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FEDERAL RESERVE BANK OF SAN FRANCISCO Western Economic Developments West Coast port disruptions highlight flexibility of U.S. businesses Figure 1: Imports of holiday retail items (12-month change in shares) Panel A. Shifts in transportation mode Percentage point 6 4 2 0 -2 -4 -6 Vessel transportation Air transportation Panel B. Shifts in port of arrival Percentage point 8 Although the closure of West Coast ports in October disrupted vessel traffic and increased shipping times and costs well into November, the disruptions did not stop the movement of goods into and out of the U.S. Businesses worked around the disruptions, in part, by diverting cargo to other ports and by shifting to other modes of transportation. Such work-arounds are illustrated in Figure 1, Panels A and B, which show 12-month changes in the share of holiday retail imports (in value terms) moving by vessel and air and via West Coast and other U.S. ports from May through September 2002. As Panel A shows, there was a notable shift towards air beginning in June. Panel B shows that retailers also shifted to other U.S. seaports not engaged in the contract dispute. Overall, these data confirm reports from contacts and provide some indication of why the port disruptions had a limited impact on overall economic activity. Most importantly they highlight the flexibility of the U.S. economy and underscore the ability of businesses to find solutions to shortterm disruptions in supply networks. DECEMBER 2002 6 4 District recovery down but not out ........................................................ 2 0 -2 -4 -6 -8 West Coast ports May-02 Jun-02 Other ports Jul-02 Aug-02 Sep-02 Note: Holiday retail items are comprised of 16 categories including toys, games, sports equipment, clothing, essential oils and perfumes, printed books, calendars, printed and illustrated cards, clocks and watches, soaps, glassware, etc. Source: Global Trade Information Services, Inc., Census Bureau. IN THIS ISSUE 2 Commercial real estate slips further, residential cools ..................... 2 District IT advantage holds ........................................................................ 3 Capital expenditure plans stable for 2003 ........................................... 4 High-tech Watch ........................................................................................... 5 STATE HIGHLIGHTS Alaska, Oregon, Washington .................................................................. 6 Arizona, California, Hawaii ...................................................................... 8 Idaho, Nevada, Utah ............................................................................... 10 District recovery down but not out As in the nation, the economic recovery in the West proceeded sluggishly in recent months, with the pace of growth down from earlier in the year. The recent slowdown or “soft patch” reflects, in part, the falloff in consumer spending over the past several months. Following a robust summer, many District consumers took to the sidelines in September, spending cautiously well into November (Figure 2). Slower spending growth corresponded with the end of several zero-percent financing deals and a deterioration in consumer sentiment (as measured by the Conference Board) regarding the economic conditions in the West. Looking forward, early tallies of holiday sales indicate that District consumers may be coming back. Initial reports on store traffic and sales point to solid growth relative to last year, often above expectations. Figure 3: Employment in the 12th District (annualized growth) Percent 3 2 Non - IT Govt. svcs. Dec-01 to Jun-02 Jun-02 to Oct-02 FIRE 1 Wholesale trade 0 Retail trade -1 Const. -2 IT-related svcs. -3 TCPU -4 -5 Dur. mfg. - IT Non-dur. mfg. -6 IT mfg. -7 Source: Bureau of Labor Statistics. District employment remained flat in recent months (Figure 3), as slower spending