The Washington Region’s Economy in 2019and Beyond

January 29, 2020

IREM 2020 Industry Forecast & Trade Show

Jeannette ChapmanDeputy Director and Senior Research Associate

Stephen S. Fuller InstituteSchar School of Policy and Government

George Mason University

1. The Aging National Business Expansion

05

101520253035404550

% C

hang

e in

GDP*

Quarters After Trough

1991-Q1*

1982-Q3***

2009-Q2

2001-Q4****

Recession Recovery Patterns of GDPPast Four Recessions*

*in 1992 or 2009 Chained Dollars; *Quarters 40+ include the 2001 Recession ***Quarters 32+ include the 1991 Recession; ****Quarters 25+ include the 2009 Recession Sources: Bureau of Economic Analysis, The Stephen S. Fuller Institute at the Schar School, GMU

-6,000-5,000-4,000-3,000-2,000-1,000

01,0002,0003,0004,000

U.S. Annual Change in Payroll JobsMonth-Over-The-Year*

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU*Reflects the preliminary revisions for March 2018 through March 2019; Includes temporary Census hires

(000s) Nov 19 = +2.2 M

(25.0)

(20.0)

(15.0)

(10.0)

(5.0)

-

5.0

10.0

15.0

U.S. Leading IndexMonth-Over-Year Percent Change

Sources: The Conference Board, The Stephen S. Fuller Institute at the Schar School, GMU

-3%

-2%

-1%

0%

1%

2%

3%

4%

U.S. GDP2007 – 2018 – 2024 (Annual % Change)

Forecast

Sources: IHS Markit (December 2019); The Stephen S. Fuller Institute at the Schar School, GMU (forecast as of December 2019)

-20%

-10%

0%

10%

20%

30%

40%

50%

Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Present Expectations

U.S. Consumer ConfidenceMonthly Over-the-Year Change

January 2015 – December 2019

Sources: The Conference Board, The Stephen S. Fuller Institute at the Schar School, GMU

2. The Washington Region’s Expansion

40.3

(80.0) (60.0) (40.0) (20.0)

- 20.0 40.0 60.0 80.0

100.0 120.0 140.0

1990 – 2018 Average: 37,300

Job Change in the Washington Region1991 – 2019* (000s)

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU*2018 and 2019 include projected revisions to the preliminary data and do not align with the estimates published by BLS.

40.3

(80.0) (60.0) (40.0) (20.0)

- 20.0 40.0 60.0 80.0

100.0 120.0 140.0

2015-2019: 48,300

Job Change in the Washington Region1991 – 2019* (000s)

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU*2018 and 2019 include projected revisions to the preliminary data and do not align with the estimates published by BLS.

Prior Expansions: 61,300

3.1% 2.9% 2.7% 2.7% 2.6%2.0% 2.0%

1.3% 1.2% 1.2% 1.2% 1.2% 1.0%

0.3%

-0.1%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%

15 Largest U.S. Job Markets2019* Job Change

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU*Through November **Includes projected revisions to the preliminary data and do not align with the estimates published by BLS.

25.713.9 12.7 16.3 17.3 18.3 18.0 13.4

(20.0) (10.0)

- 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Private, Office-Using All Other

Private Sector Job Change in the Washington Region2000 – 2019* (in thousands)

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU*Through October; includes projected revisions to the preliminary data and do not align with the estimates published by BLS.

2007-2014: +15,650 Office-Using

0.70.0

2.1-0.7

0.07.9

1.0-2.1

4.65.0

-0.89.0

13.6

-10 -5 0 5 10 15 20

ManufacturingWholesale Trade

Transportation & UtilitiesInformation Services

Financial ActivitiesConstruction

Other ServicesRetail Trade

Leisure & HospitalityState & Local Govt

Federal GovtEducation & Health Services

Professional & Business Services

Washington Region Job Change by Sector, 2019*Ranked by Size in 2018 (000s) Total = 40,300

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU*Through October; includes projected revisions to the preliminary data and do not align with the estimates published by BLS.

-10

0

10

20

30

40

50

Northern VA

D.C.

Suburban MD

Change in Jobs By Sub-State Area, 2014-2019* Monthly Over-the-Year Change (in 000s)

Sources: U.S. Bureau of Labor Statistics, The Stephen S. Fuller Institute at the Schar School, GMU*2018 and 2019 include projected revisions to the preliminary data and do not align with the estimates published by BLS.

3. The Washington Region 3.0?

2.7%

1.1%

4.8%

1.3%

4.7%

1.8%1.0%

2.4%

1.0%

4.8%

3.7% 4.0%

2.9%2.1%

0%

2%

4%

6%

Business &Leisure Travel

Advocacy New Media &Information

BusinessServices

Bio & HealthTech

Info. Comm.Tech.

