ECONOMIC INDICATORS - Montgomery County, …...income tax receipts 2015: 485,100 2014: 478,200 STOCK...
Transcript of ECONOMIC INDICATORS - Montgomery County, …...income tax receipts 2015: 485,100 2014: 478,200 STOCK...
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Montgomery County, Maryland
ECONOMIC INDICATORS Montgomery County Council
Department of Finance
April 18, 2017
Regional and State
Economic Indicators
3
Real gross regional product increased 1.27 percent in CY2015 according
to the Bureau of Economic Analysis, the latest date available.The Center for Regional Analysis (CRA) estimates growth in real GRP in the Washington area to
increase 2.90 percent in CY2016, increase 3.10 percent in CY2017, and increase 2.70 percent in
CY2018.
1.59%
2.11%
0.02%
3.29%
1.56%
0.25%
-0.55%
0.96%1.27%
2.90%3.10%
2.70%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%20
07
2008
2009
2010
2011
2012
2013
2014
2015
2016
est
.
2017
est
.
2018
est
.
Pe
rce
nt
Ch
an
ge
Caledar Year
Percent Change in Real Gross Regional Product
(Washington MSA)
SOURCES: Bureau of Economic Analysis, U.S. Department of CommerceCenter for Regional Analysis (CRA), George Mason University (hatched columns)
4
Payroll employment in the Washington area was over 3.2 million in
CY2016.Employment increased by 55,600 (↑1.8%) from CY2015 to reach over 3.2 million an all time high in
CY2016.
3,011.7 3,025.12,974.7 2,986.1
3,029.53,069.4
3,097.5 3,116.1
3,173.8
3,229.4
2,800.0
2,850.0
2,900.0
2,950.0
3,000.0
3,050.0
3,100.0
3,150.0
3,200.0
3,250.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
No
nfa
rm P
ayro
ll E
mp
loym
en
t(t
ho
us
ands)
Calendar Year
Washington Metropolitan Area Nonfarm Payroll Employment (thousands)
SOURCE: Bureau of Labor Statistics, U.S. Department of Labor
Real gross state product increased 1.47 percent in CY2015 according to
the Bureau of Economic Analysis, the latest date available.Moody’s Analytics estimates growth in real GSP in Maryland to increase 1.49 percent in CY2016,
increase 2.37 percent in CY2017, and increase 2.98 percent in CY2018.
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1.35%
0.90%
-0.24%
2.64%
1.50%
0.38%
-0.11%
1.65%1.47% 1.49%
2.37%
2.98%
-0.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
est
.
2017
est
.
2018
est
.
Per
cent
Cha
nge
Calendar Year
Percent Change in Real Gross State Product
(Maryland)
SOURCES: Bureau of Economic Analysis, U.S. Department of Commerce
Moody's Analytics (hatched columns)
Payroll employment in Maryland stood at over 2.7 million in CY2016.Employment increased by 33,800 (↑1.3%) from CY2015 to reach over 2.7 million an all time high in
CY2016.
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2,615.3 2,607.2
2,531.7 2,527.32,554.0
2,584.92,609.9
2,632.42,674.0
2,707.8
2,400.0
2,450.0
2,500.0
2,550.0
2,600.0
2,650.0
2,700.0
2,750.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
No
nfa
rm P
ayro
llEm
plo
yme
nt
(th
ou
san
ds)
Calendar Year
Maryland Nonfarm Payroll Employment (thousands)
SOURCE: Bureau of Labor Statistics, U.S. Department of Labor
Real gross regional product for the Maryland suburban division of the
Washington MSA increased 2.00 percent in CY2015 according to the
Center for Regional Analysis (CRA).According to CRA, growth in real GRP in the division (Montgomery, Prince George’s, Charles, Calvert,
and Frederick counties) is expected to increase 2.80 percent in 2016, increase 3.00 percent in
CY2017 and increase 2.60 percent in CY2018.
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3.60%
1.40%
-1.20%
3.30%
1.10%
-0.60% -0.50%
0.70%
2.00%
2.80% 3.00%2.60%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
est
.
2017
est
.
2018
est
.
Perc
ent C
ha
ng
e
Calendar Year
Percent Change in Real Gross Regional Product (Suburban Maryland)
SOURCE: Center for Regional Analysis (CRA), George Mason University
8
Payroll employment in the Silver Spring-Rockville-Frederick metropolitan
division was 593,900 in CY2016.Employment increased 5,300 (↑0.9%) from CY2015 to CY2016 to reach all time high in CY2016.