growth, weaker exports, and a falloff in domestic shipments and orders of manufactured goods constrained growth. Responding to more moderate consumer spending, hiring among District retailers stalled, with little change in job counts from June to October. The pace of job cuts in information technology (IT) manufacturing and services accelerated in recent months, as companies responded to slower sales and orders growth and lowerthan-expected earnings. Weaker domestic and foreign sales projections induced additional layoffs among nondurable manufacturers in the District. Greater weakness in these sectors more than offset the pickup in growth in finance, inFigure 2: Retail sales growth (month-to-month annualized change) Percent 30 US West 20 10 surance, and real estate (FIRE), wholesale trade, non-IT services, and the government. Reports from District businesses suggest that job markets may be slow to recover. Caution, cost-cutting, and a focus on productivity enhancements likely will continue to constrain hiring in the near term. Commercial real estate slips further, residential cools The slower pace of recovery further depressed conditions in commercial real estate. The release of office space by several financial and IT companies pushed office vacancies higher and lease rates lower in a number of District cities (see State Highlights section). Consistent with continued weakness, nonresidential construction awards declined in recent months, with double-digit reductions relative to earlier in the year recorded in many states. Nevada is the single exception to this trend, where construction of new hotel and gaming properties continued at a solid pace. District residential real estate markets also cooled, but housing remains a positive for growth. Third quarter data from the Office of Federal Housing Enterprise Oversight (OFHEO) show that District home prices rose 6.1% at an annual rate between the second and third quarters (Figure 4).1 In the U.S. as a whole, home prices rose 3.4%. Across District 0 -10 -20 -30 -40 Nov-01 Jan-02 Mar-02 May-02 Jul-02 Sep-02 Note: West includes AK, AZ, CA, CO, HI, ID, MT, NM, NV, OR, UT, WA, and WY. Source: Bank of Tokyo-Mitsubishi, Ltd. 2 Nov-02 1 Data are from OFHEO repeat sales index. Growth rates are annualized percent changes from the previous quarter. Western Economic Developments Federal Reserve Bank of San Francisco December 2002 Figure 4: Nominal house price appreciation (percent change from previous quarter) Percent 20 Figure 5: Industry employment as a share of all IT employment 2002:Q1 2002:Q2 2002:Q3 15 Percent 60 50 10 40 5 30 California Washington District ex CA & WA U.S. ex District 20 0 10 -5 0 -10 US 12th* AK AZ CA HI ID NV OR UT WA Computer & Household A/V Electronic components & & comm. office accessories equipment equipment Instruments Communication Computer & services data processing services * Weighted average using quarter-end nonagricultural employment statistics. Source: Office of Federal Housing Enterprise Oversight. states, Alaska, Arizona, Utah, and Washington posted slower home price appreciation than the nation. District IT advantage holds The District’s large concentration of IT firms made it quite vulnerable to the nationwide downturn in the technology sector. However, with the exception of the computer services sector, the District IT sector has lost jobs at a slower pace than the IT sector in the rest of the U.S., maintaining its relative advantage in IT-related production. IT sector composition Measured by employment or payroll, IT accounts for a larger share of economic activity in the District than in the rest of the nation. The IT share of nonagricultural employment is about 50% higher in the District than in the rest of the nation (6.1% versus 4.1%), and the IT share of nonagricultural payrolls is about twice as high in the District (14.6% versus 7.5%). Within the District, California and Washington have the greatest economic dependence