Garrett County Total NonAgricultural Employment First Quarter 1996 through First Quarter 2003

1
The Beginning of the End? Not Necessarily in
Maryland
On Behalf of MDGFOA
By Anirban Basu Sage Policy Group,
Inc. November 4, 2005
2
Components of GDP, 2005Q3
Source Bureau of Economic Analysis
3
University of Michigan Consumer Sentiment
SurveySeptember 2001 through October 2005
Between Aug. 2005 and Sept. 2005, the consumer
sentiment index dropped 12.2 points, the largest
one-month decline since December 1980.
Source Economy.com, The Conference Board
4
Retail Food Services SalesJanuary 2001 through
September 2005
Gas Stations 34.8 in September Y/Y Building
Material Dealers 8.6 in September Y/Y
Source Dismal.com
5
U.S. Chain Store Sales Growth by Type of Store
September 2005 vs. September 2004
Source Economy.com
6
U.S. New Home SalesJanuary 1999 through
September 2005
Source Economy.com, Census Bureau
7
Current Hot Metro Housing MarketsAnnual Existing
Single-Family Home Price Appreciation 2005Q2 vs.
2004Q2
Baltimore 17.5 New York
18.3 Philadelphia 12.2 Boston
6.6 Washington, D.C. 26.2
Source National Association of Realtors
8
Housing Opportunity IndexWashington, D.C. Metro
vs. United States1993Q1 through 2005Q2
Source National Association of Home Builders
Housing Opportunity Index the share of homes
affordable for median incomelower index
indicates less affordability
9
Average Home Prices in the Baltimore MSA by
Jurisdiction, September 2005
Source Maryland Association of Realtors
10
2004 Residential Building Permits per 100
Households (2004 estimates) by select Regions
Source U.S. Census Bureau
BWI Corridor includes Anne Arundel, Howard,
Montgomery and Prince Georges counties
11
2004 Residential Building Permits per 100
Projected New Households (2004-2009) by select
Regions
Source U.S. Census Bureau
BWI Corridor includes Anne Arundel, Howard,
Montgomery and Prince Georges counties
12
Housing Price Appreciation of Single-Family
HomesMaryland vs. Virginia vs. United States
1999Q1- 2005Q2
1. Nevada 5. Florida 2. Arizona 6. D.C. 3.
Hawaii 7. Maryland 4. California 8. Virginia
Source Office of Federal Housing Enterprise
Oversight
13
Nationally, an inflection point
14
NYMEX Crude Oil Future Prices in U.S.
DollarsJanuary 2002 through October 28, 2005
As of 9am, November 4th 61.78
Source Energy Information Administration
15
NYMEX Heating Oil Future Prices in U.S. Dollars
January 2003 through October 28, 2005
Roughly 7.5 of U.S. households use heating oil
as their main heat source.
Source Energy Information Administration
16
U.S. Personal Savings Rate vs. NYMEX Crude Oil
Prices, January 2002 through September 2005
Source Bureau of Economic Analysis Energy
Information Administration
17
Effects of Katrina

• Roughly 60 of U.S. grain exports leave through
  New Orleans and neighboring ports
• The Gulf region contains 5 of the top 12 U.S.
  ports, including South Louisiana, the nations
  top port by cargo volume
• Cargo shipped through ports in the region
  affected by Katrina is valued at about 150
  billion a year
• There is no adequate substitute for the
  Mississippi River as a shipping route, forcing
  many to consider rail or road routes.

