2010 Spring Economic Forecast for the US and Greater Washington DC area

On March 25, 2010 Dr Stephen Fuller who is a “Dwight Schar Faculty Chair and Director, Center for Regional Analysis” presented his 2010 Economic Forecast for the US and the Washington DC area. The following are key points taken from Dr Fuller’s presentation on the US economy, Washington DC and with a few regional breakdowns:

• The US government is forecasting that it will take another 4 years to re-establish the employment lost due to the recession. The economy needs 3.6 MM jobs as well as 1MM new jobs each year for new workforce entrants.
• Manufacturing and construction are currently leading the economy out of recession.
• The worse hit real estate areas of the country (Las Vegas, Los Angeles & Miami) are turning around.
• Washington DC Gross Domestic Product (GDP) continued positive during the recession.
• Leading indicators for future economic growth in the DC area are extremely positive, albeit the job market being hit harder than expected with 53K jobs lost in 2009. The area still has had the least job losses in 2009 of any of the 15 major metros. Job growth in the area has seen an increasing shift as 17K new Federal government jobs were added in 2009, which has fueled the turnaround.
• Nationally, new construction hit a record low at 300K units, but expected to grow to 1MM units by 2012.
• Interest Rates are expected to gradually rise to about 5.5% until the 4th quarter when the Fed will again revise policy. If the economy continues to grow, it is expected that the Fed will raise rates and we should see 6% interest rates for 2011.
• Within the region, Northern Virginia (NV)is leading the real estate sales turnaround. Single Family home sales have been up over the past 8 months. Even Condos are seeing signs of a turnaround.
• NV economy continues to outpace DC and suburban Maryland, now accounting for 47% of overall GDP for 2009. This compares to 32% for MD and 21% for DC. Growth has been continuous over the past 40 years growing from only 27% of the regional GDP.
• New jobs are more than likely going to be filled by area newcomers as the skills and experience needed are expected to be different from those of local unemployed skilled workers. This will foster residential turnover.
• NV is poised for continued growth and has excellent prospects for the future.

The entire powerpoint presentation is below..