on the IT sector (measured in terms of the IT share of total payrolls), although Arizona, Idaho, Oregon, and Utah each has a higher IT share of employment and payrolls than does the rest of the nation (see High-tech Watch charts). The distribution of activities within the IT sector varies between the District and the rest of the nation, and across District states (Figure 5). Following unusually rapid growth in computer services employment during the late 1990s, in the year 2000 IT services (computer and communications) accounted for about half or more of IT employment in most Source: U.S. Bureau of Labor Statistics, Covered Employment and Wages. parts of the nation. However, with the notable exception of Washington, computer services accounts for a slightly smaller share of IT employment in the District than in the rest of the nation. Within the manufacturing segment of the IT sector, the District is distinguished by a greater share of computer and office equipment manufacturing (mainly in California) and by its large share of electronic components manufacturing (outside of California and Washington). Growth performance Using monthly data, it is possible to measure overall IT employment in California and the rest of the U.S. based on a definition that is nearly as comprehensive and precise as in the yearly employment data discussed above (the analyses that follow exclude communications services from the definition of the IT sector). A breakdown of overall IT employment growth into its separate manufacturing and services components reveals a very large growth swing in the IT services sector in California (Figure 6). Growth in this sector in California surged in the year 2000, then plummeted during the downturn, falling well below the growth rate in IT services in the rest of the nation until the last few months. This reflects California’s greater exposure to the Internet and dot-com bust, especially in the San Francisco Bay Area. The boom-and-bust cycle in computer services implies that California’s overall IT sector has declined more than the IT sector in the rest of the nation. However, this largely reflects a fall from the giddy heights of the Internet boom rather than any underlying weakness (relative to the rest of the nation) in other segments of California’s computer services sector. Washington also saw a boom-andclothing Western Economic Developments December 2002 Federal Reserve Bank of San Francisco 3 Figure 6: Broad sector IT employment (percent change over year earlier) Figure 7: Electronic and electric equipment employment (percent change over year earlier) Percent 50 Percent CA: IT mfg. CA: IT svcs. US ex CA: IT mfg. US ex CA: IT svcs. 40 20 15 30 10 20 5 ID/OR/UT U.S. 0 10 -5 0 -10 -10 -15 -20 -20 Oct-97 Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Source: U.S. Bureau of Labor Statistics, Current Employment Statistics, and California Employment Development Department. bust cycle in its computer services sector, although it was less pronounced than in California. In contrast to the pattern in the services sector, California’s IT manufacturing sector grew somewhat more rapidly than IT manufacturing in the rest of the nation during the year 2000, and it has declined less rapidly during the subsequent downturn (Figure 6). This likely reflects the underlying composition of California’s IT manufacturing establishments, which are more focused on research and development and executive functions, compared to a preponderance of cyclically sensitive production facilities in other states. Reasonably comprehensive and precise IT employment data are not available for Twelfth District states other than California. However, some information about the relative performance of these states’ IT sectors during the downturn can be inferred by examining employment growth among manufacturers of electronic and other electrical equipment. Although this sector includes products not generally considered to be high tech, it contains the electronic components and accessories sector, which in turn contains the semiconductor makers and related manufacturers that are critical to the IT sector in some District states outside of California. Figure 7 compares growth in this sector in the U.S. as a whole to the sum for Idaho, Oregon, and Utah. As in California, the IT manufacturing sector in other District states expanded more rapidly during the boom and contracted less rapidly during the downturn than did IT manufacturing in the rest of the nation. 