Science &Security Tech

Washington Region U.S.

Established

Growth in the Washington Region’sAdvanced Industrial Clusters, 2014-2018

Annualized Growth

Sources: U.S. Bureau of Labor Statistics (QCEW), The Stephen S. Fuller Institute at the Schar School, GMU

Emerging

0%

1%

2%

3%

4%

2015 2016 2017 2018

U.S.

Washington Region

The Washington Region’s Established Clusters: Influence, Management Services & Travel

Sources: U.S. Bureau of Labor Statistics (QCEW), The Stephen S. Fuller Institute at the Schar School, GMU

0%

1%

2%

3%

4%

2015 2016 2017 2018

U.S.

Washington Region

Washington Region:Excluding MGM

The Washington Region’s Established Clusters: Influence, Management Services & Travel

Sources: U.S. Bureau of Labor Statistics (QCEW), The Stephen S. Fuller Institute at the Schar School, GMU

0%

1%

2%

3%

4%

2015 2016 2017 2018

U.S.

Washington Region

The Washington Region’s Emerging Clusters: Science, Security, Information & Health Technology

Sources: U.S. Bureau of Labor Statistics (QCEW), The Stephen S. Fuller Institute at the Schar School, GMU

55.6 58.649.8

36.9

69.0 67.5 59.8

45.1

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0Actual Emerging Clusters Performed at U.S. Average

Job Change Scenarios in the Washington Region2015-2018

Sources: U.S. Bureau of Labor Statistics, The Stephen S. Fuller Institute at the Schar School, GMU*2018 and 2019 include projected revisions to the preliminary data and do not align with the estimates published by BLS.

4. The Near-Term Forecast

Employment Change by Sub-State Area(000s)

Source: BLS, IHS Economics, The Stephen S. Fuller Institute at the Schar School, GMU (forecast as of December 2019)*2018 and 2019 include projected revisions to the preliminary data and do not align with the estimates published by BLS.**Residual includes Jefferson, WV and jobs that cannot be attributed to a sub-state area.

2016 2017 2018* 2019* 2020 2021 2022 2023

D.C. 13.1 7.4 8.3 5.9 8.9 4.9 4.2 3.6

Sub. MD 13.4 12.9 4.4 5.4 9.2 7.2 5.2 1.3

No. VA 28.8 21.9 26.8 27.9 22.6 23.6 17.8 12.9Residual** 3.3 7.6 (2.6) 1.1 0.2 0.1 0.2 0.1

REGION 58.6 49.8 36.9 40.3 40.9 35.8 27.4 17.9

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

Washington

U.S.

U.S. GDP and Washington Region GRP 2007 – 2018 – 2023 (Annual % Change)

Forecast

Sources: IHS Markit (December 2019); The Stephen S. Fuller Institute at the Schar School, GMU (forecast as of December 2019)

5. Population Growth

1980, 0.7%

2010, 2.1%

2018, 0.8%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Population Growth Washington Region, 1971 to 2018

Sources: U.S. Census Bureau (Intercensal & v2018 Population Estimates); The Stephen S. Fuller Institute at the Schar School, GMU

(60.0)

(40.0)

(20.0)

-

20.0

40.0

60.0

80.0

100.0

120.0

Net DomesticMigration

Net InternationalMigration

Natural Increase

Total

Population Growth By Component ChangeWashington Region (in 000s)

Sources: U.S. Census Bureau (Intercensal, v2009 and v2017 Population Estimates); The Stephen S. Fuller Institute at the Schar School, GMU*Estimate

2.5%2.2% 2.2% 2.1% 2.0%

1.6%

1.1%0.9%

0.5% 0.5% 0.4% 0.3% 0.2% 0.1%

-0.1%-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%US: +0.9%

Percent Change in 25-34 Years OldsLargest 15 Metros, 2017 - 2018

Sources: U.S. Census Bureau (Vintage 2018 Population Estimates); The Stephen S. Fuller Institute at the Schar School, GMU

- 50,000

100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 1990 2018

Population by Age, Washington Region

Sources: U.S. Census Bureau (1970-79 Intercensal Estimates & v2018 Population Estimates); The Stephen S. Fuller Institute at the Schar School, GMU

05,000

10,00015,00020,00025,00030,00035,00040,00045,000

Private Sector Workers 65+ Transitioning to Fulltime Nonemployment (retirees), Washington Region

Sources: U.S. Census (J2J Flows); The Stephen S. Fuller Institute at the Schar School, GMU

0%

1%

2%

3%

4%

5%

6%

7%

Unemployment Rate, Washington RegionJan 1990 – Oct 2019

Sources: U.S. Bureau of Labor Statistics (Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

October 2019: 3.0%

Questions?For monthly reports on the

Washington region’s economic performance go tosfullerinstitute.gmu.edu

@FullerInstitute