578.2 576.1
562.8 562.0567.0
571.1576.0
581.9588.6
593.9
540.0
550.0
560.0
570.0
580.0
590.0
600.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Non
farm
Payro
llEm
ploy
men
t (t
hous
ands
)
Calendar Year
Silver Spring - Frederick - Rockville Payroll Employment (thousands)
SOURCE: Bureau of Labor Statistics, U.S. Department of Labor
9
The percent change in the consumer price index (CPI) increased from
0.33 percent in CY2015 to 1.18 percent in CY2016 – the third lowest
increase in ten yearsFor the eight years (CY2009 to CY2016), the average increase in the CPI was 1.51 percent but well
below the two-year average of 4.07 percent between CY2007 and CY2008.
3.62%
4.52%
0.23%
1.72%
3.34%
2.20%
1.52% 1.54%
0.33%1.18%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual Percent Change in the Consumer Price Index - All Items (Washington - Baltimore - CMSA)
SOURCE: Bureau of Labor Statistics, U.S. Department of Labor
10
As measured by the S&P/Case-Shiller Home Price Index®,
home prices in the Washington metropolitan area increased
1.9 percent in CY2016.However, the index remained 13.5 percent below its peak in CY2006.
231.75
195.25174.23 182.44 181.71 185.62
198.40207.63 209.93 213.83
0.00
50.00
100.00
150.00
200.00
250.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Ind
ex
Calendar Year
S&P/Case-Shiller® Home Price Index Washington MSA
NOTE: S&P/Case-Shiller price index is a registered trademark of Standard and Poor's
Montgomery County
Economic Indicators
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ECONOMIC INDICATOR
DASHBOARD
LATEST DATA
REVENUE
AFFECTED
EXPLANATION COMPARISON DIRECTION
INFLATION 1.18%
2016
Property Taxes Key determinant of property tax revenues at the Charter Limit
2015: 0.33%
2014: 1.54%
UNEMPLOYMENT
RATE
3.4%
2016
Income Taxes Indicates overall health of the job market
2015: 4.0%
2014: 4.4%
RESIDENT
EMPLOYMENT
533,101
2016
Income Taxes Primary determinant of income tax receipts
2015: 527,510
2014: 520,811
PAYROLL
EMPLOYMENT
(Estimated)
490,100
2016
Income Taxes Another determinant of income tax receipts
2015: 485,100
2014: 478,200
STOCK MARKET -
S&P 500
2,238.83
December 31st: 2016
Income Taxes Key determinant of capital gains portion of the income tax
December 31st:
2015: 2,043.94
2014: 2,058.90
HOME SALES 12,896
2016
Transfer/
Recordation Taxes
Indicates activity affecting receipts
2015: 12,191
2014: 10.976
HOME PRICES
(Median Price Sold)
$409,700
2016
Transfer/
Recordation Taxes
Taxes are based on values, affects amount of taxes collected
2015: $400,000
2014: $400.000
FEDERAL FUNDS RATE 0.66%
Feb. 2017
Investment
Income
County’s return on
investments closely correlated with the Fed Fund rates
Feb. 2016: 0.38%
Feb. 2015: 0.11%
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Resident employment in Montgomery County stood at 533,101 in CY2016.Resident employment (household survey) increased 1.1 percent (↑5,591) from 527,510 in CY2015 to
an all time high of 533,101 in CY2016.
496,401499,705
494,565
502,710508,549
512,679515,888
520,811
527,510533,101
470,000
480,000
490,000
500,000
510,000
520,000
530,000
540,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Re
sid
ent
Em
plo
ymen
t
Calendar Year
Resident Employment (Montgomery County)
SOURCE: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
14
The unemployment rate continued to decline in CY2016 from its peak of
5.6 percent in CY2010.The unemployment rate declined from 4.0 percent in CY2015 to 3.4 percent in CY2016 but remained
above the low unemployment rates experienced in CY2007 and CY2008.
2.6%3.2%
5.3% 5.6% 5.3% 5.2% 5.0%4.4%
4.0%3.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Une
mpl
oym
ent
Rate
Calendar Year
Unemployment Rate Montgomery County
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
1515
Home sales increased 5.8 percent in CY2016 to nearly 12,900 units. Sales in CY2016 exceeded the previous nine-year average of 10,440 units but remained below the
number of sales during the housing boom prior to CY2007.
10,355
8,519
10,376 10,4019,500
10,15511,461 10,976
12,19112,896
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sale
s
Year
Sales of Existing Homes (Montgomery County)
SOURCE: Metropolitan Regional Information System, Inc.