4 Oct-97 Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Source: U.S. Bureau of Labor Statistics, Current Employment Statistics. Capital expenditure plans stable for 2003 A recent survey of District businesses about planned capital expenditures in 2003 indicated little change overall in capital investment budgets relative to 2002. Sales expectations and cash flow considerations were cited as the most important determinants of 2003 investment plans, with optimistic and profitable firms increasing capital budgets and pessimistic and profit-challenged firms holding steady or cutting back on expenditures. Among the firms planning to increase capital budgets, many noted capacity constraints as a motivating factor. A lack of compelling projects or “must have” technologies was cited as a factor restraining capital spending in 2003. Few District contacts mentioned tax incentives as having a significant influence on 2003 capital budgets. Capital investments in 2003 reportedly will be focused on improving near-term productivity and will be dominated by equipment replacement and technology upgrades. A number of businesses indicated that they will spend an increased share of their investment dollars purchasing discounted capital assets released by other businesses. Finally, contacts noted that the pace of their IT investment has slowed in recent years, largely due to the extended life of IT equipment and software. Contributions by Mary Daly, Rob Valletta, Lily Hsueh, Geoffrey MacDonald, and Jackie Yuen, Financial and Regional Studies, FRBSF. Interim updates to the statistical charts are available only online at http://www.frbsf.org/publications/economics/wed/index.html Western Economic Developments Federal Reserve Bank of San Francisco December 2002 High-tech Watch IT share of District employment and payroll Business investment in technology products by U.S. firms (percentage change in quarterly values) 60 Employment Payroll U.S. - 12th 12th 50 Computers & Peripherals 40 AK Communications Equipment 30 AZ 20 CA 10 HI ID 0 NV -10 OR -20 UT Information Processing Equipment & Software -30 WA -40 0 2 4 6 8 10 12 14 16 18 Percent share Source: Bureau of Labor Statistics. Monthly semiconductor sales by U.S. firms (percent change in 3-month moving averages) Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Source: Bureau of Economic Analysis. Shipments of computers and related products by U.S. firms (percent change in 3-month moving averages) 120 40 100 30 3 months prior* 80 20 60 3 months prior* Year-over-year 10 Year-over-year 40 0 20 -10 0 -20 -20 -30 -40 -40 -60 -50 -60 -80 Oct-97 Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 *Annualized values Source: Semiconductor Industry Association. Shipments of communications equipment by U.S. firms (percent change in 3-month moving averages) 100 Oct-98 40 3 months prior* 25 Oct-02 *Annualized values 20 40 15 20 Communications Equipment (CA) 10 Year-over-year 5 0 0 -20 -5 -10 -40 Electronic Components & Accessories (CA) -15 -60 Oct-98 Oct-01 Computer & Data Processing Services (WA and CA) 30 60 Oct-00 High-tech job growth (percent change over year earlier) 35 80 Oct-99 Source: Bureau of the Census. Computer & Office Equipment (CA, OR, WA) -20 Oct-99 Source: Bureau of the Census. Oct-00 Oct-01 Oct-02 *Annualized values Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Source: Bureau of Labor Statistics. Western Economic