mail: [email protected]

Akrur BaruaDeloitte Research Deloitte Services LP IndiaTel: +1 678 299 9766E-mail: [email protected]

Chinese Services Group Leaders Global Chinese Services Group Lawrence Chia Deloitte Touche Tohmatsu Limited China Tel: +86 10 8520 7758 E-mail: [email protected] US Chinese Services Group

Mark Robinson Deloitte Touche Tohmatsu LimitedCanada Tel: +1 416 601 6065E-mail: [email protected]

Japanese Services Group Leaders Global Japanese Services Group Hitoshi Matsumoto Deloitte Touche Tohmatsu LLC Japan Tel: +09 09 688 8396 E-mail: [email protected] Japanese Services Group

John Jeffrey Deloitte LLP USA Tel: +1 212 436 3061 E-mail: [email protected]

Global Industry LeadersConsumer BusinessAntoine de RiedmattenDeloitte Touche Tohmatsu LimitedFranceTel: +33.1.55.61.21.97E-mail: [email protected]

Energy & ResourcesCarl HughesDeloitte Touche Tohmatsu LimitedUKTel: +44.20.7007.0858E-mail: [email protected]

Financial ServicesChris HarveyDeloitte LLPUK Tel: +44.20.7007.1829E-mail: [email protected]

Life Sciences & Health CarePete MooneyDeloitte Touche Tohmatsu LimitedUSATel: +1.617.437.2933E-mail: [email protected]

ManufacturingTim HanleyDeloitte Touche Tohmatsu LimitedUSATel: +1.414.977.2520E-mail: [email protected]

Public SectorPaul MacmillanDeloitte Touch Tohmatsu LimitedCanadaTel: +1.416.874.4203E-mail: [email protected]

Telecommunications, Media & TechnologyJolyon BarkerDeloitte & Touche LLP UKTel: +44 20 7007 1818E-mail: [email protected]

October 2014 | 15

US Industry Leaders Banking & Securities and Financial Services Robert ContriDeloitte LLP USA Tel: +1 212 436 2043 E-mail: [email protected]

Consumer & Industrial Products Craig Giffi Deloitte LLP USA Tel: +1 216 830 6604 E-mail: [email protected]

Health Plans and Health Sciences & Government John Bigalke Deloitte LLP USA Tel: +1 407 246 8235 E-mail: [email protected]

Power & Utilities and Energy & Resources John McCue Deloitte LLP USA Tel: +216 830 6606 E-mail: [email protected]

Telecommunications, Media & Technology Eric Openshaw Deloitte LLP USA Tel: +1 714 913 1370 E-mail: [email protected]

Asia Pacific Industry Leaders Consumer Business Yoshio Matsushita Deloitte Touche Tohmatsu Japan Tel: +81 3 4218 7502 E-mail: [email protected]

Energy & Resources Adi Karev Deloitte Touche Tohmatsu LLC Hong Kong Tel: +852 2852 6442 E-mail: [email protected]

Financial ServicesKaren Bowman Deloitte & Touche LLP Hong Kong Tel: +852 2852 6786 E-mail: [email protected]

Life Sciences & Health Care Ko Asami Deloitte Touche Tohmatsu Japan Tel: +81 3 4218 7419 E-mail: [email protected]

Manufacturing Kumar Kandaswami Deloitte Touche Tohmatsu India Tel: +91 44 6688 5401 E-mail: [email protected]

Telecommunications, Media & Technology Yoshi Asaeda Deloitte Touche Tohmatsu Japan Tel: +81 3 6213 3488 E-mail: [email protected]


October 2014 | 17

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