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  • Stuck in Neutral, Demographics, and

    A Sustainable Future?

    New Hampshire Joint Engineering Societies

    October 6, 2011

    Dennis Delay Economist NHCPPS

    “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

  • 2

    “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

    Board of Directors Todd I. Selig, Chair David Alukonis Michael Buckley William H. Dunlap Sheila T. Francoeur Stephen Reno Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Kimon S. Zachos Martin L. Gross, Chair Emeritus John D. Crosier, Sr., Emeritus

    New Hampshire Center for Public Policy Studies

    Want to learn more? • Online: nhpolicy.org • Facebook: facebook.com/nhpolicy • Twitter: @nhpublicpolicy • Our blog: policyblognh.org • (603) 226-2500

  • Financial Markets Becalmed for Now

    "TED" Rate Difference Between 3 month LIBOR and 3 month US T-Bill

    0

    1

    2

    3

    4

    5

    6

    Ja n-

    94

    Ja n-

    95

    Ja n-

    96

    Ja n-

    97

    Ja n-

    98

    Ja n-

    99

    Ja n-

    00

    Ja n-

    01

    Ja n-

    02

    Ja n-

    03

    Ja n-

    04

    Ja n-

    05

    Ja n-

    06

    Ja n-

    07

    Ja n-

    08

    Ja n-

    09

    Ja n-

    10

    Ja n-

    11

    LTCM Y2K Tech Bust

    SubPrime Shock

    Lehman Failure

    10/10/08

  • Calculated Risk has the clearest picture of the problem we face:

    Source: Chart from Fed Bank of Boston

  • NH – Less of a decline, more recovery.

    Index of Total NonFarm Employment

    93.0

    94.0

    95.0

    96.0

    97.0

    98.0

    99.0

    100.0

    101.0

    102.0

    Ja n-0

    7

    Ap r-0

    7 Ju

    l-0 7

    Oc t-0

    7

    Ja n-0

    8

    Ap r-0

    8 Ju

    l-0 8

    Oc t-0

    8

    Ja n-0

    9

    Ap r-0

    9 Ju

    l-0 9

    Oc t-0

    9

    Ja n-1

    0

    Ap r-1

    0 Ju

    l-1 0

    Oc t-1

    0

    Ja n-1

    1

    Ap r-1

    1 Ju

    l-1 1

    D ec

    2 00

    7 =1

    00

    US NH Manchester

    New Hampshire

    Manchester

    United States

  • NH’s Great Recession was in the early 1990’s

    Monthly NH NonFarm Employment, January 1969 - July 2011

    0

    100

    200

    300

    400

    500

    600

    700

    0 1 /6

    9

    0 1 /7

    0

    0 1 /7

    1

    0 1 /7

    2

    0 1 /7

    3

    0 1 /7

    4

    0 1 /7

    5

    0 1 /7

    6

    0 1 /7

    7

    0 1 /7

    8

    0 1 /7

    9

    0 1 /8

    0

    0 1 /8

    1

    0 1 /8

    2

    0 1 /8

    3

    0 1 /8

    4

    0 1 /8

    5

    0 1 /8

    6

    0 1 /8

    7

    0 1 /8

    8

    0 1 /8

    9

    0 1 /9

    0

    0 1 /9

    1

    0 1 /9

    2

    0 1 /9

    3

    0 1 /9

    4

    0 1 /9

    5

    0 1 /9

    6

    0 1 /9

    7

    0 1 /9

    8

    0 1 /9

    9

    0 1 /0

    0

    0 1 /0

    1

    0 1 /0

    2

    0 1 /0

    3

    0 1 /0

    4

    0 1 /0

    5

    0 1 /0

    6

    0 1 /0

    7

    0 1 /0

    8

    0 1 /0

    9

    0 1 /1

    0

    0 1 /1

    1

    T h

    o u

    sa n

    d s

    o f

    Jo b

    s

    Grey boxes represent recessionary periods

    10% Job Loss

    5% Job Loss

    3% Job Loss

  • Smart Manufacturing and High Tech Still Leads the Economy!

