1. REAL DEAL 2014 The Post-Federally Dependent Washington Area Economy Stephen S. Fuller, Ph.D. Dwight Schar Faculty Chair and University Professor Director, Center for Regional Analysis George Mason UniversityJanuary 28, 2014

2. The U.S. Economys Current Performance and Outlook 3. U.S. Gross Domestic Product Quarterly Change: 2007 2015 % 6Forecast > > > >4 2 0 -2 -4 -6 -8-10 200720082009201020112012Source: Bureau of Economic Analysis, Global Insight January 6, 2014201320142015 4. U.S. Payroll Job Change by Sector Dec 2012 Dec 2013 Ranked by Size in 2013 Educ & Health Svcs State & Local Govt Prof. & Bus. Svcs Retail Trade Leisure & Hosp. Manufacturing Financial Construction Wlse Trade Other Services Transp. & Util. Federal Govt. Information-600Total = 2,186(000s)327 54 637 381 39077 84 153 95 30 42 -79 -4-400-2000200Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis400600 5. U.S. Payroll Job Change by Sector Nov 2013 Dec 2013 Ranked by Size in 2013 Educ & Health Svcs State & Local Govt Prof. & Bus. Svcs Retail Trade Leisure & Hosp. Manufacturing Financial Construction Wlse Trade Other Services Transp. & Util. Federal Govt. Information-100Total = 74(000s) 0 -11 1955 9 9 4 -12 15 1 -2 -2 -12-50050Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis100 6. U.S. Unemployment Rate % 11 10 9 8 7 6 5 4Dec = 6.7 GI FCST 13 7.4 14 6.5 15 5.9 16 5.4 17 5.1 18 5.0Source: Bureau of Labor Statistics (Seasonally Adjusted), IHS Global Insight January 6, 2014 7. Interest Rates 2001 - 2018 Forecast > > > >8 7630-Yr510-Yr TreasFed4 3 2 1 20012003200520072009Source: IHS Global Insight January 6, 20142011201320152017 8. U.S. Economic Performance % 20Forecast > > > >15 105 GDP Residential Fixed Non-Res: Structures State & Local Federal Bus. Inv.-Eq & Sfwr0 -5 -10 -15 -20-25 -30Source: Bureau of Economic Analysis, Global Insight January 6, 2014 9. The Washington Economy: Impacts of the Recession and Sequester 10. The Washington Area Economy Experienced Structural Change During the RecessionChanging Federal Spending Policies Have Resulted in Additional Major Changes in the Washington Area Economy 11. Recession Impacts GRP declined 0.8% in 2008 The regions lost 178,100 jobsSequester+ Impacts Federal procurement $s down by 11.8% There are 21,200 fewer federal jobs Federal payroll is down 4.8% or by $2 billion 12. Federal Government Washington MSA (000s) Annual Data30 25 20 15 10 5 0 -5 -10 -15 -202008Annual Month over Year20092010201120122013Oct Jul Apr Jan Oct Jul Apr Jan Oct Jul Apr Jan Oct Jul Apr Jan Oct Jul Apr Jan Oct Jul Apr Jan 2005 2002 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional AnalysisTot 2012 = 377,400 13. WMSA Payroll Job Change: Private Sector The Great Recession and Recovery Aug 2008-Feb 2010 (000s)Total -178 Prof. & Bus. SvcsFeb 2010-Nov 2013 Total 212 43-23Educ & Health Svcs40Retail Trade-23Leisure & Hosp.34-34Construction56-4814Other Services-8Financial8-10Information11-12Manufacturing0-10Wlse Trade0-7Transp. & Util.0-4-60-40-20Feb 10 to Nov 12 Nov 12 to Nov 13 60 020Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis4060 14. WMSA Payroll Job Change from Aug-2008 Professional & Business Services As measured in November of each year(000s) 25Prof & Bus Svcs20 15Prof, Sci & Tech Svcs105 Management0 -5Admin & Waste Mgt Nov-13Nov-12Nov-11Nov-10Nov-09-15Aug-08 