Source BBC News US Counting the Cost of
Katrina, September 1, 2005 Forbes
18
CPISeptember 2005
CPI 4.7 Core CPI 2.0
35.1
Source Bureau of Labor Statistics
Core CPI All items less food and energy
19
Consumer Price Index vs. Producer Price Index
January 1999 through September 2005
Source Economy.com, Census Bureau
20
The consumer price index, or CPI, data released
Friday provided some evidence that the very
substantial increases in the prices of many
petroleum-based products have not found their way
into core consumer prices -- at least not yet.
Donald Kohn, Federal Reserve Board Governor,
10.19.05
FedSpeak
Monetary accommodation can be withdrawn at a
faster pace if inflation pressures seem to be
building to a greater extent than expected .
Roger Ferguson, Vice Chairman of the Federal
Reserve, 10.18.05.
21
10-Year Treasury YieldJanuary 2000 through
November 4, 2005
Fed tightening begins
Source Federal Reserve Board
22
SP 500 Index Year-to-Date ChangeOctober 25, 2005
Source Standard Poors
23
Now some good news
24
Gross Domestic Product1990Q1 through 2005Q3
2005Q3 3.8
Source Bureau of Economic Analysis
25
Net Change in U.S. JobsJanuary 2000 through
October 2005
10/05 56,000
Between March 2001 and July 2002, the nation lost
nearly 2.4 million jobs.
Over the last 12 months (Sept. to Sept.) the U.S.
added 1.899 million jobs
Between January 2000 and February 2001, 2,051,000
jobs were created.
Source Economy.com, Bureau of Labor Statistics
26
National Nonfarm Employmentby Industry Sector
GroupsOctober 2005 v. October 2004Absolute
Change
1,899k All Told
Bush Scorecard Private Sector
572,000 Public Sector 1,035,000 Total
1,607,000
Source Economy.com, Bureau of Labor Statistics
27
Total Homeland Security SpendingFiscal Years
1962 2009
2004 through 2009 are estimates
Source Office of Management Budget, The
Executive Office of the President
28
Total Department of Defense Spending Fiscal
Years 1962 2009
2004 through 2009 are estimates
Source Office of Management Budget, The
Executive Office of the President
29
BRAC Re-Alignment Winners
Source Economy.com
Direct Impact the actual number of defense
positions affected, including civilian and
contract workers. Indirect Impact the Defense
Departments estimate of additional jobs
affected as a result of changes.
30
Maryland Nonfarm Employmentby Industry Sector
GroupsSeptember 2005 v. September 2004Absolute
Change
MD Total 54.2K 2.1 US Total 2,125K 1.6
Source Bureau of Labor Statistics
31
Baltimore MSA Nonfarm Employmentby Industry
Sector Groups (NSA) September 2005 v. September
2004Absolute Change
Baltimore MSA Total 16.3K 1.3 MD
Total 54.2K 2.1 US Total 2,125K 1.6
Source Bureau of Labor Statistics
32
Average Weekly Wage in the Baltimore MSA by
Industry, 2005Q2
Source Maryland Department of Labor, Licensing
and Regulation
33
20 Fastest Growing Large Metropolitan Areas,
Employment, September 2004 vs. September 2005
Source Bureau of Labor Statistics
34
Washington, D.C. MSA Nonfarm Employmentby
Industry Sector Groups (NSA)September 2005 v.
September 2004Absolute Change
DC MSA Total 79.4K 2.8 US Total 2,125K
1.6
Source Bureau of Labor Statistics
35
Suburban Maryland Nonfarm Employmentby Industry
Sector Groups (NSA) September 2005 v. September
2004Absolute Change
Sub. MD Total 26.3K 2.8 MD Total
54.2K 2.1 US Total 2,125K 1.6
Source Bureau of Labor Statistics
36
Employment Growth by Maryland Metro- and
Micropolitan Areas, September 2005 vs. September
2004
Source Bureau of Labor Statistics
37
Unemployment Rates, Maryland CountiesSeptember
2005
Source Maryland Department of Labor, Licensing
and Regulation Bureau of Labor Statistics
38
Unemployment Rates, U.S. StatesSeptember 2005

Source Bureau of Labor Statistics
U.S. unemployment rate 5.1
39
Growth in Average Asking Rent for Office
Space2005Q3 vs. 2004Q3
Source CB Richard Ellis Advantis
40
Conclusions

• National economy has slowed look for GDP growth
  in the 3.1 range for the second half of 05
  2.7 for 06
• Marylands economy will continue to outperform
• Local economic development offices should be
  quite busy
• Risks remain (oil/energy, the dollar, interest
  rates and flu).

41
H5N1

• The H5N1 strain remained largely in South-East
  Asia until this summer, when Russia and
  Kazakhstan both reported outbreaks.
• UK authorities announced on 23 October that H5N1
  had been detected in a parrot that died in
  quarantine.

Source MSNBC BBC News
42
Thank You

• You can always reach me at abasu_at_sagepolicy.com
• Youll be hearing a lot from us the balance of
  the year.
• Also, if you need us in a hurry, we are at
  410.522.7243 (410.522.SAGE)
• Please contact us when you require economic
  research policy analysis.