The Strome College of Business and the University con9nue to provide - PowerPoint PPT Presentation

The Strome College of Business and the University con9nue to provide important support for this report. However, it would not appear without the vital backing of these donors, who believe in the power of ra9onal discourse to improve our circumstances. The Aimee and Frank BaCen, Jr. Founda9on Thomas Lyons Anonymous Donor Patricia W. and J. Douglas Perry Jane BaCen Virginia Chamber of Commerce R. Bruce Bradley Virginia Department of Richard T. Cheng Commerce and Trade Patricia W. and J. Douglas Perry Arthur A. Diamonstein George Dragas Jr. Edward L. Hamm, Jr. Hampton Roads Chamber of Commerce

The views expressed in the report do not represent official positions on the part of Old Dominion University, President John Broderick, the Old Dominion University Board of Visitors, or any of the generous donors.

Comparing Real Rates of Economic Growth, AMer Infla9on [VALUE]% 5 U.S . 4 [VALUE]% 3 Growth Rate 2 1 1.10% 0 Percent change real GDP -1 [VALUE]% Percent change real GRP Hampton Roads -2 -3 -2.78% -4 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f

Gross Regional Product (GRP), Hampton Roads, 2005-2015 (Billions of $$) Price-Adjusted Real Year Rate Nominal GDP Real GDP Growth GDP (2009=100) 2005 $70.44 $77.72 4.04% 2006 $74.95 $80.12 3.09% 2007 $78.94 $81.94 2.28% 2008 $80.18 $81.59 -0.43% 2009 $82.14 $82.14 0.67% 2010 $83.12 $82.08 -0.08% 2011 $84.66 $82.55 0.57% 2012 $87.36 $83.41 1.04% 2013 $89.05 $83.55 0.17% 2014 $90.77 $83.43 -0.14% 2015 $93.29 $84.35 1.10%

Yes, our real regional GDP actually shrank by 0.1% in 2014 and we think it will grow at only 1.10% in 2015. How did we get to this point? Why has our economic growth been so slow? Vinod Agarwal will supply details.

Caps on Department of Defense Discre9onary Spending, FY 2012 to FY 2021 The legislated cap on spending increased by only $0.8B (0.15%) for FY 2015 and is expected to increase further by only $1.8B (0.35%) during FY 2016 700 650 600 Billions of dollars 550 500 450 400 350 300 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 BCA 2011 Sequestra9on BBA 2013 8 Source: BCA2011,Budget Requests for FY14, CBO Sequestra=on Update Report and the Old Dominion University Economic Forecas=ng Project.

Es9mated Direct DOD Spending in Hampton Roads: 2000 to 2015 Between 2000 and 2012, DOD spending in our region increased by an average of 5.6% annually. But, in 2015, it will be about 3.2% lower than its peak in 2012. 25 19.27 19.32 18.35 18.80 18.70 20 Billions of $ 15 10.00 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e 2015f 9 Source: U.S. Department of Defense and the Old Dominion University Economic Forecas=ng Project. *Includes Federal Civilian and Military Personnel and Procurement

Hampton Roads Gross Regional Product ACributable to DOD Spending 49.5% 48.8% 50% 44.9% 40.3% 39.3% 40% 32.8% 30% 20% 10% 0% 10

Recession Recovery in the U.S,. Virginia and Hampton Roads Measured by Total Jobs Restored, 2007-2015* Month AMer Pre-Recession Peak 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105 4% Pre-Recession Peak Dates: U.S. Decline from Pre-Recession Peak U.S.: January, 2008 2% Virginia: April, 2008 Virginia Hampton Roads: July, 2007 0% -2% Hampton -4% Roads -6% -8% USA VA Hampton Roads Source: Bureau of Labor Sta=s=cs and Old Dominion University Economic Forecas=ng Project. *Data for Virginia and Hampton Roads are through August 2015

Annual Civilian Employment (Jobs) in Hampton Roads: 1999 to 2015 The HR economy added only 1,100 jobs in 2014. At the end of December 2014, we were s9ll about 22,000 jobs below our pre- recession level. 800 775.1 775 761.0 767.4 766.1 Employment in thousands 760.1 752.2 753.3 749.9 740.5 734.8 737.2 743.3 750 730.5 733.8 737.5 720.2 725 706.6 700 675 650 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f Source: U.S. Department of Labor CES data and the Old Dominion University Economic Forecas=ng Project. Not seasonally adjusted.

Annual Private Sector Civilian Employment (JOBS) in Hampton Roads: 1990 to 2014 Our Compound Annual Growth Rate (CAGR) in the private sector jobs was 2.54 percent from 1991 to 2000; it was 1.1 percent from 2000 to 2007; it has been NEGATIVE 0.5 percent since 2007. 650 619.9 598.1 600 Employment in thousands 574.2 550 500 458.2 450 400 Source: U.S. Department of Labor CES data and the Old Dominion University Economic Forecas=ng Project. Not seasonally adjusted. 13

Hotel Revenue in Hampton Roads, 1996-2015 (millions of $$) 800 727.7 714.4 700 600 500 400 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f 14 Source: Smith Travel Research Trend Report, January 21, 2015 and the Old Dominion University Economic Forecas=ng Project.

