Virginia Association of Economists The Washington Area Economy: Major Conditions and Trends Shaping Its Future Stephen S. Fuller, Ph.D. Dwight Schar Faculty Chair and University Professor Director, Center for Regional Analysis George Mason University March 2, 23 GMU Center for Regional Analysis
Federal Spending Patterns In the Washington Area $ Billions 8 6 4 2 8 6 4 2 Federal Spending Washington MSA Total & Procurement 985 986 987 988 989 99 99 992 993 994 995 996 997 998 999 2 2 22 23 24 25 26 27 28 29 2 Source: US Census, Consolidated Federal Funds Report GMU Center for Regional Analysis 2
$ Billions 9 Federal Spending By Type 984-2 8 7 6 5 4 3 2 Procurement Wages & Salaries Source: US Census, Consolidated Federal Funds Report Federal Procurement in the Washington Metro Area, 98-2 $ Billions 9 8 7 6 5 4 3 2 TOTAL = $867.9 Billion < 8-9 = $96.5 B > < 9- = $27.9 B > < = $563.5 B > Source: US Census, Consolidated Federal Funds Report GMU Center for Regional Analysis 3
$ Billions 7 6 5 4 3 2 2 Federal Procurement Top States VA CA TX MD DC PA FL MA NY GA Source: US Census, Consolidated Federal Funds Report; GMU Center for Regional Analysis 4 35 3 25 Federal Employment in the Washington Metro Area, 95-22 s Eisenhower Kennedy Johnson - 5 + 74 Nixon - Ford Carter Reagan Bush Clinton Bush 2 + 35 + 7-8.6-37 + 24 Obama +7.5 2 5 95 955 96 965 97 975 98 985 99 995 2 25 2 GMU Center for Regional Analysis 4
$ Billions 35 3 25 2 5 5 2 Federal Wages & Salaries Top States TX CA DC VA GA NC MD NY FL WA Source: US Census, Consolidated Federal Funds Report: GMU Center for Regional Analysis 2 Structure of the Greater Washington Economy Non-Local Business 2. % Other Federal.7 % Local Serving Activities 34.8% Total Federal 39.8% Fed Wages & Salaries.% Procurement 9.% Source: GMU Center for Regional Analysis Other.5% Health/Ed. 4.5% Assn.8% Int l 3.5% GMU Center for Regional Analysis 5
Federal Procurement in the Washington Metro Area, 98-22 $ Billions 9 8 7 6 5 4 3 2 TOTAL = $,23.5 Billion < 8-9 = $96.5 B > < 9- = $27.9 B > < = $563.5 B > $8. B $75.6 B Source: US Census, Consolidated Federal Funds Report Federal Government Washington MSA (s) Annual Data 3 25 2 5 5-5 - -5-2 22 25 Annual Month over Year 28 29 2 2 22 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Tot 22 = 377,4 GMU Center for Regional Analysis 6
Summary for Federal Spending Trends in the Washington Metropolitan Area, 2-22 Federal Procurement Outlays declined 8.4% between FY 2 and FY 22. Federal employment has declined since peaking in y 2, losing 8,7 jobs or 2.25%. Federal payroll declined by.6% between FY 2 and FY 2 and will continue to decline as the workforce shrinks and older workers retire and are replaced by younger workers. The Relative Importance of Federal Spending in the Maryland-DC-Virginia Region The Region s Share of U.S. Population 4.7% The Region s Share of All Federal $s 9.% The Region s Share of All DOD $s 5.% Share of Total Federal Spending Subject to Sequestration 2.% Federal Spending as a Percent of the Region s GRP in 2 39.% GMU Center for Regional Analysis 7
How did the recession change the Washington Area economy? New York Houston Dallas Los Angeles Phoenix SF-Oakland Seattle Atlanta Chicago WASHINGTON Boston Minneapolis Detroit Miami Philadelphia Metro Area Comparisons Job Change Dec 2 Dec 22 5 Largest Metro Areas (s) 77 76 76 72 6 57 52 44 39 25 9 3 8 - -5 5 5 2 6 92 GMU Center for Regional Analysis 8
6 4 2-2 -4-6 -8 Annual Job Change Washington MSA, 22-23 Annual Data Annual Month over Year (s) 29 2 2 22 8 22 25 28 Wash MSA Payroll Job Change: Private Sector The Great Recession and Recovery To December 22 Prof. & Bus. Svcs Educ & Health Svcs Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wlse Trade Transp. & Util. (s) Total -93 Total 32-25 -29-37 -45-3 -4-3 -4-9 -5 28 3 23 9 6 52-8 -6-4 -2 2 4 6 8 GMU Center for Regional Analysis 9
Prof. & Bus. Svcs Federal Govt. Educ & Health Svcs State & Local Govt Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wlse Trade Transp. & Util. Job Change by Sector Jen 22 23 Washington MSA -4-2 -2 - (s) Total = 4,9-2 - 2 3 5 9 3 Professional & Business Services Washington MSA (s) Annual Data Annual Month over Year 3 25 28 29 2 2 22 2 5 5-5 - -5-2 22 25 Tot 22 = 72,3 GMU Center for Regional Analysis
