Full text of Western Economic Developments : June 2002
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FEDERAL RESERVE BANK OF SAN FRANCISCO Western Economic Developments Consumers keep home prices rising throughout the West Figure 1: Nominal home price appreciation (percent change over year earlier) 12 2001: December 2002: March 10 8 6 4 2 0 US 12th* AK AZ CA HI ID NV OR UT WA *Employment-weighted average. Note: Figure reflects changes in prices on repeat sales of existing homes. Source: Office of Federal Housing Enterprise Oversight. Consumer spending has been the primary driver of recovery in the West, fueling growth in retail trade, travel and tourism, and many service-producing industries. Nowhere is the resilience of consumers as apparent as in Western housing markets. Data through the first quarter show nominal home prices and home sales rising relative to a year earlier in most Twelfth Federal Reserve District states (Figures 1 and 2). In the first quarter, District home prices rose 5.7% and home sales increased by 11% on a year-over-year basis, about the same as the nation. Housing markets have been especially strong in California, with home prices increasing 7.4% and home sales rising 20%. Elsewhere in the District, nominal price appreciation during the first quarter ranged from 6.1% in Hawaii to 1.9% in Utah. While these appreciation rates are below those recorded in 2001, they remain high relative to previous periods of economic slowing. In contrast to the fourth quarter of 2001, home sales have increased in most District states this year, with only Idaho and Utah recording year-over-year declines in home sales in the first quarter. The sustained strength of housing demand in the West has begun to spur new building. Except for Alaska, Nevada, and Utah, all District states showed increases in residential permits on a three-month Figure 2: Change in home sales (percent change over year earlier) 30 2001: December JUNE 2002 2002: March 25 15 10 5 0 -5 -10 US 12th AK AZ CA Source: National Association of Realtors. HI ID NV OR UT WA IN THIS ISSUE 20 Signs of life in District IT ............................................................................. 3 Employment growth remains lackluster ............................................... 4 High-tech Watch ........................................................................................... 5 STATE HIGHLIGHTS Alaska, Oregon, Washington .................................................................. 6 Arizona, California, Hawaii ...................................................................... 8 Idaho, Nevada, Utah ............................................................................... 10 average basis in April.1 The pickup in home building is a boost to the construction industry, which has seen a sharp drop-off in demand for commercial development. Housing market fundamentals An important question going forward is what will happen to home prices. One concern is that the runup in real estate values has pushed prices to unsustainable levels, leaving owners open to large changes in wealth should home prices correct. While it is difficult to know the extent to which these concerns are warranted, it is possible to assess the risk of such a decline in the District relative to the rest of the U.S. based on trends in home price appreciation, residential permits, and jobs-to-housing ratios. Figures 3 and 4 show trends in the OFHEO home price index and in residential permits, respectively, for California, the Twelfth District less California, and the U.S.2 The series are indexed to 100 in 1991:Q1. As Figure 3 shows, over the course of the 1990s expansion, home price appreciation in the District outside of California generally