1616
Median home sales prices grew to nearly $410,000 in CY2016, the first
increase since CY2013.With the sales of existing homes in the County increasing 5.8 percent in CY2016, the median sales
price increased 2.4 percent.
$444,000
$395,000
$340,000 $350,000 $350,000$368,000
$400,000 $400,000 $400,000 $409,700
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Me
dia
n S
ale
s P
ric
e
Year
Median Sales Price for an Existing Home (Montgomery County)
SOURCE: Metropolitan Regional Information System, Inc.
17
Construction of new residential properties (units) was down almost 28.1
percent in CY2016 following strong construction between CY2013 and
CY2015.Construction of single-family homes was up 17.8 percent but the construction of new multi-family units
decreased 41.8 percent.
3,933
2,134
9662,036
2,823 2,608
5,246 4,997 4,910
3,532
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
0
1,000
2,000
3,000
4,000
5,000
6,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Va
lue
($th
ou
sa
nd
s)
Un
its
Calendar Year
Number of New Residential Starts (Units) and Value (Montgomery County)
Res_Units Res_Value
SOURCES: McGraw -Hill Construction and Montgomery County Department of Finance
18
Single-family construction (units) increased in CY2016 and was the third
highest level during the past ten years.Between CY2007 and CY2011, the construction of new single-family homes averaged 845 units per
year – a result of the bust in the housing boom during prior years. Between CY2012 and CY2016,
annual construction of single-family homes averaged 1,333 units per year attributed to dramatic growth
in CY2013.
1,054 967775
645782
1,088
1,6461,459
1,1341,336
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sta
rts
(Un
its)
Calendar Year
Number of Single-Family Residential Starts (Units) Montgomery County
SOURCE: McGraw -Hill Construction
19
Construction of multi-family units decreased 41.8 percent to nearly 2,200
units in FY2016.With the housing crash, construction declined significantly in CY2008 and CY2009. Since then,
construction experienced two distinct cycles, an average of 1,650 units between CY2010 and CY2012,
and an average of nearly 3,700 units between CY2013 and CY2015, before declining in CY2016.
2,879
1,167
191
1,391
2,0411,520
3,600 3,5383,776
2,196
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sta
rts
(Un
its)
Calendar Year
Number of New Multi-Family Residential Starts (Units) Montgomery County
SOURCE: McGraw -Hill Construction
202020
Income Tax VolatilityYear-over-year percent changes in the income tax are volatile and sensitive to economic events
especially capital gains in Montgomery County.
0.1%
2.0%
19.5%
9.7%
5.5%6.7%
10.6%
12.8% 12.7%
8.8%
10.9%
-8.3%
-3.3%
4.3%
24.0%
8.9%7.4%
8.8%
-11.9%
-4.9%
7.2%6.2%
10.0%
-3.8%
6.6%
2.9%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Pct.
Ch
g.
Tax Year
Annual Percent Change in lncome Tax Revenues from Withholdings, Estimated Payments, October 15 Filings, and Revenue Adjustments
Stock Market Collapse and "Great Recession"
Rate increase from 2.95% to 3.2%
Beginning of Three-year Stock Market Decline and Recession
First Gulf War and Recession
Fiscal Cliff
21
Real Property ReassessmentsAfter four consecutive years of declines from levy year 2009 to levy year 2012, the
reassessment rate for real property increased over the past five years. However the rate of 7.8
percent for levy year 2017 (FY2018 – Group 2) is largely attributed to the 17.8 percent increase
for “commercial” property, while residential property increased 4.8 percent.
6.4% 13.5%
21.8%
36.3%
51.8%
65.0% 63.3%
43.4%
16.2%
-10.6%
-17.0%-14.5%
-8.6%
4.1%
11.0% 18.7% 11.1%
7.8%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
Ave
rag
e R
ate
Rea
sses
smen
t R
ate
Levy Year
Real Property Reassessments by Levy Year
(Three-Year Phase-In)
Montgomery County
Triennial Reassessment Average
Historical Average: 17.4%
SOURCE: State Department of Assessments and Taxation
22
SUMMARY
• The County’s unemployment rate in February was 3.4 percent and down from the 3.6 percent in February last year.
• Both the sales of existing homes (↑5.8%) and median prices (↑2.4%) increased in CY2016. The growth in housing market suggests that it continues to rebound from the effects of the housing bust. The housing market is expected to continue its growth albeit at a lower rate and both average sales price and median price are expected to increase during FY2017 and FY2018.
• Inflation for the Washington-Baltimore region was 1.18 percent in CY2016 – 0.85 point above the increase in CY2015. The low rates of inflation continue to effect increases in real property tax revenues due to the charter limit.