Developments December 2002 Federal Reserve Bank of San Francisco 5 STATE HIGHLIGHTS Alaska • Oregon • Washington Nonagricultural payroll employment by state (percent change over year earlier) Nonagricultural payroll employment by MSA (percent change over year earlier) 4 5 Anchorage 4 WA 3 3 2 2 AK 1 1 0 Portland-Vancouver -1 0 -2 U.S. -1 -3 OR -4 -2 -5 Seattle-Bellevue-Everett -6 -3 Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Percent Change 3-mo.a YTD a 12-mo. Source: Bureau of Labor Statistics. Source: Bureau of Labor Statistics. Employment by Industry "MBTLB Total Employed (thousands) Oct-02 Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 1-mo.a Percent Change 3-mo.a YTD a 12-mo. 295.4 9.6 15.5 14.0 27.5 59.6 12.9 75.8 80.5 2.9 0.0 -14.3 41.6 -4.3 4.1 20.6 0.0 3.0 2.9 -18.4 8.1 12.3 -2.9 5.6 6.4 6.0 0.0 1.6 -9.2 5.7 7.3 -2.6 1.6 0.0 3.4 1.5 1.4 -9.4 4.7 -0.7 -2.1 1.4 1.6 3.4 1.9 1,584.0 1.6 73.8 228.7 76.8 389.6 96.4 446.5 270.6 2.2 -51.7 8.5 9.9 -4.6 3.1 3.8 0.0 -1.3 0.3 -21.5 5.0 1.6 -4.1 -0.2 2.5 -0.4 0.6 0.3 -7.0 -1.3 0.2 -1.8 0.5 1.5 0.5 0.5 -0.2 -11.1 -2.3 -1.5 -2.3 0.1 0.8 0.6 0.1 8BTIJOHUPO Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 2,640.6 3.1 145.9 301.6 135.2 621.7 144.4 770.3 518.4 1-mo.a 3.5 48.2 0.0 -3.1 -6.0 -0.4 6.0 7.8 9.0 -1.1 0.0 2.8 -10.2 -4.6 -2.3 2.8 1.0 1.6 -0.7 -3.7 -0.4 -7.2 -4.9 -0.5 0.4 0.9 1.7 -1.4 -6.1 -2.7 -8.9 -6.2 -1.1 0.6 0.5 1.5 6OFNQMPZNFOU3BUFT 0SFHPO Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government Total Employed (thousands) Oct-02 Oct-02 Sep-02 Aug-02 Jul-02 Oct-01 Alaska Oregon Washington 6.8 7.0 6.7 7.5 6.8 7.4 7.3 7.0 7.2 6.7 7.3 7.1 6.1 7.2 6.9 U.S. 5.7 5.6 5.7 5.9 5.4 Unemployment rates are from the household employment survey; all other data are for nonagricultural payroll employment. All data are seasonally adjusted. Annualized. a Source: Bureau of Labor Statistics. 6 Western Economic Developments Federal Reserve Bank of San Francisco December 2002 Residential permits—October 2002 3-mo. average number Alaska Oregon Washington 295.5 1,849.6 3,514.6 Metro area office vacancy rates Moving average percent change 3-mo.a 12-mo.a 28.9 -7.1 -3.6 13.9 2.4 -4.6 Percent 20 18 16 14 Source: Bureau of the Census. 12 Non-residential construction awards—October 2002 3-mo. average $ millions Alaska Oregon Washington a 38.4 122.8 319.8 Moving average percent change 3-mo.a 12-mo.a 8 -52.5 -39.1 -1.8 2 9.4 -14.5 -19.5 Portland 10 6 Seattle 4 0 Sep-98 Underlying data are seasonally adjusted moving averages. Sep-99 Sep-00 Sep-01 Sep-02 Source: Torto Wheaton Research. Source: F.W. Dodge. Sales of existing homes (percent change over year earlier) Percent 25 40 20 15 Metro area office gross rents (percent change over year earlier) Seattle 30 WA 20 10 5 10 0 0 -5 -10 OR -20 -10 -15 Sep-98 Portland -30 Sep-99 Sep-00 Sep-01 Sep-02 Source: National Association of Realtors. Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Source: Torto Wheaton Research. Export update Home price index (percent change over year earlier) 12 Seattle-Bellevue-Everett 10 12 - month Percent Change $ billions 2001 September* 2000 2001 September* Alaska 2.4 2.0 -5.6 -2.0 4.7 4 Oregon 8.0 6.8 6.6 -24.0 13.8 2 Washington 33.9 25.4 -13.1 8.5 -0.8 8 6 Portland-Vancouver * Indicate year-to-date values. 0 Sep-98 Sep-99 Sep-00 Source: Office of Federal Housing Enterprise Oversight. Sep-01 Sep-02 Source: Census FT900 Supplement, Origin of Movement Series. Western Economic Developments December 2002 Federal Reserve Bank of San Francisco 7 STATE HIGHLIGHTS Arizona • California • Hawaii Nonagricultural payroll employment by state (percent change over year earlier) 6 Nonagricultural payroll employment by MSA (percent change over year earlier) 7 AZ 5 Phoenix SF Bay Area 5 4 3 3 CA 2 1 LA-Long Beach U.S. 1 0 -1 Honolulu HI -1 -3 -2 -3 -5 Nov-98 Nov-99 Nov-00 Nov-01 Nov-02 Nov-98 Nov-99 Nov-00 Nov-01 Nov-02 1-mo.a Percent Change 3-mo.a YTD a 12-mo. Source: Bureau of Labor Statistics. Source: Bureau of Labor Statistics. Employment by Industry "SJ[POB Total Employed (thousands) Oct-02 Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 1-mo.a Percent Change 3-mo.a YTDa 12-mo. 2,252.3 8.5 160.7 192.6 105.0 533.3 148.8 713.8 389.6 9.2 15.3 10.2 -1.2 13.5 -1.3 0.8 7.7 37.5 1.3 0.0 9.2 -4.0 -0.8 -3.9 -0.3 5.4 2.3 0.3 -7.9 0.4 -5.7 -3.6 -0.4 -2.0 2.5 2.6 -0.3 -8.6 -1.5 -6.1 -4.2 -0.3 -1.7 1.2 2.4 551.9 . 