outpaced price appreciation in the nation. Between 1991:Q1 and 2002:Q1 home prices in the District outside of California rose by 69%; prices rose by 57% in the nation over the Figure 3: OFHEO home price index 1991 = 100 same time period. In contrast, home price appreciation in California lagged significantly, tempered by the deep recession in the early 1990s. As California began to expand in the latter half of the 1990s, home price appreciation rose sharply. However, over the entire U.S. expansion, home prices in California rose less than those in other parts of the nation. Home prices in California rose by 41% between 1991 and 2002. The experience in California in the 1990s contrasts with that during the 1980s expansion, when home price appreciation in the state outpaced that of the rest of the District and the nation. Trends in home building activity during the latest expansion reflected the relative strength of housing markets in all three regions (Figure 4). Growth in residential permits in the District (less California) and the nation was similar, with permits in both areas increasing at a more rapid pace than in California. Residential permit growth lagged noticeably in California but increased with home prices as the state began to recover. To get a sense of how the relative balance of housing supply (measured by permits) and housing demand (measured by employment growth) evolved in these areas over the 1990s, Table 1 reports the average jobs-to-housing ratio over three periods: 1991–2000, 1995–2000, and 1991– 2002. The jobs-to-housing ratio is computed as changes in payroll employment relative to housing permits.3 Regional 180 160 Figure 4: Residential building permits 12th District - CA 140 120 1991 = 100 350 US 100 300 80 CA 250 12th District - CA 60 200 40 150 20 0 Mar-83 100 Mar-87 Mar-91 Mar-95 Mar-99 Mar-02 50 US CA Source: Office of Federal Housing Enterprise Oversight. 0 Mar-83 1 Nominal home price appreciation for major District MSAs are displayed in the State Highlights section, pp. 6-11. 2 Home price appreciation for the District less California is a weighted average of home price appreciation in Alaska, Arizona, Hawaii, Idaho, Nevada, Oregon, Utah, and Washington with the weights equal to state employment shares. 2 Mar-87 Mar-91 Mar-95 Mar-99 Mar-02 Source: Census Bureau. 3 Data from the Census Bureau on population and household size show no significant change in the number of persons per household over the period examined. Western Economic Developments Federal Reserve Bank of San Francisco June 2002 Signs of life in District IT Table 1: Jobs-to-housing ratio 1991 - 2000 1995 - 2000 1991 - 2002 US 1.37 1.51 1.13 12th - CA 1.51 1.52 1.25 CA 1.99 3.56 1.73 Note: 2002 data current through April. Source: Bureau of Labor Statistics, Census Bureau. planners generally consider 1.5 to be a target jobs-to-housing ratio. As the table shows, building activity in the District outside of California closely follows that for the U.S. as a whole. Between 1991 and 2000, the District excluding California averaged 1.5 jobs per every new housing permit issued, only slightly above that for the nation and right on the 1.5 ratio. As the economy has slowed, the jobs-to-housing ratio in the District less California has fallen (the ratio for 1991–2002 is 1.25) but remains in line with the nation. The experience in California has been far different, with building activity relative to job growth proceeding at a far slower pace than the rest of the nation during the 1990s expansion. Between 1991 and 2000, California averaged 2 jobs per new housing permit issued, well above the national ratio. Between 1995 and 2000, the jobs-to-housing ratio in the state rose to 3.6, more than twice that for the U.S. and