Nov-08-10Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 15. WMSA Payroll Job Change from Aug-2008 Education & Health Services As measured in November of each year(000s) 7060Health & Educ Svcs50Educ. Svcs40 Health Svcs30 20Ambulatory Health Svcs10Hospitals Nov-13Nov-12Nov-11Nov-10Nov-09-10Aug-08 Nov-080Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 16. WMSA Payroll Job Change from Aug-2008 Leisure & Hospitality As measured in November of each year(000s) 40Leisure & Hospitality30 20Food & Drinking Places10 0Accommodation-10 Arts & Rec Nov-13Nov-12Nov-11Nov-10Nov-09-30Aug-08 Nov-08-20Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 17. WMSA Payroll Job Change from Aug-2008 Financial Activities As measured in November of each year(000s) 8Financial Activities6 4 2Finance & Insurance0 -2Real Estate & Leasing-4 -6Credit & Related Nov-13Nov-12Nov-11Nov-10Nov-09-10Aug-08 Nov-08-8Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 18. WMSA Payroll Job Change from Aug-2008 Construction, Mfg, Info & Other Services As measured in November of each year(000s) 0Other Services-5 -10Manufacturing-15-20Information Svcs-25 -30ConstructionNov-13Nov-12Nov-11Nov-10Nov-09-40Aug-08 Nov-08-35Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 19. WMSA Payroll Job Change from Aug-2008 Trade, Transportation & Utilities As measured in November of each year(000s) 15Retail10 5Department Stores0Transportation & Utilities-5Nov-13Nov-12Nov-11Nov-10Nov-09Aug-08 Nov-08-10Wholesale TradeSource: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 20. Washington Metropolitan Area Job Change by Wage Category between 2008 to 2013 Higher-WageMid-WageLower Wage(000s)(60)(40)(20)02008-2009 Sources: EMSI 2013.3 & GMU Center for Regional Analysis20402010-20136080 21. The Current Baseline for the Regions Future Growth: What Are the Current Trends? 22. (000s)15 Largest Job Markets Job Change: Nov 2012 Nov 2013250 200Washington +24,100150 100 50 0Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 23. Job Change by Sector Nov 2012 Nov 2013 Washington MSA (000s) 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.(20.0)Total = 24,1000 -10 2 6 416 -1 0 7 -2 0 -2 3(10.0)-10.020.0Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis30.0 24. Job Change by Sector Oct 2013 Nov 2013 Washington MSA (000s) 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.(20.0)Total = 11,6001 -2 1 3 8-1 -1 0 0 0 0 0 3(10.0)-10.020.0Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis30.0 25. Annual Job Change District of Columbia, 2002-2013 (000s) Annual Data60 50 40 30 20 10 0 -10 -20 -30 -402009Annual Month over Year2010201120122008 2005 2002 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis2013 26. Job Change by Sector Oct 2013 Nov 2013 District of Columbia (000s) 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.(20.0)Total -1,2001 -2 0 0 1-1 0 -1 0 0 0 0 0(10.0)-10.020.0Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis30.0 27. Annual Job Change Suburban Maryland, 2002-2013 (000s) Annual Data60 50 40 30 20 10 0 -10 -20 -30 -402009Annual Month over Year2010201120122008 2005 2002 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis2013 28. Job Change by Sector Oct 2013 Nov 2013 Suburban Maryland (000s) 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.