24.5 17.4 38.6 133.1 33.0 186.9 118.4 3.8 1.5 1.4 0.3 $BMJGPSOJB Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 14,647.0 23.6 751.3 1,784.5 713.4 3,371.7 850.9 4,679.5 2,472.1 -0.9 5.2 -2.8 -6.3 -2.5 -0.4 3.4 -1.0 2.6 -0.4 5.3 -2.9 -4.9 -2.0 0.1 4.1 0.7 -0.3 -0.1 -2.3 -1.4 -3.5 -3.1 1.2 0.0 -0.2 2.4 0.0 -2.5 -1.1 -3.4 -3.1 1.0 0.0 0.1 2.4 6OFNQMPZNFOU3BUFT )BXBJJ Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government Total Employed (thousands) Nov-02 . 10.3 -12.8 -3.1 3.7 0.0 1.3 13.0 . -1.6 -6.6 -5.0 2.4 -1.2 3.9 1.4 . . 2.5 -2.0 0.9 0.6 0.7 2.2 1.6 5.2 -1.7 -5.9 -0.8 0.3 1.2 1.8 Arizona Hawaii U.S. California Oct-02 Sep-02 Aug-02 Jul-02 Oct-01 5.7 4.0 5.7 5.7 4.2 5.6 5.7 4.0 5.7 6.0 4.3 5.9 5.3 5.4 5.4 Nov-02 6.4 Oct-02 6.5 Aug-02 6.4 Nov-01 6.1 Sep-02 6.4 Unemployment rates are from the household employment survey; all other data are for nonagricultural payroll employment. All data are seasonally adjusted. Source: Bureau of Labor Statistics. 8 Western Economic Developments Federal Reserve Bank of San Francisco December 2002 Residential permits—October 2002 3-mo. average number Arizona California Hawaii Metro area office vacancy rates Moving average percent change 3-mo.a 12-mo.a 5,818.6 14,663.6 544.7 3.2 21.8 19.1 5.6 6.7 6.3 Percent 25 20 Phoenix Los Angeles - Long Beach Honolulu 15 Source: Bureau of the Census. Non-residential construction awards—October 2002 10 Moving average percent change 3-mo.a 12-mo.a 3-mo. average $ millions Arizona California Hawaii a 264.7 1,263.3 15.2 -22.5 -3.9 -39.3 -16.9 -22.5 -18.2 Underlying data are seasonally adjusted moving averages. San Francisco 5 0 Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Source: Torto Wheaton Research. Source: F.W. Dodge. Sales of existing homes (percent change over year earlier) Percent 40 Metro area office gross rents (percent change over year earlier) 80 HI San Francisco 30 60 20 40 Los Angeles - Long Beach 20 10 AZ 0 0 Phoenix -20 CA -10 -40 -20 Sep-98 -60 Sep-99 Sep-00 Sep-01 Sep-02 Source: National Association of Realtors. Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Source: Torto Wheaton Research. Export update Home price index (percent change over year earlier) 30 San Francisco 25 12 - month Percent Change $ billions 2001 September* 2000 2001 Arizona 11.1 7.9 19.0 -15.6 -8.5 California 90.7 58.2 19.5 -10.2 -16.9 Hawaii 0.3 0.3 33.4 8.8 32.6 20 September* 15 Los Angeles- Long Beach 10 5 0 -5 Honolulu Phoenix-Mesa * Indicate year-to-date values. -10 Sep-98 Sep-99 Sep-00 Source: Office of Federal Housing Enterprise Oversight. Sep-01 Sep-02 Source: Census FT900 Supplement, Origin of Movement Series. Western Economic Developments December 2002 Federal Reserve Bank of San Francisco 9 STATE HIGHLIGHTS Idaho • Nevada • Utah Nonagricultural payroll employment by state (percent change over year earlier) Nonagricultural payroll employment by MSA (percent change over year earlier) 10 8 Las Vegas 7 NV 8 6 5 6 ID 4 Boise 4 3 UT 2 2 1 U.S. 0 0 -1 -2 Salt Lake City -2 -4 -3 Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Source: Bureau of Labor Statistics. Source: Bureau of Labor Statistics. Employment by Industry Total Employed (thousands) Oct-02 1-mo.a Percent Change 3-mo.a YTDa Total Employed (thousands) Oct-02 12-mo. *EBIP 1-mo.a Percent Change 3-mo.a YTD a 12-mo. 6UBI Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 563.1 1.8 33.6 71.5 27.1 140.1 24.7 153.3 111.0 -0.2 98.6 -3.5 3.4 0.0 -3.4 0.0 4.0 -4.2 -2.0 25.7 -13.1 6.4 -4.3 -1.4 -3.2 1.3 -8.2 -1.2 7.1 -11.8 -1.8 -3.0 0.6 0.0 0.1 -1.3 -1.2 -10.0 -9.9 -3.4 -2.5 -0.1 0.8 0.9 -0.8 1,076.8 8.8 93.6 46.3 57.8 227.3 51.9 458.9 132.2 9.4 -23.6 3.9 5.3 13.3 0.0 0.0 14.0 21.2 2.3 -8.6 1.3 1.7 2.8 -0.2 1.6 2.8 6.3 3.1 -9.9 4.7 1.6 2.8 2.9 4.3 3.0 3.9 2.9 -10.2 3.7 1.1 2.1 2.4 3.4 3.3 3.7 Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 1.1 18.3 -1.8 -4.9 4.3 -2.9 -2.0 9.6 -2.4 -0.6 0.0 -3.6 0.0 -0.7 -0.7 0.0 -2.9 3.6 -1.2 -7.7 -9.7 -3.0 -2.1 -1.1 -1.6 0.0 2.1 -1.5 -7.7 -9.8 -4.0 -3.9 -1.8 -1.3 0.0 2.4 6OFNQMPZNFOU3BUFT /FWBEB Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 1,063.4 7.2 65.0 119.9 57.4 245.1 59.3 314.1 195.4 Oct-02 Sep-02 Aug-02 Jul-02 Oct-01 Idaho Nevada Utah 5.5 4.5 5.1 5.4 4.9 5.3 5.3 5.0 5.0 5.4 5.4 5.2 5.1 6.6 4.8 U.S. 5.7 5.6 5.7 5.9 5.4 Unemployment rates are from the household employment survey; all other data are for nonagricultural payroll employment. All data are seasonally adjusted. Annualized. a Source: Bureau of Labor Statistics. 10 Western Economic Developments Federal Reserve Bank of San Francisco December 2002 Residential permits—October 2002 3-mo. average number Idaho Nevada Utah 1,179.3 2,843.1 1,584.6 Metro area office vacancy rates Moving average percent change 3-mo.a 12-mo.a 33.4 -14.8 -6.0 1.4 -6.2 7.9 Percent 25 Salt Lake City 20 Las Vegas Source: Bureau of the Census. 15 Non-residential construction awards—October 2002 3-mo. average $ millions Idaho Nevada Utah a 41.3 174.3 107.4 Moving average percent change 3-mo.a 12-mo.a -22.2 8.3 -22.5 -16.4 -1.7 5.8 Underlying data are seasonally adjusted moving averages. 10 5 0 Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Source: Torto Wheaton Research. Source: F.W. Dodge. Sales of existing homes (percent change over year earlier) Percent 40 Metro area office gross rents (percent change over year earlier) 15 Salt Lake City NV 30 10 20 5 UT 10 0 0 ID -10 -5 -20 -10 Las Vegas Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Source: National Association of Realtors. Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Source: Torto Wheaton Research. Export update Home price index (percent change over year earlier) 9 12 - month Percent Change 8 $ billions Las Vegas 7 2001 September* Idaho 1.9 1.2 53.6 -41.7 -23.0 Nevada 1.1 0.7 21.8 13.9 -11.4 Utah 3.4 3.1 1.7 9.3 24.4 6 5 2000 2001 September* Salt Lake City 4 Boise 3 2 1 0 -1 * Indicate year-to-date values. -2 Sep-98 Sep-99 Sep-00 Source: Office of Federal Housing Enterprise Oversight. Sep-01 Sep-02 Source: Census FT900 Supplement, Origin of Movement Series. Western Economic Developments December 2002 Federal Reserve Bank of San Francisco 11 2002 Issues March ○ ○ ○ ○ June ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ September ○ ○ ○ ○ ○ ○ ○ ○ December ○ ○ ○ ○ Mailing Dates ○ ○ ○ ○ March 26 ○ ○ ○ ○ July 2 ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ October 4 ○ ○ ○ ○ ○ ○ ○ ○ December 20 ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ Four additional updates to statistical charts are available online during interim periods at http://www.frbsf.org/publications/economics/wed/index.html Western Economic Developments is produced quarterly by the Financial and Regional Studies Section of the Economic Research Department of the Federal Reserve Bank of San Francisco. The publication is managed by Mary Daly and edited by Anita Todd with contributions by Lily Hsueh, Geoffrey MacDonald, Rob Valletta, and Jackie Yuen of the Economic Research Department. The analyses represent the views of the staff and do not reflect the official views of the senior bank management of the Federal Reserve Bank of San Francisco or the Federal Reserve System. Western Economic Developments is distributed by the Public Information Department, (415) 974-3230. This publication is available on our website, http://www.frbsf.org. Federal Reserve Bank of San Francisco 101 Market Street San Francisco, California 94105 Address Service Requested PRESORTED FIRST-CLASS MAIL U.S. POSTAGE PAID PERMIT NO. 752 San Francisco, CA