the rest of the District. The growth in the jobs-tohousing ratio in California during this period is consistent with the acceleration in home price appreciation in the state observed in Figure 3. As the economy has slowed the jobsto-housing ratio in California has come down slightly but remains higher than for the rest of the District and the nation. Overall, the trends in home price appreciation, residential permits, and the jobs-to-housing ratios suggest that the District is no more vulnerable to a retracing of residential real estate prices than is the rest of the nation. Supply appears to be in check in the District outside of California, with residential permit growth moderating as home price appreciation slows. In California, a relative backlog of demand (represented by a high jobs-to-housing ratio) should work to keep housing markets in the state tight in coming quarters. Job losses in high-tech manufacturing and computer and data processing services continued in recent months. Still, there are signs that conditions among information technology firms are stabilizing and even improving in some areas. Strong demand for personal computers and consumer electronics as well as a pickup in business investment in IT products (see High-tech Watch) boosted orders and sales among manufacturers of computers, semiconductors, and semiconductor equipment in recent months. According to the Semiconductor Association of America (SIA), sales of semiconductors increased 18.9% at an annual rate over the three months ending in April, with particularly strong sales to Asia Pacific nations other than Japan. Orders for computers and office equipment also increased in March, and the pace of decline in shipments eased substantially. An improved outlook among makers of semiconductors has begun to boost demand among makers of semiconductor manufacturing equipment. Data from SEMI (Semiconductor Equipment and Materials International) announced that their book-to-bill ratio (value of new orders relative to value of new shipments) rose to 1.20 in April, up from a low of 0.62 in August 2001. April marks the second consecutive month of a book-to-bill higher than one. Industry experts from SEMI noted in a June press release that recent announcements by leading foundries regarding capital spending plans for 2002 were strong relative to expectations. Separate information from Compustat on sales by high-tech manufacturing and software firms headquartered in the District supports the trends observed in national figures.4 Overall, sales growth among District makers of semiconductors and computers has outpaced sales growth among communications equipment makers and software developers. Moreover, expenditures on research and development stabilized in the first quarter of 2002, following nearly a year of continuous declines. Finally, recent earnings announcements by a number of leading IT firms suggest that, outside of the telecommunications sector, profits have begun to stabilize. Consistent with improved sales of IT products, capacity utilization among high-tech manufacturers in the nation increased in recent months. As of April, capacity utilization 4 Compustat data include all publicly traded firms. Information technology firms were selected by SIC codes as defined by the American Electronics Association. Western Economic Developments June 2002 Federal Reserve Bank of San Francisco 3 for computer, electronics, and communications equipment makers was 63.4%. At its low point capacity utilization was 59%.5 Detailed data for California show that utilization of labor also has increased in recent months. In April, weekly work hours in electronics and computer manufacturing averaged 42.4, about the same as the peak in December 2000. In