(20.0)Total 4,8000 0 1 1 3-2 0 0 0 0 0 0 1(10.0)-10.020.0Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis30.0 29. Annual Job Change Northern Virginia, 2002-2013 (000s) Annual Data60 50 40 30 20 10 0 -10 -20 -30 -402009Annual Month over Year2010201120122008 2005 2002 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis2013 30. Job Change by Sector Oct 2013 Nov 2013 Northern Virginia (000s) 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.(20.0)Total 8,200-1 0 1 2 5 1-1 0 0 0 0 0 1(10.0)-10.020.0Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis30.0 31. Unemployment Rates in the WMSA By Sub-State Area, 2006-2013 12 10 87.3 DC 7.0 U.S.65.3 SMD 4.9 MSA44.0 - NVA2 0Source: Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US Seasonally Adjusted) 32. Economic Outlook for the Washington Metropolitan Area: 2013-2018 33. Washington Metropolitan Area and U.S. Economic Growth 2012-2018 (annual percent real change)Year 2012 2013 2014 2015 2016 2017 2018WMSA 1.28 1.26 2.65 3.56 3.40 3.42 3.28U.S. 2.8 1.8 2.5 3.2 3.3 3.3 2.9Sources: IHS Global Insight; GMU Center for Regional Analysis 34. U.S. GDP and Washington Area GRP 2001 2013 2018 %6 Washington4U.S.2 0-2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018-4Source: IHS Global Insight, GMU Center for Regional Analysis 35. Employment Change in the WMSA by Sub-State Area (000s) 2011 201220132014 2015 2016 2017 201814.15.64.44.820.7 18.1 22.7 20.0 14.3 12.2No. VA26.4 23.514.6 32.2 31.8 36.8 35.0 30.3REGION42.6 32.237.5 60.2 66.1 66.4 56.2 47.4D.C. Sub. MD1.99.7 11.39.3Average Annual Change 1990-2010 = 36,000 Source: BLS, IHS Global Insight, GMU Center for Regional Analysis NOTE: The regional totals include Jefferson, WV.6.54.6 36. Thank You Questionscra.gmu.edu 37. Back to the Future Part II On Behalf ofThe Real Deal Seminar By: Anirban Basu Sage Policy Group, Inc. January 28th, 2014 38. Raging Bull(1980) 39. Top 12 Stock Exchanges 2013 Growth* Rank 4 2 1 6 8 12 5 10 3 9 11 7Exchange Tokyo SE Nasdaq NYSE Group Frankfurt SE Bolsa De Madrid Swiss Exchange Euronext BorsaItaliana London SE TSX Group Hong Kong Exchanges Shanghai SESource: Yahoo! Finance*Change from the 2012 close to the 2013 close.Index Nikkei 225 NASDAQ Composite DJI A DAX Madrid General Swiss Market CAC 40 FTSE MIB FTSE 100 S&P TSX Composite Hang Seng Index Shanghai Composite% Change 56.7% 38.3% 26.5% 25.5% 21.4% 20.2% 18.0% 16.6% 12.0% 9.6% 2.9% -6.8% 40. S&P Select Sector Performance 12-Month Percent Change as of December 31st, 2013 41.0%Consumer Discretionary38.7%Health Care 33.2%Financials37.6%Industrials 22.7%Materials Consumer Staples22.7%Energy22.3% 26.2%Information Technology 8.8%Utilities6.5%Telecommunication Services 0%10%20%30%12-month percent change Source: Standard & Poors40%50% 41. Federal Reserve Balance Sheet v. S&P 500 Index May 2008 December 2013 FRB Credit Reserve $Trillions 4.3S&P 5003.8 3.31900 1700S&P 500 index depicted in orange150013002.311001.89001.37000.8500 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-132.8Source: Federal Reserve Bank; Yahoo Finance 42. Third Quarter Earnings for Select Corporations Earnings per Share Symbol Q3 2012FCX VFC BTU MSFT COF DD VZ MMM TXN AMD YHOO$0.68 $3.52 $0.51 $0.60 $2.01 $0.32 $0.64 $1.65 $0.52 -$0.20 $0.35Source: Yahoo! FinanceQ3 2013 Q3 2013 Surprise Estimated Reported$0.62 $3.78 -$0.04 $0.54 $1.80 $0.41 $0.74 $1.75 $0.53 $0.02 $0.33$0.79 $3.91 $0.05 $0.62 $1.86 $0.45 $0.77 $1.78 $0.56 $0.04 $0.34$0.17 $0.13 $0.09 $0.08 $0.06 $0.04 $0.03 $0.03 $0.03 $0.02 $0.01Symbol Q3 2012UTX XRX GE COH UPS MCD HON DOW CMG CAT STI$1.37 $0.25 $0.36 $0.77 $1.06 $1.43 $1.20 $0.42 $2.27 $2.54 $1.98Q3 2013 Q3 2013 Surprise Estimated Reported$1.54 $0.25 $0.35 $0.76 $1.15 $1.51 $1.24 $0.54 $2.78 $1.67 $0.69$1.55 $0.26 $0.36 $0.77 $1.16 $1.52 $1.24 $0.50 $2.66 $1.45 $0.33$0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.00 -$0.04 -$0.12 -$0.22 -$0.36 43. Industrial Production January 2001 through December 2013 105Index (2007 = 100)100(Base year: 2007)959085Jan-01 Jun-01 Nov-01 Apr-02 Sep-02 Feb-03 Jul-03 Dec-03 May-04 Oct-04 Mar-05 Aug-05 Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08 May-09 Oct-09 Mar-10 Aug-10 Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 Jul-13 Dec-1380Source: Federal ReserveThe industrial production index measures the real output of the manufacturing, mining, and electric and gas utilities industries. 44. 1990Q1 1990Q4 1991Q3 1992Q2 1993Q1 1993Q4 1994Q3 1995Q2 1996Q1 1996Q4 1997Q3 1998Q2 1999Q1 1999Q4 2000Q3 2001Q2 2002Q1 2002Q4 2003Q3 2004Q2 2005Q1 2005Q4 2006Q3 2007Q2 2008Q1 2008Q4 2009Q3 2010Q2 2011Q1 2011Q4 2012Q3 2013Q2Percent Change from Preceding Period (SAAR)Gross Domestic Product1990Q1 through 2013Q3 8%6%2013Q3: 4.1%4%2%0%-2%-4%-6%-8%-10%Source: Bureau of Economic Analysis 45. Contributions to GDP Growth by Component Q3 2012 Q3 2013 Q3-123.0Q4-12Q1-13Q2-13Q3-132.562.5 2.0 1.51.5 1.2 1.11.00.70.70.71.0 SAAR (%)1.41.2 1.360.50.140.080.0-0.1-0.5 -1.00.0-0.1 -0.3-0.4-0.8 -1.3-1.5 -2.0Personal Consumption Source: Bureau of Economic AnalysisGovernment SpendingNet ExportsGross Investment 46. Contributions to GDP Growth by Component Q3 2012 Q3 2013 Q3-12Q4-12Q1-13Q2-13Q3-133.5 2.56 2.5SAAR (%)1.51.00.70.5-0.5-0.41.671.61.41.0 0.40.890.90.60.4-0.2-1.5 -2.0-2.5 Gross Investment Source: Bureau of Economic AnalysisFixed InvestmentPrivate Inventory 47. Ordinary People(1980) 48. Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13ThousandsNet Change in U.S. Jobs, BLSJanuary 2002 through December 2013 6004002000-200-400December 2013: +74K-600-800-1000Source: Bureau of Labor Statistics 49. National Nonfarm Employment by Industry Sector December 2012 v. December 2013 Professional and Business Services637Trade, Transportation, and Utilities517Leisure and Hospitality390Education and Health Services327Construction122Financial Activities84Manufacturing77Mining and Logging31Other Services30Information GovernmentAll told 2,186 K Jobs gained-4 -25-1000100200300Thousands, SA Source: Bureau of Labor Statistics400500600700 50. Cumulative Job Growth Since December 2007: Full-time v. Part-time December 2007 December 2013 6,0004,000 2,000 0 -2,000 -4,000Full-timePart-time-6,000-8,000 -10,000Source: Bureau of Labor Statistics, Current Population SurveyFull-time: -4.33 million Part-time: +2.63 millionDec-13Sep-13Jun-13Mar-13Dec-12Sep-12Jun-12Mar-12Dec-11Sep-11Jun-11Mar-11Dec-10Sep-10Jun-10Mar-10Dec-09Sep-09Jun-09Mar-09Dec-08Sep-08Jun-08Mar-08Dec-07-12,000 51. Maryland Nonfarm Employment by Industry Sector Groups (SA) November 2013 v. November 2012 Absolute Change Professional and Business Services14,800Education and Health Services9,600Trade, Transportation, and