COVID Impacts & Economic Climate Measures
- Issuer
- Congressional materials
- Document type
- 2020 12 01 A28040 D223991 Wa State Economic And Revenue Forecast Council Covid Impacts
- Date
- 2020-12-01
- Case
- 2020 12 01 A28040 D223991 Wa State Economic And Revenue Forecast Council Covid Impacts
Summary
A slide presentation titled COVID Impacts & Economic Climate Measures, presented by the Executive Director of the Washington State Economic and Revenue Forecast Council to the House Innovation, Technology and Economic Development Committee on December 1, 2020. The slides chart consumer confidence, business closures, U.S. industrial production, Washington consumer spending and employment loss by recession. They report Revenue Act receipts for September activity up 3.6% year over year and compare state revenue forecasts, with the November forecast at $50,995 million for 2019-21 against $52,690 million in February. Later slides give select measures from the 2019 Economic Climate Study, including university R&D spending, average hourly wage and property crime rankings among the 50 states.
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Cite this document
“COVID Impacts & Economic Climate Measures.”
Original at app.leg.wa.gov, dated 2020-12-01. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-12-01-2020-12-01-a28040-d223991-wa-state-economic-and-revenue-forecast-council-covid-impacts/
, SHA-256 0851acc483ca8ae12eac1dc992d52880070f0a96a726f5d8b11aaecf4388a5d4.Full text
COVID Impacts & Economic Climate
Measures
Presented to
House Innovation, Technology and
Economic Development Committee
Steve Lerch
Executive Director
December 1, 2020
WASHINGTON STATE
ECONOMIC AND REVENUE FORECAST COUNCIL
Economic Impacts of COVID-19
House ITED
Committee
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 1
Consumer confidence remains
well below pre-pandemic levels
Index
Mich: 1966Q1 = 100, SA
Conf Board: 1985 =100, SA
150
125
100
75
50
25
0
2005 2007 2009 2011 2013 2015 2017 2019
U. Michigan Conf Board
House ITED
Committee Sources: University of Michigan, data through Oct. 2020; Conference Board, data through Nov. 2020
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 2
Restaurants, retail businesses
hardest hit by downturn
Businesses marked closed on Yelp that were open March 1,
2020; U.S. data
35,000
Closure rates
per 1,000
30,000
businesses:
25,000
25.8 pizza
restaurants;
20,000
56 burger
15,000
restaurants;
10,000
24.2 women’s
clothing stores;
5,000
31.3 men’s
clothing stores
0
Restaurants Shopping & Beauty & Bars & Fitness
retail spas nightlife
Permanent Temporary
House ITED Source: Yelp Local Economic Impact Report; data March 1 – August 31 2020
Committee
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 3
U.S. industrial production improved in
October but is still 5.3% below its
year-ago level
U.S. Industrial Production Index; 2012 = 100
115
110
105
100
95
90
85
80
2000 2003 2006 2009 2012 2015 2018
House ITED
Committee Source: Federal Reserve; data through October 2020
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 4
Since May, WA consumer spending
has grown in all but four weeks on a
year over year basis
Consumer spending, year over year change
20%
Earnest Research
tracks a subset
15%
of credit and
debit card
10%
transactions for
large national
5%
chain stores and
businesses; does
0%
not include
construction or
-5%
auto sales.
-10%
-15%
-20%
-25%
Jan-20 Mar-20 May-20 Jul-20 Sep-20
U.S. WA
House ITED
Committee Source: Earnest Research COVID-19 tracker, data through week ending Oct. 11 2020
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 5
WA employment loss by recession
Percent change from pre-recession peak
2%
0%
-2%
-4%
-6%
-8%
-10%
-12%
-14%
Peak 1 2 yrs 3 yrs 4 yrs 5 yrs
year
2001 2007-09 2020
House ITED
Committee Source: WA Employment Security Dept., ERFC November 2020 preliminary forecast
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 6
Many economists do not expect GDP
to return to its pre-pandemic level
until late 2021 or 2022
In what quarter do you expect U.S. real GDP to regain its
2019 Q4 level?
40%
The November
ERFC forecast
assumes GDP
will return to 30%
pre-pandemic
level in the 4th
quarter of
2021. 20%
10%
0%
2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2 or
later
House ITED
Committee Source: Wall Street Journal, October 2020 Economic Forecasting Survey
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 7
Revenue Act collections increased year-
over-year for the last three months
Adjusted $millions SA
Revenue Act
1,600
receipts for
September 1,500
activity were up
3.6% YOY. 1,400
Receipts for July 1,300
and August
activity were up 1,200
2.5% and 0.8%
respectively. 1,100
1,000
Receipts are
forecasted to be 900
flat YOY next
800
month (October
activity) but 700
negative for the
rest of Q4 600
activity and into 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
early 2021.