    Sources: Bureau of Economic Analysis

    New Hampshire Total Compensation Paid by Selected Industries (Thousands of Dollars)

    $-

    $1,000,000

    $2,000,000

    $3,000,000

    $4,000,000

    $5,000,000

    $6,000,000

    $7,000,000

    19 90

    19 92

    19 94

    19 96

    19 98

    20 00

    20 02

    20 04

    20 06

    20 08

    20 10

    Manufacturing + High Tech

    Healthcare

    Retail Trade

    Finance

    Construction

    Education

    Real Estate

  • Anecdotal evidence from the Fed Bank of Boston, September 7, 2011

     Business contacts in New England continue to report mixed results.

     Some manufacturers cite slowing demand while others continue to enjoy strong sales, retail activity is mostly flat, tourism is up, staffing and software and IT services firms note continued growth, and real estate markets remain sluggish.

     Respondents say input cost pressures have eased somewhat since the last report.

     Firms are doing little hiring.  Contacts in all sectors note that the outlook is increasingly

    uncertain.

  • Residential Real Estate Continues to Languish

    NH Single-Family Residential Home Sales and Price (MLS) Source: NH Association of REALTORS

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $0

    $50,000

    $100,000

    $150,000

    $200,000

    $250,000

    $300,000

    Units sold Median Price

    Median Home Price

    Number of Units Sold

    Decline from the Peak: Sales -40% from 2004 Price -21% from 2005

    2011 YTD thru July

  • Home Prices Return to the Long Term Trend:

    NH Single-Family Residential Home Price (MLS)

    Source: NH Association of REALTORS

    $134,749

    $141,372

    $152,500

    $170,158

    $188,089

    $206,266

    $227,807

    $237,976

    $226,354

    $216,598

    $187,954

    $170,164

    $169,787

    $157,174

    $0

    $50,000

    $100,000

    $150,000

    $200,000

    $250,000

    $300,000

    1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

    Median Price 2000 Inflation Adjusted

    Median Home Price

    Inflation Adjusted Price

  • New Hampshire Home Building Not as Frantic as in the 1980’s

    Monthly Housing Permits in New Hampshire January 1969 to July 2011

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    01 /0

    1/ 69

    01 /0

    1/ 70

    01 /0

    1/ 71

    01 /0

    1/ 72

    01 /0

    1/ 73

    01 /0

    1/ 74

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    1/ 75

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    01 /0

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    1/ 82

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    1/ 84

    01 /0

    1/ 85

    01 /0

    1/ 86

    01 /0

    1/ 87

    01 /0

    1/ 88

    01 /0

    1/ 89

    01 /0

    1/ 90

    01 /0

    1/ 91

    01 /0

    1/ 92

    01 /0

    1/ 93

    01 /0

    1/ 94

    01 /0

    1/ 95

    01 /0

    1/ 96

    01 /0

    1/ 97

    01 /0

    1/ 98

    01 /0

    1/ 99

    1/ 1/

    20 00

    1/ 1/

    20 01

    1/ 1/

    20 02

    1/ 1/

    20 03

    1/ 1/

    20 04

    1/ 1/

    20 05

    1/ 1/

    20 06

    1/ 1/

    20 07

    1/ 1/

    20 08

    1/ 1/

    20 09

    1/ 1/

    20 10

    1/ 1/

    20 11

    Tw el

    ve M

    on th

    A ve

    ra ge

    A t A

    nn ua

    l R at

    es

    Grey boxes represent recessionary periods

  • NH Foreclosures Have Peaked?

    NH Monthly Foreclosure Deeds

    0

    100

    200

    300

    400

    500

    600 Ja

    n- 05

    M ay

    -0 5

    S ep

    -0 5

    Ja n-

    06

    M ay

    -0 6

    S ep

    -0 6

    Ja n-

    07

    M ay

    -0 7

    S ep

    -0 7

    Ja n-

    08

    M ay

    -0 8

    S ep

    -0 8

    Ja n-

    09

    M ay

    -0 9

    S ep

    -0 9

    Ja n-

    10

    M ay

    -1 0

    S ep

    -1 0

    Ja n-

    11

    M ay

    -1 1

    S ep

    -1 1

    Source: NH Housing Finance Authority

    Actual Trend

  • The Local Revenue Impact: Wherefore Workforce Housing?

    Sources: NH Department of Revenue

    NH Equalized Property Value and Tax Rate

    0

    20

    40

    60

    80

    100

    120

    140

    160

    180

    200

    19 78

    19 79

    19 80

    19 81

    19 82

    19 83

    19 84

    19 85

    19 86

    19 87

    19 88

    19 89

    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