Utilities6,300Mining, Logging, and Construction5,600Other Services1,400Government200Financial Activities100Leisure and HospitalityUS Total (SA): +2,293K; +1.7%-1,000ManufacturingMD Total: +33.5K; +1.3%-1,400Information -10,000-2,100 -5,00005,00010,000Source: Bureau of Labor Statistics*According to the Local Area Unemployment Statistics (LAUS) series MD lost 13,618 jobs between November 2012 and November 2013.15,00020,000 52. Baltimore-Towson MSA Nonfarm Employment by Industry Sector Groups (NSA) November 2013 v. November 2012 Absolute Change Education and Health Services10,000Professional and Business Services7,800Trade, Transportation, and Utilities6,400Mining, Logging, and Construction3,300Financial Activities2,200Other Services1,300Leisure and Hospitality900Information Government Manufacturing -8,000 Source: Bureau of Labor Statistics-600Baltimore MSA Total: +25.2K; +1.9% MD Total (SA): +33.5K; +1.3% US Total (SA): +2,293K; +1.7%-2,700 -3,400 -3,0002,0007,00012,000 53. Washington, DC-Arlington-Alexandria MSA Nonfarm Employment by Industry Sector Groups (NSA) November 2013 v. November 2012 Absolute Change Leisure and Hospitality16,200Financial Activities7,000Trade, Transportation, and Utilities5,100Education and Health Services1,900Other Services0Professional and Business Services-200Manufacturing-200Mining, Logging, and Construction Information Government -10,000 Source: Bureau of Labor StatisticsDC MSA Total: +24.1K; +0.8%-500US Total (SA): +2,293K; +1.7%-1,700 -3,500 -5,00005,00010,00015,00020,000 54. Employment Growth, U.S. States (SA) November 2012 v. November 2013 Percent Change RANK 1 2 2 4 4 6 6 8 9 9 11 12 12 12 12 16 16STATE NORTH DAKOTA FLORIDA TEXAS GEORGIA IDAHO OREGON UTAH INDIANA COLORADO DELAWARE ARIZONA MISSOURI NEVADA NEW JERSEY SOUTH CAROLINA MASSACHUSETTS MISSISSIPPI% 4.0 2.5 2.5 2.3 2.3 2.2 2.2 2.1 2.0 2.0 1.9 1.8 1.8 1.8 1.8 1.7 1.7RANK 18 18 20 20 20 20 20 25 25 25 28 29 29 31 31 31 31STATECALIFORNIA SOUTH DAKOTA KANSAS MICHIGAN MINNESOTA NEW YORK WISCONSIN NORTH CAROLINA TENNESSEE WASHINGTON MARYLAND RHODE ISLAND WEST VIRGINIA ARKANSAS LOUISIANA NEBRASKA VERMONT% 1.6 1.6 1.5 1.5 1.5 1.5 1.5 1.4 1.4 1.4 1.3 1.2 1.2 1.1 1.1 1.1 1.1Source: Bureau of Labor StatisticsU.S. Year-over-year Percent Change: 1.7%RANK 35 35 35 35 39 40 40 40 43 44 44 46 47 48 48 50 51STATECONNECTICUT ILLINOIS MONTANA OKLAHOMA IOWA HAWAII MAINE WYOMING VIRGINIA NEW HAMPSHIRE PENNSYLVANIA OHIO KENTUCKY ALABAMA NEW MEXICO DISTRICT OF COLUMBIA ALASKA% 1.0 1.0 1.0 1.0 0.9 0.8 0.8 0.8 0.7 0.6 0.6 0.4 0.3 0.2 0.2 0.0 -1.0 55. Unemployment Rates, U.S. States (SA) November 2013 RANKSTATE%RANKSTATE%RANKSTATE%1NORTH DAKOTA2.615WEST VIRGINIA6.135NEW YORK7.42SOUTH DAKOTA3.619ALABAMA6.235NORTH CAROLINA7.43NEBRASKA3.720LOUISIANA6.335OHIO7.44 5UTAH HAWAII4.3 4.420 22WISCONSIN FLORIDA6.3 6.438 39ARKANSAS CONNECTICUT7.5 7.65IOWA4.422MAINE6.440GEORGIA7.75VERMONT4.422MARYLAND6.441ARIZONA7.85WYOMING4.422NEW MEXICO6.441NEW JERSEY7.89MINNESOTA4.626ALASKA6.543TENNESSEE8.110KANSAS5.126COLORADO6.544KENTUCKY8.210NEW HAMPSHIRE5.126DELAWARE6.545MISSISSIPPI8.312MONTANA5.229WASHINGTON6.846CALIFORNIA8.513OKLAHOMA5.430MASSACHUSETTS7.147DISTRICT OF COLUMBIA8.613VIRGINIA5.430SOUTH CAROLINA7.148ILLINOIS8.715IDAHO6.132INDIANA7.349MICHIGAN8.815MISSOURI6.132OREGON7.350NEVADA9.015TEXAS6.132PENNSYLVANIA7.350RHODE