Es9mated Hotel Market Shares within Hampton Roads as Indicated by Industry Revenues, 1999 and 2014 2014 1999 Norf/Port Norf/Port 13.2% 14.6% Va Beach 33.2% Va Beach Hamp/Nnews Hamp/Nnews 41.3% 15.3% 13.7% Ches/Suff Ches/Suff 7.0% Wmburg 12.5% 31.5% Wmburg 17.6% 15 Source: Smith Travel Research Trend Report, January 21, 2015 and the Old Dominion University Economic Forecas=ng Project.

REVPAR in Selected Markets: 2007 and 2014 2007 2014 Percent Change USA $65.54 $74.28 +13.3% Virginia $61.95 $59.42 -4.1% Hampton Roads $52.90 $49.30 -6.8% Myrtle Beach $54.07 $64.12 + 18.7% Coastal Carolina $55.83 $61.22 + 9.7% Ocean City $71.74 $72.38 +0.9% Virginia Beach $64.64 $67.22 + 3.9% Newport News/Hampton $41.49 $37.69 -9.2% Norfolk/Portsmouth $54.05 $47.48 -12.2% Williamsburg $47.53 $39.81 -16.2% Chesapeake/Suffolk $52.90 $43.78 - 17.2% 16 Source: Smith Travel Research Trend Report January 21, 2015 and the Old Dominion University Economic Forecas=ng Project

Residen9al Housing

Median Sale Price of Exis9ng Residen9al Homes in Hampton Roads, 2000-2015* Year Median Price Percent change year to year 2002 $116,900 7.3% 2003 $130,000 11.2% 2004 $156,500 20.4% 2005 $192,000 22.7% 2006 $214,900 11.9% 90% increase 2007 $223,000 3.8% from 2002-07 2008 $219,000 -1.8% 2009 $207,000 -5.5% 19% decrease 2010 $203,900 -1.5% from 2007-11 2011 $180,000 -11.7% 2012 $185,000 +2.78% 2013 $190,000 +2.70% 2014 $193,205 +1.70% 18 2015 $204,900 +6.49% YTD

Number of Exis9ng Short Sale and REOs Residen9al Homes Sold in Hampton Roads from 2006 to 2015* Percent Short Percent REO Year All Sales Short Sales REO Sales Sales Sales 2006 22,405 3 <1% 56 <1% 2007 19,152 40 <1% 223 1.2 2008 15,047 217 1.4 833 5.5 2009 15,849 598 3.8 2,271 14.3 2010 14,696 784 5.3 3,021 20.6 2011 15,817 1,127 7.1 4,213 26.6 2012 16,856 1,644 9.8 3,337 19.8 2013 18,791 1,769 9.4 3,178 16.9 2014 18,700 1,347 7.2 2,744 14.7 2015* 13,813 867 6.3 1,764 12.8 Source: Real Estate Informa=on Network and Old Dominion University Economic Forecas=ng Project. Informa=on Deemed Reliable But not Guaranteed. 19 * Data for 2015 is through August 2015.

Median Price of Exis9ng Short Sale, REOs, and Non-Distressed Residen9al Homes Sold in Hampton Roads, 2006 to 2015 Short Sales Price Non-Distressed REO Price % Non- Year Short Sales % Non-Distressed REO Sales Sales Distressed Sales Price 2006 $214,900 $230,000 107.0 $ 82,500 38.4 2007 $224,000 $239,950 107.1 $140,000 62.5 2008 $220,000 $215,000 97.7 $160,500 73.0 2009 $215,000 $215,000 100.0 $150,000 69.8 2010 $220,000 $208,000 94.6 $133,000 60.5 2011 $205,000 $190,000 92.7 $115,000 56.1 2012 $208,000 $167,250 80.4 $110,000 52.9 2013 $213,000 $160,000 75.1 $109,625 51.5 2014 $214,000 $152,580 71.3 $106,000 49.5 2015 $221,450 $152,950 69.1 $110,000 51.9 20

Number of Ac9ve Lis9ng of Distressed Homes (REO & Short Sales) in Hampton Roads, June 2008 – August 2015 3,500 3,224 3,000 2,500 2,000 1,631 1,500 1,000 500 0 21 Source: Real Estate Informa=on Network (REIN) and the Old Dominion University Economic Forecas=ng Project.

Performance of the Hampton Roads Economy: YTD July 2014 and YTD July 2015 YTD July YTD July % Change 2014 2015 Civilian Labor Force* 848,326 842,449 -0.69 Employment* 798,569 797,740 -0.10 Unemployment* 49,756 44,709 -10.14 Unemployment Rate* 5.87% 5.31% 751,575 +0.78 Civilian Non-Farm Jobs* 757,425 Number of Jobs added since previous 1,000 2,400 December* 47,636 +7.43 New Auto Registra9ons 51,176 $11.91B Taxable Sales $12.33B +3.53 22

Addi9onal Measures of the Performance of Hampton Roads Economy YTD July 2014 and YTD July 2015 YTD July YTD July % Change 2014 2015 Hotel Revenue* $518.05M $542.91M + 4.80 General Cargo Tonnage* 12.21M 13.56M +11.05 TEU Containers* 1,558,781 1,699,773 + 9.05 Number of 1 Unit Housing Permits* 2,614 2,883 +10.29 $538.58M +13.68 Value of 1 Unit Housing Permits* $612.27M 12,412 +11.29 Number of Exis9ng Homes Sold* 13,813 Distressed Homes as a percentage of all Exis9ng 22.67 19.05 Homes Sold* $192,500 Median Price of Exis9ng Homes Sold* $204,990 + 6.49 23