Regional Economics Workshop The Washington DC Regional Economy Current Conditions and Outlook Lisa A. Sturtevant, Ph.D. Assistant Research Professor, School of Public Policy Deputy Director, Center for Regional Analysis George Mason University August 1, 212 The Washington Area s Current Economic Performance GMU Center for Regional Analysis 1
Annual % Change US GDP and Washington GRP 1 9 8 7 6 5 4 3 2 1-1 -2-3 -4 Washington GRP US GDP 197 1975 198 1985 199 1995 2 25 21 Source: Bureau of Economic Analysis, GMU Center for Regional Analysis $Billions 14 1,281 12 15 Largest Metro Areas 21 GRP 1 8 736 6 4 2 532 425 385 374 347 326 314 272 258 231 2 198 191 Source: Bureau of Economic Analysis, GMU Center for Regional Analysis GMU Center for Regional Analysis 2
% 12 1 8 6 4 2-2 -4-6 15 Largest Metro Areas GRP Percent Change 27-1 Source: Bureau of Economic Analysis, GMU Center for Regional Analysis (s) 15 Annual Job Change MOTYC Washington MSA 1 5-5 -1 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis GMU Center for Regional Analysis 3
(s) 12 15 Largest Job Markets Job Change: Jun 211 Jun 212 1 8 6 4 2-2 Washington + 36,1 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 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 Jun 211 Jun 212 Washington MSA -4-3 -2-1 (s) Total = 36,1 3-2 -1 1 2 3 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 5 6 6 7 7 13 GMU Center for Regional Analysis 4
Professional & Business Services Washington MSA (s) Annual Data Annual Month over Year 3 25 28 29 21 211 212 2 15 1 5-5 -1-15 -2 22 25 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Tot 211 = 688,7 (s) Annual Data 3 25 2 15 1 5-5 -1-15 -2 22 25 Federal Government Washington MSA Annual Month over Year 28 29 21 211 212 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Tot 211 = 383,6 GMU Center for Regional Analysis 5
% 14 Unemployment Rate 12 1 8 6 4 9. DC 8.2 U.S. 5.8 SMD 5.3 MSA 4.2 - NVA 2 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis The Changing Role of the Federal Government in the Washington Area GMU Center for Regional Analysis 6
$ Billions 18 16 14 12 1 8 6 4 2 Federal Spending Washington MSA Total & Procurement Total Procurement 1985 1986 1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 Source: Census Consolidated Federal Funds Report $ Billions 9 8 7 6 5 4 3 2 1 Federal Procurement Washington MSA Total = $862 Billion < 8-9 = $92 B > > < 91- = $28 B > < 1 1 = $562 B > Source: Census Consolidated Federal Funds Report GMU Center for Regional Analysis 7
(s) Eisenhower Kennedy Johnson 4 35 3 25-22 Federal Employment Washington MSA + 8 Nixon - Ford Carter Reagan Bush 1 Clinton Bush 2 + 36 + 18-6 + 4-42 + 22 Obama +3 2 15 195 1955 196 1965 197 1975 198 1985 199 1995 2 25 21 Source: BLS, GMU Center for Regional Analysis 21 Structure of the Greater Washington Economy Non-Local Business 12. % Other Federal 1.7 % Local Serving Activities 34.8% Total Federal 39.8% Fed Wages & Salaries 1.% Procurement 19.1% Source: GMU Center for Regional Analysis Other 1.5% Health/Ed. 4.5% Assn 1.8% Int l 3.5% GMU Center for Regional Analysis 8
Near-Term Economic Outlook for the Washington Metropolitan Area Growth Projections for Federal Spending and GRP: 211-215 (in billions of 21 dollars, annual % change) Year Federal $s WMSA GRP 21 $169. $425. 211 2.% 2.6% 212 1.% 2.7% 213.% 2.9% 214 1.% 3.3% 215 1.5% 3.2% 215 $178.5 $491.2 Change 1-15 5.6% 15.6% Source: GMU Center for Regional Analysis, assumes Federal cuts associated with sequestration do not go into effect GMU Center for Regional Analysis 9
% 8 6 4 2-2 -4 GDP/GRP 2-216 Washington U.S. 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 Source: Global Insight, GMU Center for Regional Analysis Employment Change by Sub-state Region (s) 28 29 21 211 212 213 214 215 D.C. 1.1-2.2 9.5 11.2 11.8 12.5 14. 13. Sub. MD -3.3-25.1-5.9 4. 6.2 8.5 9. 9.5 No. VA 6.1-23. 8.7 17.4 18. 21. 22. 2.5 REGION 12.9-5.3 11.3 32.6 36. 42. 45. 43. Average Annual Change 199-21 = 36, Source: BLS, GMU Center for Regional Analysis, 29-215 based on 212 Benchmark data from BLS, Revised 5/1/212 NOTE: 211 Total is the sum of subregions and does not agree with the Mar 13, 212 published MSA total. Assumes Federal cuts associated with sequestration do not go into effect GMU Center for Regional Analysis 1
Total Federal and DoD Spending in DC, Maryland and Virginia, 21 (in billions of dollars) Area Total $s DoD $s % Total $s %US DoD United States $3,276.4 $557. 17. 1. District of Columbia 61.9 8.7 14. 1.6 Maryland 96.3 18.7 19.4 3.4 Virginia 136.1 58.1 42.7 1.4 Total Area $294.3 $85.5 29. 15.4 Source: Consolidated Federal Funds Report, 21 The Employment Impact the of Budget Control Act of 211 on the Maryland-DC-Virginia Region State Job Losses* Job Losses* Total Job* DoD Cuts Non-DoD Cuts Losses Maryland 39,395 75,4 114,795 District of Columbia 15,169 112,238 127,47 Virginia 136,191 71,38 27,571 Totals 19,755 259,18 449,773 % U.S. job losses 17.5 24.7 21. *direct, indirect and induced job losses resulting from BCA-mandated federal spending reductions in FY 213; of the direct job losses totaling 161,161, an estimated 65,189 workers would be federal employees (4.4%) and 95,972 (59.5%) workers would be contractors, suppliers and vendors. Source: The Economic Impact of the Budget Control Act of 211 on DOD and Non-DOD Agencies, Stephen S. Fuller, y 17, 212. GMU Center for Regional Analysis 11
The Economic Impact of the BCA of 211 Total and Direct Gross State Product FY 213 (in billions of 213 dollars) State Direct GSP Loss Total GSP Loss District of Columbia $7.443 $12.814 Maryland 6.811 11.546 Virginia 12.579 2.876 Source: GMU Center for Regional Analysis George Mason University Center for Regional Analysis cra.gmu.edu GMU Center for Regional Analysis 12