US and Canada Economic Map – June 2012

U.S. and Canada Economic Map – June 2012
June 2012 Real GDP
U.S. Perspective
Canada Perspective

The U.S. experienced strong, but slowing employment growth during the first 4 months
of the year. Unemployment is trending downwards at a modest pace.


Productivity growth is slowing and companies will need to hire more to add to output
later this year.

Economic growth through the recovery has been robust, but the government is taking
the opportunity to reel in spending with austerity measures.

Eurozone and its impact on global growth will be the main risk to the national
economy.

Slower global economic growth will slow the demand for natural resources, putting
Western Canada at risk.
Although the Canadian economy has outperformed the U.S. since 2005, growth is
slowing. GDP grew an annualized 1.8 percent during first quarter 2012.
United States
Canada
Percent
5.0
0.0
-5.0
2007 2008 2009 2010 2011 2012 2013 2014
Seattle – Late in, late out, but posted a solid recovery
in 2011. Boeing's orders are solid and this high tech,
high quality-of-life metro may surprise to the upside.
Manufacturing, tech & business services will lead
Seattle into a better 2012 and 2013.
Vancouver – Global trade and demand for
commodities has helped Vancouver outperform during
the downturn, but a late May worker strike of CP
Railway endangers near-term growth for the metro.
Portland – Slow recovery continues. Full
employment recovery not expected until 2014.
Local manufacturing got a boost from Intel's plans
to build a new $4 billion chip plant by 2013.
San Francisco – The hot tech sector, especially
social media and gaming, keeps demand
intense for "cool" office space, concentrated
South of Market. SFO's 2011 passenger traffic
hit an all-time high, and housing prices will
recover more than any major CA metro.
San Jose – Scary-strong! Is it too
good to be true? Expect a solid longcycle expansion in the nation's high
tech hub. A diversified tech base,
leveraged on global expansion, is
poised to weather near-term worries
and finally climb out of the dot.com
bust in this cycle.
Boston – The metro's robust high
tech and biotech sectors continue
to fuel steady economic growth.
CANADA
Portland
Detroit
UNITED STATES
Reno
San Francisco
San Jose
Honolulu
St. Louis
Las Vegas
Fresno
Orange
Los
County
Angeles
Kansas City
Albuquerque
San Diego
Baltimore
Philadelphia – Despite a diverse economy,
leading job sectors have yet to see meaningful
growth. The shutdown of local oil refineries, local
budget issues, and Big Pharma layoffs pose
significant downside risks.
Raleigh
Nashville
Charlotte
Washington, D.C. – The effects of federal budget cuts
are rippling through the metro, disrupting tenant leasing
decisions and causing private contractors to retrench.
Atlanta
Dallas-Ft. Worth
Baltimore – Centered around Forte Meade
and the NSA, Baltimore is emerging as a
premier hub for U.S. Cyber Security.
Raleigh – Growing technology cluster of
mostly biotech and other high-tech firms is
attracting skilled workers to the metro area.
Jacksonville
Orange County – Recent job growth is average vs. 30
biggest U.S. metros, and its 12% job loss remains a challenge,
but a high quality workforce will attract a late bloom.
Relative Rates of Employment Growth:
2012 - 2014
Oklahoma City
Northern New Jersey – After reporting
record volume levels in 2011, the Port of
New York/New Jersey is forecast to post
another year of solid growth. The recession
in Europe—a large export market—is a risk.
Columbus
Washington, D.C.
Cincinnati
Phoenix
Los Angeles – Is below U.S. in % of jobs
below peak, has high foreclosure rates and will lag
U.S.. Westside and Burbank are hot bright spots
fueled by entertainment and tech, respectively.
San Diego – Is undergoing a stable recovery and is
largely shielded from tightening Pentagon budget.
Cleveland
Stamford
Newark
Philadelphia New
Pittsburgh
York
Indianapolis
Oakland
Riverside
Chicago
Denver
New York - Trending in more ways
than one, eBay became the latest tech
giant to locate in NYC. Dodd-Frank
regulation, the European debt crisis and
a sluggish U.S. economic environment
increase Wall Street’s near-term risk.
Boston
Toronto
Minneapolis
Salt Lake City
RREEF Real Estate
Toronto – Housing market remains red hot, bucking
the trend in other parts of Canada. Prices continue
to climb with an 8.5% jump from a year ago.
Vancouver
Sacramento
Leading the national average
Near the national average
Lagging the national average
Sources: IHS Global Insight, Moody's and BLS.
Seattle
Sacramento – Govt. is 28% of jobs, with further
state cuts coming and a housing market among
the worst in CA. Need we say more?
Oakland – Hardest hit of Bay Area
metros, recovery will lag. Govt.'s
high employment share, more
state cuts, and weak housing
recovery will drag on its economy.
Minneapolis – Relatively
stable metro, with strongest
economy in the Midwest.
Chicago – High unemployment
and falling housing prices remain
huge problems in this late-downturn
market, and recovery is expected to
be among the weakest of major U.S.
metros, despite positive drivers.
Riverside – Barely worked its way
back to positive year/year job growth
in 2011, and falling home prices and
federal job cuts can hamper growth.
Austin
Houston
New Orleans
Orlando
Tampa
San Antonio
Denver – Is striving to become a leader in innovative,
sustainable energy technologies. In the past two years,
more than 20 solar and wind companies have announced
they would either expand or relocate to the Denver area.
Phoenix – Is rebounding at last, but from a deep trough.
Home prices will continue to fall and bottom in 2012.
Austin – Following a modest downturn, tech is fueling a boom. The drag from
state government will not be enough to hurt the near-term outperform outlook.
Dallas-Ft. Worth – Texas is best! A short sharp recession is behind
DFW and the near-term outlook is good. Defense-related cuts and
natural gas woes may dampen FW a bit, but Dallas's recovery should
accelerate sharply by 2013.
Atlanta – Is on the upswing but it has been
a slow recovery. Total employment is
expected to return to previous peak in 2014.
W. Palm Beach
Ft. Lauderdale
Miami
Houston – A rapid recovery fueled by
strong oil demand makes this a leading
metro, with further support from medical.
West Palm Beach - While housing remains a major
concern, recovery also depends on consumer confidence
and strengthening household balance sheets.
Fort Lauderdale – Defying a long slump, manufacturing
companies are suddenly hiring. The 10% gain in March
could mean a big shift for a battered industry.
Charlotte - Despite the generally
positive near-term outlook, the ongoing
reorganization and restructuring of Bank
of America and Wells Fargo will drag
growth in 2012.
Orlando – Has suffered much more than average
during the recession, but this very tourist-based metro
will benefit from the strengthening national economy,
growing international ties and new tourist attractions.
Miami – Miami is back! Job
growth has returned (+4.0%
since 2009) and is benefiting
from strong Latin American
growth. Even its famously
overbuilt housing market is
recovering.
Important notes
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The forecasts provided are based upon our opinion of the market as at this date and are subject to change, dependent on future changes in the market. Any prediction, projection or forecast on
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Sources: CBRE-EA, IHS Global Insight, Moody’s Analytics, RREEF Real Estate.
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U.S. and Canada Economic Map – June 2012
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