23 rd Annual Southern California Visitor Industry Outlook Conference Economic Outlook Kimberly...

23rd Annual Southern California Visitor Industry Outlook Conference

Economic Outlook

Kimberly Ritter-MartinezAssociate EconomistThe Kyser Center for Economic ResearchLAEDC

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4q09

1q10

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3q10

4q10

1q11

11:2

11:3

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

Sources: Bureau of Economic Analysis

U.S. Economic GrowthQ/Q %Change (Annual Rate)

0

1

2

3

4

5

6

7

8

9

10

11

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

U.S. Job Counts -->

U.S. 9.0%

Jobless Rates -- Still Too HighPercent Unemployed (SA) Annual %Change

Sources: BLS, CA EDD

California 11.9%Los Angeles 12.4%Orange 8.6%San Diego 9.7%

U.S. Retail Sales

Jan-06May-06

Sep-06Jan-07

May-07Sep-07

Jan-08May-08

Sep-08Jan-09

May-09Sep-09

Jan-10May-10

Sep-10Jan-11

May-11Sep-11

300

320

340

360

380

400

420 Billions of $ (SA)

Sept 2011Total: +7.9%Core Non-store: +10.1%Core In-store: +5.4%

Source: U.S. Census Bureau

U.S. Housing Starts

2003 2004 2005 2006 2007 2008 2009 2010 2011f 2012f0

500

1000

1500

2000

2500Multi-Family Units Single-Family Units

588

Thousands of Homes

18481949

2078

1812

1355

906

554

574

740


Source: U.S. Department of Commerce, Bureau of Economic Analysis (BEA)

Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-110.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

$6,000

$7,000

$8,000

$9,000

$10,000

$11,000

$12,000

$13,000

$14,000Saving Rate Personal Income ($Thousands)

Personal Income & the Saving Rate

Nondefense Capital Goods Shipments

Jan-06Jul-06

Jan-07Jul-07

Jan-08Jul-08

Jan-09Jul-09

Jan-10Jul-10

Jan-11Jul-11

40

45

50

55

60

65

70

75Excluding Aircraft All Capital GoodsBillions of $


2008

2009

2010

2011q2

-125% -75% -25% 25% 75% 125% 175% 225% 275% 325% 375%

-9.7%

-15.0%

48.2%

14.2%

-73.2%

314.2%

29.8%

-7.4% Financial Industries

Nonfinancial Industries

Annual % Change

Pre-Tax Corporate Profits With Inventory & Capital Consumption Adjustments

Source: Bureau of Economic Analysis (BEA), U.S. Department of Commerce

California Gas & Diesel PricesJul-9

5Jul-9

6Jul-9

7Jul-9

8Jul-9

9Jul-0

0Jul-0

1Jul-0

2Jul-0

3Jul-0

4Jul-0

5Jul-0

6Jul-0

7Jul-0

8Jul-0

9Jul-1

0Jul-1

1

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50

Diesel Gasoline (Regular Grade)

Monthly average price ($/gallon), including all taxes

Source: Energy Information Agency

Domestic Feeder MarketsCity/Region

Unemployment Rate (NSA)

9/2011

Change in Employment

Sept Y-YLocal Area GDP

2009/2011

San Francisco Bay Area 9.2% +0.8% +0.8%

San Diego 9.7% +1.6% +1.2%

New York City Area 8.3% +0.4% +4.7%

Sacramento 11.5% -0.1% -1.1%

Phoenix 8.1% +0.4% +0.7%

Las Vegas 13.6% +0.5% -1.9%

Chicago 9.6% -0.1% +1.9%

Seattle 8.5% +1.3% +1.9%

Fresno 14.9% -1.4% -0.9%

Portland 8.4% +2.0% +4.7%

Source: LA Inc, BLS, BEA, CA EDD

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f 2012f-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Mexico GDP Growth% Change in Real GDP, Year-Over-Year

Source: IMF, World Economic Outlook, LA Inc., Visit California

Mexican Visitors to CA 2010376,000 (air arrivals)Up 9.0% over 2009

22.4% share of total to US

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f 2012f-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Canada GDP Growth% Change in Real GDP, Year-Over-Year


Canadian Visitors to CA 20101,355,900 – Up 13.0% over


U.K. GDP Growth

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f 2012f-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%


% Change in Real GDP, Year-Over-Year

U.K. Visitors to CA 2010683,000 - up 3.0% over 2009


Japan GDP Growth

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f 2012f-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%



Japanese Visitors to CA 2010545,000 – Up 19.0% over 2009


China GDP Growth

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f 2012f0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%



Chinese Visitors to CA 2010399,000 (excl. Hong Kong)

Up 49.0% over 200948.8% share of total to US

Australia GDP Growth

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f 2012f0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%



Australian Visitors to CA 2010502,000 - Up 33.0% over 2009


2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1q11 2q11 3q1160

70

80

90

100

110

120

60

70

80

90

100

110

120Canada (C$/US$) China (yuan/US$)Japan (Y/US$) U.K. (£/US$)Euro Zone (€/US$)

VALUE OF U.S. DOLLAR SINCE 2000

Index (2000 = 100)Source: Federal Reserve Board G5

In Summary:

Slow rate of job creation Financial market fragility Housing & real estate are troubled. State/local government budgets are problematic.

BUT. . .

The economic recovery is real - it is not as strong as we initially thought, but it is still largely intact.

Tourism, technology, trade, & entertainmentare leading the way in California.

Labor markets will improve.

Wrap Up

Travel & Tourism has Outperformed U.S. Economy during recovery

Weaker Growth at Home & Abroad will Slow Tourism Expansion in 2012

U.S Consumers Face Constraints

International Market Remains a Bright Spot

THANK YOU

For Further Insight into the Local

Economyfind our Mid-Year

Economic Forecast & Industry Outlook

online at www.LAEDC.org/reports

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23 rd Annual Southern California Visitor Industry Outlook Conference Economic Outlook Kimberly...

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