ISLAND9.0Source: Bureau of Labor StatisticsU.S. Unemployment Rate: 7.0% 56. Unemployment Rates, 20 Largest Metros (NSA) November 2013 RankMSAURRankMSAUR1Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area4.010Miami-Fort Lauderdale-Pompano Beach, FL Metropolitan Statistical Area6.32Washington-Arlington-Alexandria, DC-VA-MDWV Metropolitan Statistical Area4.912St. Louis, MO-IL Metropolitan Statistical Area6.53Dallas-Fort Worth-Arlington, TX Metropolitan Statistical Area5.6133Houston-Sugar Land-Baytown, TX Metropolitan Statistical Area5.614San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area New York-Northern New Jersey-Long Island, NY-NJ-PA Metropolitan Statistical Area5Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area5.715Philadelphia-Camden-Wilmington, PA-NJDE-MD Metropolitan Statistical Area7Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area6.018Detroit-Warren-Livonia, MI Metropolitan Statistical Area8.39Tampa-St. Petersburg-Clearwater, FL Metropolitan Statistical Area6.219Los Angeles-Long Beach-Santa Ana, CA Metropolitan Statistical Area8.5Baltimore-Towson, MD Metropolitan Statistical Area6.320Riverside-San Bernardino-Ontario, CA Metropolitan Statistical Area9.4Source: Bureau of Labor Statistics156.0177.07105.86.9Boston-Cambridge-Quincy, MA-NH Metropolitan NECTA San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area6Atlanta-Sandy Springs-Marietta, GA Metropolitan Statistical Area Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area6.87.0 8.1 57. MD County Unemployment Rates November 2013 RankJurisdictionURRankJurisdictionUR1Howard County4.513Garrett County6.31Montgomery County4.513Talbot County6.33Calvert County5.115Baltimore County6.43Frederick County5.116Cecil County6.65Carroll County5.217Allegany County7.05St. Mary's County5.218Caroline County7.27Charles County5.319Washington County7.38Queen Anne's County5.420Wicomico County8.28Anne Arundel County5.421Dorchester County9.110Harford County5.821Baltimore City9.111Kent County6.223Somerset County9.411Prince George's County6.224Worcester County14.0Source: Bureau of Labor Statistics 58. Field of Dreams (1989) 59. 15-Year & 30-Year Fixed Mortgage Rates February 1995 through January 2014 10% 9%15-yr8%30-yrRate7% 6%4.41%5% 4% 3%Source: Freddie MacNovMaAugNovFebMaAugNovFebMaAugNovFebMaAugNovFebMaAugNovFebMaAugNovFeb1%Feb3.45%2% 60. U.S. New Home Sales January 1999 through November 2013 1,600Thousands, SAAR1,4001,200 1,000 800 600 400 200 0Source: Economy.com, Census BureauNovember 2013 464K 61. 0 Jan Jun No Ap Sep Feb Jul- De Ma Oc Ma Au Jan Jun No Ap Sep Feb Jul- De Ma Oc Ma Au Jan Jun No Ap Sep Feb Jul-11 De Ma Oc Ma AuThousands, SAARU.S. Housing StartsJanuary 1999 through November 2013 2,500 1 UnitSource: Census Bureau5 units or more2,0001,5001,000500 62. S&P/Case-Shiller Home Price Indices for Select Metros October 2013, 12-Month Percentage Change 30%27.1% 24.6%12-Month % Change25%22.1%20% 15.8% 13.6%15% 10%7.4% 4.9%5% 0%Source: Standard & Poors8.6%9.5%9.7%10.9%17.3%19.0% 63. Housing Inventory by Baltimore MSA Jurisdiction+ December 2012 v. December 2013 13.814Dec-12Dec-1312Months of Inventory13.411.0109.18 6.2 5.666.0 5.54.746.6 5.9 5.24.33.93.5 3.12 0 Anne Arundel Baltimore CityBaltimore CountyHarfordHowardCarrollSource: Maryland Association of RealtorsMaryland = Dec. 2012: 5.0 months; Dec. 