(s) Annual Data 6 5 4 3 2 - -2-3 -4 22 25 Annual Job Change District of Columbia, 22-23 28 Annual Month over Year 29 2 2 22 Prof. & Bus. Svcs Federal Govt. Educ & Health Svcs State & Local Govt Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wlse Trade Transp. & Util. Job Change by Sector 22 23 District of Columbia -3 - - - (s) Total 3,8 2 3 2-2 - 2 3 GMU Center for Regional Analysis
(s) Annual Data 6 5 4 3 2 - -2-3 -4 22 25 Annual Job Change Suburban Maryland, 22-23 28 Annual Month over Year 29 2 2 22 Prof. & Bus. Svcs Federal Govt. Educ & Health Svcs State & Local Govt Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wlse Trade Transp. & Util. Job Change by Sector 22 23 Suburban Maryland -2-2 (s) Total, - - 3-2 - 2 3 5 6 GMU Center for Regional Analysis 2
(s) Annual Data 6 5 4 3 2 - -2-3 -4 22 25 Annual Job Change Northern Virginia, 22-23 28 Annual Month over Year 29 2 2 22 Prof. & Bus. Svcs Federal Govt. Educ & Health Svcs State & Local Govt Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wlse Trade Transp. & Util. Job Change by Sector 22 23 Northern Virginia -3-2 - (s) Total 2,9 2 3 3 3-2 - 2 3 6 9 GMU Center for Regional Analysis 3
4 Unemployment Rates in the WMSA By Sub-State Area, 25-22 2 8 6 4 8.6 DC 7.8 U.S. 5.7 SMD 5.2 MSA 4. - NVA 2 Source: US Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US Seasonally Adjusted) The Washington Area s Post- Federally Dependent Economy GMU Center for Regional Analysis 4
Job Growth in the Washington Area By Sector, 22-27 (in thousands) Sector 22 27 Change Percent Prof. & Bus. Ser. 697.4 84.2 43.8 2.6 Federal Gov t 38.4 358.4-22. - 5.8 Education/Health 38.2 49. 38.8.2 S & L Gov t 39.7 32.6.9 3.8 Hospitality 276.8 285. 8.2 3. Retail Trade 254. 266.6 2.5 4.9 Other Services 82.8 85.3 2.5.4 Financial Services 5. 54.7 4.7 3. Construction 46.4 2.8 55.4 37.8 Information Ser. 8.6 87.6 7. 8.7 Other Sectors (3) 75. 93.2 8.2.4 Total Jobs 3,33.4 3,34.4 28. 9.3 GRP Per Job in the Washington Area By Sector (in 25 dollars) Sector 22 27 % Change Prof. & Bus. Services $34,75 $54,656 4.8% Federal Gov t 38,36 38,566. Education/Health 59,73 57,58-3.7 S & L Gov t 6,975 56,92-6.6 Hospitality 42,883 42,39 -. Retail Trade 6,87 64,36 5.5 Other Services 7,339 69,5 -.7 Financial Services 543,482 578,62 6.4 Construction 98,824 82,49-6.5 Information Services 349,868 468,376 33.9 Other Sectors 47,93 5,2 2.2 GRP per Job $3,653 $38,88 6.3 GMU Center for Regional Analysis 5
GRP, Job and Workforce Growth in the Washington Metropolitan Area, 22 27 (in billions of current $s, jobs in thousands) Indicator 22 27 Change GRP Growth $45.9 $57.8 26.8% Net Job Growth 3,95.3 4,27.5 Replacement Job Growth Resident Workforce 3,23. 3,427.9 356.2 9.% 459..7% 224.8 7.% Washington Metropolitan Area: Major Sources of Net New Jobs 22-27 Occupation Net New % of Total % Change Business and Financial 52,253 4.7 3.7 Computer, Math and Sci 33,63 9.4 4.2 Health Care (all occup.) 3,95 9. 3.7 Office Admin Support 3,334 8.5 6.3 Sales & Related Occup. 29,246 8.2 7. Personal Care Occup. 23,892 6.7 5.2 Management Occupations 22,964 6.4 7. Education & Training 2,642 6..6 Totals 224,234 63.. Source: EMSI Inc., GMU Center for Regional Analysis GMU Center for Regional Analysis 6
Washington Metropolitan Area: Major Sources of Replacement Jobs 22-27 Occupation Total Openings % of Total % Change Sales Occupations 63,3 3.8 5.2 Business and Financial 36,85 8. 9.6 Office Admin Support 54,986 2..4 Food Prep & Serving 54,587.9 23.6 Management Occupations 36,239 7.9. Computer, Math and Sci 2,429 4.7 9. Health Care (all occup.) 2,679 4.7 9.3 Education & Training 2,3 4.6.5 Personal Care Occup. 8,479 4..7 Totals 328,824 7.6 2.3 27 Structure of the Greater Washington Economy Non-Local Business 6.3 % Other Federal 8.9 % Fed Wages & Salaries 7.7 % Total Federal 28.8% Procurement 2.2% Local Serving Activities 38.% Health/Ed. 7. % Other.5% Assn.9 % Source: GMU Center for Regional Analysis GMU Center for Regional Analysis 7
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