By Wes Foster, CEO Long & Foster Companies
Dr. Steve Fuller, Economist at George Mason University says “The payroll job loss as likely to go deeper and longer – perhaps 18-20 months. There are currently 13 million unemployed, and many of these people will stay unemployed because the new jobs will have different qualifications than those for the people getting laid off. He predicted oil will still be below $80 per bbl in 2011. Normally there are 5 million house sales per year (it got up to 7 million a few years ago), and we are currently around 4.5 million now. Consumer spending will be a negative 1% in 2009 vs the normal 2.5% growth per year.
The Washington economy will have a 1.5% growth in GDP vs the negative nationally due the presence of the federal government. Where Detroit has autos; LA, films; Houston, oil; a third of our economy is directly tied into the feds, and that component is rising. Federal spending here will total some $135 billion in 2009. Federal procurement dollars have tripled over the last 10 years with much of the corresponding job growth going to Northern VA.
Job growth has averaged 46,500 per year since 1991 with some recent years as follows:
- 2003 – 56,000
- 2004 – 71,000
- 2005 – 63,000
- 2007 – 29,000
- 2008 – With one more month’s numbers to come in, he thinks it will net out at 25,000
Washington is double the national job growth rate in professional and business services which have an annual salary of $75,000. Due to the region’s wealth, our retail trade job growth is 3 times the national average, and other services (such as daycare, etc.) twice.
Steve sees the spread between our unemployment rate and the national rate (now 3%) perhaps growing to a 4% spread. He thinks our economy will begin to rebound the second half of 2009 with a total net new job growth of 230,300 for the region over the next 5 years as follows:
- 2009 – 23,700
- 2010 – 36,500
- 2011 – 42,400
- 2012 – 48,100
- 2013 – 54,000
Of these new jobs, Northern VA will have 125,900 and Suburban MD, 66,000.
Needless to say, we are very fortunate to be living and working in this area for a number of reasons. Let us hope we can take advantage of the opportunities that may be more evident and attainable here than in many other markets.