Revenue Act Collections 3-Month Moving Average
* Adjusted for large one-time transactions, amnesty payments, reporting frequency change and deferred payments,
House ITED current definition of Revenue Act
Committee Source: DOR and ERFC ; monthly data through September 2020 activity
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 8
Cannabis revenues have spiked since
April
Retail Cannabis Collections
60
50
40
Millions
30
20
10
0
2015 2016 2017 2018 2019 2020 2021
Forecast History
House ITED
Committee Source: ERFC November 2020 forecast; historical data through October 2020
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 9
State revenue* forecast comparison:
February, September, November 2020
$ millions
2019 - 21 2021 - 23
February $52,690 $56,317
September $50,361 $54,338
November $50,995 $54,666
September - February ($2,329) ($1,979)
November - February ($1,695) ($1,651)
House ITED *Sum of forecasted revenue for General Fund-State, Education Legacy Trust, Washington Opportunities Pathway and
Committee Workforce Education Investment Accounts
Detail may not add to total due to rounding
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 10
Select Measures from 2019
Economic Climate Study
erfc.wa.gov/sites/default/files/public/documents/
publications/climate2019.pdf
House ITED
Committee
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 11
Innovation Drivers
Per Capita University R&D Spending:
University research & development expenditures per
person
• 2017 rank among 50 states: 5th (WA: $235; US average:
$229)
• 2013 – 2017 average rank among states: 5th
Interstate highway miles in poor condition:
Interstate miles with an International Roughness
Index of 171 or higher
• 2017 rank among 50 states: 43rd (WA: 6.3%; US average:
3.3%)
• 2013 – 2017 average rank among states: 43rd
House ITED
Note: all rankings from best (1st ) to worst (50th) from a business perspective
Committee
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 12
Business Performance
State & Local Tax Collections per $1,000
Personal Income:
• 2016 rank among 50 states: 23rd (WA: $96.78; US
average: $102.87)
• 2012 – 2016 average rank among states: 16th
Unemployment Insurance Costs:
Taxes as percent of total wages of covered
employees:
• 2017 rank among 50 states: 34th (WA: $0.70; US average:
$0.65)
• 2013 – 2017 average rank among states: 37th
House ITED
Note: all rankings from best (1st ) to worst (50th) from a business perspective
Committee
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 13
Economic Growth & Competitiveness
Total Average Hourly Wage:
• 2018 rank among 50 states: 4th (WA: $28.56; US average:
$23.84)
• 2014 – 2018 average rank among states: 8th
Percent of Monthly Income Spent on Rent:
• 2017 rank among 50 states: 36th (WA: 17.3%; US
average: 17.0%)
• 2013 – 2017 average rank among states: 34th
House ITED
Note: all rankings from best (1st ) to worst (50th) from a business perspective
Committee
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 14
Quality of Life
Property Crime Rate:
Property crimes per 100,000 people
• 2017 rank among 50 states: 46th (WA: 3,174; US average:
2,377)
• 2013 – 2017 average rank among states: 49th
Toxins released per square mile:
Includes toxic releases into air, water or ground
• 2017 rank among 50 states: 20th (WA: 447 pounds; US
average: 1,043 pounds)
• 2013 – 2017 average rank among states: 19th
House ITED
Note: all rankings from best (1st ) to worst (50th) from a business perspective
Committee
December 1, 2020 WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 15
Questions
Economic & Revenue Forecast Council
PO BOX 40912
Olympia WA 98504-0912
House ITED
Committee www.erfc.wa.gov
December 1, 2020 360-534-1560
WASHINGTON STATE ECONOMIC AND REVENUE FORECAST COUNCIL
Slide 16
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- Original
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