contrast, work hours among makers of communications equipment remained well below prior levels. Although the sales outlook for District IT firms has improved in recent months, it is not clear when IT employment will expand. Pricing pressure continues to restrain earnings growth and, like other businesses in the District, makers of IT products cite cost-cutting efforts and caution regarding the outlook as reasons for holding employment steady. In addition, District contacts report that some IT sectors are in the process of restructuring, including shifting production and support functions offshore and permanently outsourcing specific tasks. In some cases this has meant plant closures in District states.6 Employment growth remains lackluster Payroll employment in the District was little changed in May, leaving District payrolls for the first five months of 2002 up just 0.1% at an annual rate (Figure 5). In the rest of the U.S., employment declined slightly (-0.3% at an annual rate) over the same period. The very modest job gains likely understate output growth in the District. Reports from Beige Book contacts indicate that producers remain reluctant to hire new workers despite increased demand, waiting for signs of sustained recovery. Moreover, firms reportedly are working hard to increase efficiency in order to improve profits and remain competitive against increased import competition. Within the District, only Hawaii, Nevada, and Oregon posted positive job growth for the five months ending in May. While job losses have attenuated relative to the fourth quarter in the remaining District states, the picture still is one of weakness in employment growth. The durable manufacturing, construction, and transportation, communications, and public utilities (TCPU) sectors continued to shed jobs in May. Payroll reductions in high5 At its peak in May 2000, capacity utilization hovered near 88%. Over the 1990s expansion, capacity utilization averaged 82% among high-tech manufacturers. 6 Three plants making printers, laptops, and flat screens reportedly closed in Oregon in recent months. 4 Figure 5:Total nonagricultural employment (annualized percent change) 8 2001: Q4 6 NV 2002: through May 4 HI 2 US - 12th AK AZ CA ID OR UT WA 0 -2 12th -4 -6 -8 Source: Bureau of Labor Statistics. tech manufacturing and aerospace depressed job growth in durable manufacturing. Job losses in construction owed to a number of factors including the end of Olympics-related building in Utah, weakness in commercial office markets throughout the District, and slowing in public works projects funded by state government. TCPU employment reductions were broad-based, occurring in air transportation, railroads, trucking and warehousing, and communications. Water transportation employment fell in Washington but rose rapidly in California. Job cuts also were recorded in the finance, insurance, and real estate sectors and in business services, which likely will put additional pressure on already weakened commercial real estate markets. More detailed data for California and Washington indicate that job cuts among computer and data processing firms continued to be a drag on business services employment. As in past months, positive job growth was limited to consumer-based sectors including trade and personal services. Average unemployment in the District was 6.2% in May, down 0.1 percentage point since December. Within the District, unemployment rates have fallen in seven of nine states since the end of 2001. The stability of the unemployment rate in part reflects a divergence in the household employment series (used to calculate the unemployment rate) and the payroll employment series, with the household series showing faster employment