2013: 4.9 monthsQueen Anne'sTalbot 64. Area Office Market Statistics 2013 Q4 AreaAvailable SFDirect Vacancy Rate %Q4 2013 Net Absorption SFYTD 2013 Net Absorption SFAvg Asking Rent $/SF/YRCity Center3,170,01116.65%60,360335,742$20.85Other Baltimore City1,193,58013.82%9,32145,314$20.73Total City4,363,59115.67%69,681381,056$20.82Southern Metro4,686,45313.86%-26,904289,394$24.62Northern Metro5,377,68416.18%54,235-69,160$21.67Total Metro10,064,13715.00%27,331220,234$23.04TOTAL MARKET14,427,72815.20%97,012601,290$22.37Source: MacKenzie Commercial Real Estate Services 65. Area Flex Industrial Market Statistics 2013 Q4 AreaAvailable SFAnnapolis 731,655 Arbutus 386,793 Balt County East 411,323 Baltimore City 995,539 BW Corridor 2,291,123 Carroll 234,120 Harford/ Cecil 475,751 I-83 Corridor 389,178 Reisterstown Road 605,036 Woodlawn/ Catonsville 383,821 TOTAL MARKET 6,904,339 Source: MacKenzie Commercial Real Estate ServicesDirect Vacancy Rate %Q4 2013 Net Absorption SFYTD 2013 Net Absorption SFAvg Asking Rent $/SF/YR7% 15% 10% 14% 8% 16% 17% 5% 17% 9% 10%-50,632 33,065 10,554 28,183 100,236 7,500 12,440 -43,129 -12,478 -9,731 76,008-48,480 14,848 111,226 74,831 306,991 24,322 35,666 28,891 -12,977 -46,703 488,615$16.13 $7.95 $11.46 $7.87 $11.90 $8.76 $10.21 $10.74 $10.42 $9.87 $10.99 66. Area Warehouse Industrial Market Statistics 2013 Q4 AreaAvailable SFAnnapolis 790,010 Arbutus 1,090,330 Balt County East 4,704,779 Baltimore City 6,867,140 BW Corridor 7,819,752 Carroll 1,048,368 Harford/ Cecil 2,719,817 I-83 Corridor 396,669 Reisterstown Road 215,341 Woodlawn/ Catonsville 305,327 TOTAL MARKET 25,957,533 Source: MacKenzie Commercial Real Estate ServicesDirect Vacancy Rate %Q4 2013 Net Absorption SFYTD 2013 Net Absorption SFAvg Asking Rent $/SF/YR6.50% 10.95% 11.95% 7.57% 11.34% 9.70% 4.08% 6.24% 3.07% 10.30% 8.52%18,312 36,489 191,292 242,409 267,567 59,518 259,071 41,205 -4,300 -116,190 995,373232,328 52,268 -91,882 -8,134 399,917 287,856 1,700,435 -151,207 -70,999 -104,892 2,245,690$6.44 $4.63 $4.11 $4.34 $5.28 $4.23 $4.43 $7.77 $7.50 $4.04 $4.74 67. The Shining (1980) 68. Source: Conference BoardNov-13Aug-13May-13Feb-13Nov-12Aug-12May-12Feb-12-1.0%Nov-11Aug-11May-11Feb-11Nov-10Aug-10May-10Feb-10Nov-09Aug-09May-09Feb-09Nov-08Aug-08May-08Feb-08Nov-07Aug-07One-month Percent ChangeConference Board Leading Economic Indicators IndexAugust 2007 through November 2013 1.5%1.0%0.5%0.0%-0.5%November 2013 = 98.3 where 2004=100-1.5% 69. Coming to America (1988) Economy gained momentumover the course of last year; Tailwinds included boomingstock market, lower gasoline prices, stabilizing global economy, and consumer expenditures on interest rate sensitive durable goods like housing and autos; The current year is associatedwith greater certainty regarding federal budgeting and monetary policy that helps; The world is not perfect - black swan threats remain: (1) Iran (2) Israel/Iran (3) Europe (4) contagion (5) cyber (6) EMP; Healthcare reform could slow full-time hiring over the course of the year; and Further evidence of Marylands economic and demographic under-performance. 70. Thank You Follow us on Twitter @SagePolicyGroup You can always reach me atabasu@sagepolicy.com Please look for updates of information at www.sagepolicy.com. 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.