growth. Contributions by Mary Daly, Financial and Regional Studies, Economic Research Department, FRBSF Western Economic Developments Federal Reserve Bank of San Francisco June 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) Employment Payroll U.S. - 12th 12th 50 40 AK 30 AZ Year-over-year CA 20 HI 10 ID NV 0 OR -10 UT 3 months prior* -20 WA 0 2 4 6 8 10 12 14 16 18 Percent share Source: Bureau of Labor Statistics. -30 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 *Annualized values Source: Bureau of Economic Analysis. Monthly semiconductor sales by U.S. firms (percent change in 3-month moving averages) Shipments of computers and related products by U.S. firms (percent change in 3-month moving averages) 60 120 100 3 months prior* 3 months prior* 40 80 Year-over-year 60 Year-over-year 20 40 0 20 0 -20 -20 -40 -40 -60 -60 -80 Apr-97 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 *Annualized values Source: Semiconductor Industry Association. Shipments of communications equipment by U.S. firms (percent change in 3-month moving averages) 80 Apr-98 30 25 60 Apr-00 Apr-01 Apr-02 *Annualized values High-tech job growth (percent change over year earlier) Computer & Data Processing Services (WA) 20 3 months prior* 15 40 Communications Equipment (CA) 10 Year-over-year 20 5 0 0 -5 -20 -10 -40 Electronic Components & Accessories (CA) -15 Computer & Office Equipment (CA, OR, WA) -20 -60 Apr-98 Apr-99 Source: Bureau of the Census. Apr-99 Source: Bureau of the Census. Apr-00 Apr-01 Apr-02 *Annualized values May-98 May-99 May-00 May-01 May-02 Source: Bureau of Labor Statistics. Western Economic Developments June 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 6 WA 5 3 U.S. Anchorage 4 AK 3 2 2 OR 1 1 Portland-Vancouver 0 0 -1 -2 -1 -3 -4 -2 -5 Seattle-Bellevue-Everett -3 -6 May-98 May-99 May-00 May-01 May-02 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 Source: Bureau of Labor Statistics. Source: Bureau of Labor Statistics. Employment by Industry "MBTLB Total Employed (thousands) May-02 Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government a 1-mo. Percent Change a a 3-mo. YTD 12-mo. 291.0 10.5 14.9 12.2 27.9 58.6 12.9 74.4 79.6 1.7 -10.8 -21.3 65.2 -12.0 4.2 -8.9 12.0 -3.0 -2.4 0.0 -2.6 -31.3 -4.2 -3.3 3.2 2.7 -1.5 -0.3 2.3 1.6 -17.2 -1.7 -0.8 0.0 2.3 0.3 0.8 -11.0 1.4 -6.9 -0.4 1.2 0.8 2.8 2.2 1,581.2 1.6 73.0 225.9 77.8 390.2 95.9 444.8 272.0 3.6 0.0 -22.9 11.3 8.0 3.1 2.5 3.9 5.0 0.9 0.0 -8.3 2.9 -4.5 3.3 -0.8 0.4 1.6 0.2 -13.5 -5.1 -2.6 -0.6 1.4 1.8 0.0 2.2 -1.4 -11.1 -9.3 -5.4 -2.4 -0.3 1.4 -0.6 0.8 8BTIJOHUPO Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 0SFHPO Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government Total Employed (thousands) May-02 2,650.5 3.1 144.2 314.2 137.4 624.6 143.7 766.9 516.4 a 1-mo. 1.0 48.2 19.2 1.9 -5.1 -3.6 -3.3 3.7 0.2 Percent Change a a 3-mo. YTD -1.3 -11.9 -3.3 -2.0 -9.3 -2.0 -2.2 0.3 0.7 12-mo. -0.5 -7.3 -3.6 -4.9 -6.0 0.1 -0.3 0.8 2.4 -2.2 -8.8 -7.9 -8.2 -7.5 -2.1 2.8 -1.6 2.5 6OFNQMPZNFOU3BUFT May-02 Apr-02 Mar-02 Feb-02 May-01 Alaska Oregon Washington 6.0 7.3 7.1 6.6 7.5 7.2 6.3 7.9 6.8 5.7 8.1 7.0 6.3 6.0 6.1 U.S. 5.8 6.0 5.7 5.5 4.4 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 June 2002 Residential permits—April 2002 3-mo. average number Alaska Oregon Washington Metro area office vacancy rates Moving average percent change 12-mo.a 3-mo.a 262.5 1,818.4 3,127.9 -6.2 8.5 4.1 27.5 3.1 -10.7 Percent 18 16 14 12 Source: Bureau of the Census. Non-residential construction awards—April 2002 Moving average percent change 12-mo.a 3-mo.a 3-mo. average $ millions Alaska Oregon Washington a 58.6 168.9 213.6 21.7 29.2 -41.4 2.4 -14.3 -32.5 Portland 10 8 6 Seattle 4 2 0 Mar-98 Underlying data are seasonally adjusted moving averages. Mar-99 Mar-00 Mar-01 Mar-02 Source: Torto Wheaton Research. Source: F.W. Dodge. Sales of existing homes (percent change over year earlier) Percent 25 80 20 Portland WA 60 15 Seattle 40 10 OR 5 20 0 0 -5 -20 -10 -40 -15 Mar-98 Metro area office net rents (percent change over year earlier) -60 Mar-99 Mar-00 Mar-01 Mar-02 Source: National Association of Realtors. Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Source: Torto Wheaton Research. Export update Home price index (percent change over year earlier) 12 Seattle-Bellevue-Everett 12 - month Percent Change $ billions 10 2001 April* 2000 2001 April* Alaska 2.4 0.8 -5.6 -2.0 4.0 4 Oregon 8.0 2.7 6.6 -24.0 -6.2 2 Washington 33.9 11.2 -13.1 8.5 -7.4 8 6 Portland-Vancouver * Indicate year-to-date values. 0 Mar-98 Mar-99 Mar-00 Source: Office of Federal Housing Enterprise Oversight. Mar-01 Mar-02 Source: Census FT900 Supplement, Origin of Movement Series. Western Economic Developments June 2002 Federal Reserve Bank of San Francisco 7 STATE HIGHLIGHTS Arizona • California • Hawaii Nonagricultural payroll employment by state (percent change over year earlier) Nonagricultural payroll employment by MSA (percent change over year earlier) 6 7 AZ Phoenix 5 SF Bay Area 5 4 CA 3 3 2 1 U.S. 1 0 LA-Long Beach -1 Honolulu HI -1 -3 -2 -3 -5 May-98 May-99 May-00 May-01 May-02 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 Percent Change a a 3-mo. YTD 12-mo. Source: Bureau of Labor Statistics. Source: Bureau of Labor Statistics. Employment by Industry "SJ[POB Total Employed (thousands) May-02 Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government a 1-mo. Percent Change a a 3-mo. YTD 12-mo. 2,239.6 9.0 156.2 195.2 106.1 537.0 149.3 710.5 376.3 -2.0 31.0 -3.8 -4.2 3.5 -0.4 -10.6 9.0 -18.8 -0.5 9.4 0.5 -2.0 -3.7 1.6 -4.2 3.2 -7.4 -0.8 -2.6 -5.9 -8.2 -4.8 0.8 -3.1 3.9 -3.2 -1.3 -5.3 -6.7 -8.1 -5.5 0.9 -0.9 -0.1 0.8 551.0 . 25.1 17.7 38.8 132.8 33.1 184.0 119.5 14.5 . 15.5 -6.5 0.0 1.8 11.5 -2.6 83.6 2.7 2.4 13.8 4.7 3.2 0.6 1.2 0.0 7.3 . 11.4 0.0 3.2 0.7 2.2 0.7 5.6 -0.7 . 5.0 -2.2 -10.4 -3.6 1.2 -1.6 6.6 $BMJGPSOJB Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government )BXBJJ Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government Total Employed (thousands) May-02 14,658.7 23.5 754.7 1,825.8 723.2 3,361.2 845.7 4,682.2 2,442.4 a 1-mo. -0.7 0.0 -14.1 -3.2 -1.6 -0.6 -1.7 1.9 1.2 -0.2 -8.1 -8.1 -2.9 -4.4 1.0 -1.3 1.2 2.1 0.0 -5.9 -2.0 -2.3 -3.7 1.8 -1.5 -0.2 2.3 -0.3 -2.1 -2.1 -5.0 -4.5 0.8 0.6 -0.2 3.0 6OFNQMPZNFOU3BUFT . Arizona Hawaii U.S. California May-02 Apr-02 Mar-02 Feb-02 May-01 5.7 4.2 5.8 5.7 4.3 6.0 5.9 4.6 5.7 6.0 4.7 5.5 4.4 4.3 4.4 May-02 6.3 Apr-02 6.5 Feb-02 6.2 May-01 5.1 Mar-02 6.5 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. 8 Western Economic Developments Federal Reserve Bank of San Francisco June 2002 Residential permits—April 2002 3-mo. average number Arizona California Hawaii Metro area office vacancy rates Moving average percent change 12-mo.a 3-mo.a 4,655.4 13,053.4 391.4 8.2 10.7 22.3 -4.2 -4.7 2.1 Source: Bureau of the Census. 18 Honolulu 14 12 10 Moving average percent change 12-mo.a 3-mo.a 8 $ millions Arizona California Hawaii Los Angeles Area 16 Non-residential construction awards—April 2002 3-mo. average a Percent 20 214.3 1,257.2 25.5 -4.3 -0.3 -58.5 -23.7 -15.7 25.1 Underlying data are seasonally adjusted moving averages. Phoenix San Francisco 6 4 2 0 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Source: Torto Wheaton Research. Source: F.W. Dodge. Metro area office net rents (percent change over year earlier) Sales of existing homes (percent change over year earlier) Percent 40 90 HI 30 70 San Francisco 50 Los Angeles Area 20 30 AZ 10 10 -10 0 -30 CA Phoenix -50 -10 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Source: National Association of Realtors. Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Source: Torto Wheaton Research. Export update Home price index (percent change over year earlier) 30 25 San Francisco 2001 April* 2000 2001 April* Arizona 11.1 3.3 19.0 -15.6 -19.1 California 90.7 25.5 19.5 -10.2 -23.9 Hawaii 0.3 0.1 33.4 8.8 -50.5 20 Los AngelesLong Beach 15 12 - month Percent Change $ billions 10 5 0 -5 Phoenix-Mesa Honolulu * Indicate year-to-date values. -10 Mar-98 Mar-99 Mar-00 Source: Office of Federal Housing Enterprise Oversight. Mar-01 Mar-02 Source: Census FT900 Supplement, Origin of Movement Series. Western Economic Developments June 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 3 4 UT 2 2 1 U.S. 0 0 -1 -2 -2 -3 Salt Lake City -4 May-98 May-99 May-00 May-01 May-02 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 Source: Bureau of Labor Statistics. Source: Bureau of Labor Statistics. Employment by Industry Total Employed (thousands) May-02 a 1-mo. Percent Change a a 3-mo. YTD Total Employed (thousands) May-02 12-mo. *EBIP a 1-mo. Percent Change a a 3-mo. YTD 12-mo. 6UBI Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 567.3 1.9 35.5 71.0 27.6 139.8 24.6 153.2 113.7 -5.1 279.9 -12.6 -6.5 -8.3 -6.6 -4.8 -6.8 1.1 -1.4 56.0 -4.4 -3.8 0.0 -0.6 0.0 -3.6 1.8 -0.7 30.6 -11.2 -5.2 -1.7 0.7 -1.0 0.0 3.2 -0.7 -13.6 -6.3 -6.8 -2.1 -1.6 2.5 2.1 3.0 1,073.0 9.1 93.0 45.9 57.3 227.6 51.3 458.5 130.3 5.1 0.0 10.9 0.0 11.1 1.1 4.8 3.7 12.8 4.8 -4.3 7.2 0.9 4.3 5.5 5.6 4.6 4.7 5.4 -12.0 7.9 1.1 3.4 6.3 5.8 5.9 4.2 1.5 -10.8 4.0 -1.7 -3.5 3.1 4.5 0.6 3.4 Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government /FWBEB Total Mining Construction Manufacturing T.C.P.U. Trade F.I.R.E. Services Government 1,067.0 7.7 63.1 119.5 58.5 247.6 59.7 319.5 191.4 -2.4 0.0 -27.3 -4.9 -4.0 -4.3 -2.0 2.3 3.8 -4.7 0.0 -7.3 -7.6 -7.8 -5.5 -3.9 -5.7 1.5 -1.5 0.0 -24.1 -6.7 0.4 0.2 -1.6 4.1 -0.9 -1.7 -2.5 -10.1 -6.3 -4.1 -1.9 -0.2 0.9 1.1 6OFNQMPZNFOU3BUFT May-02 Apr-02 Mar-02 Feb-02 May-01 Idaho Nevada Utah 5.0 5.5 5.3 5.2 5.5 5.8 5.5 5.8 6.0 5.5 6.1 5.5 4.9 4.8 4.1 U.S. 5.8 6 5.7 5.5 4.4 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 June 2002 Residential permits—April 2002 3-mo. average number Idaho Nevada Utah 919.1 2,380.7 1,500.3 Metro area office vacancy rates Moving average percent change 12-mo.a 3-mo.a 5.8 -8.6 -0.4 Percent 20 -2.7 -9.3 4.9 18 14 Source: Bureau of the Census. 12 Non-residential construction awards—April 2002 10 Moving average percent change 12-mo.a 3-mo.a 8 3-mo. average $ millions Idaho Nevada Utah a Las Vegas 16 47.6 128.8 120.9 -3.6 -40.5 -15.6 Salt Lake City 6 4 -16.3 7.1 -4.5 2 0 Mar-98 Underlying data are seasonally adjusted moving averages. Mar-99 Mar-00 Mar-01 Mar-02 Source: Torto Wheaton Research. Source: F.W. Dodge. Sales of existing homes (percent change over year earlier) 40 Percent 35 NV 30 Metro area office net rents (percent change over year earlier) 30 25 20 Salt Lake City 20 15 UT 10 10 5 0 0 -5 Las Vegas -10 -10 ID -15 -20 -20 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Source: National Association of Realtors. Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Source: Torto Wheaton Research. Export update Home price index (percent change over year earlier) 10 8 12 - month Percent Change $ billions Las Vegas Salt Lake City 2001 April* 2000 2001 April* 6 Boise 4 Idaho 1.9 0.5 53.6 -41.7 -35.5 2 Nevada 1.1 0.3 21.8 13.9 -11.3 0 Utah 3.4 1.4 1.7 9.3 22.0 * Indicate year-to-date values. -2 Mar-98 Mar-99 Mar-00 Source: Office of Federal Housing Enterprise Oversight. Mar-01 Mar-02 Source: Census FT900 Supplement, Origin of Movement Series. 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