economic indicators Figure 1: Gwinnett County Leading Economic Index (1997 = 100) Leading Index Components: 12-month moving average Jul-04

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1 economic indicars department of financial services june 2005 v4, n2 Leading Economic Index Rises as Initial Claims Drop Sharply; Current and Lagging Indicies are Mixed; Manufacturing Employment Rebounds in this issue economic indices 3Q '04 employment population revisions The Gwinnett County Index of Leading Economic Indicars rose in May, as four of the five leading indicars improved during the month. However, since our last Economic Indicars newsletter, the index is down 1.0 percent. For the twelve months ending in May 2005, the Leading Index is up just 1.0 percent. The leading index, which is designed forecast the county s economic performance 3 6 months in advance, rose above the 12-month moving average in May for the first time in three months. If the index is consistently above this average the local economy is likely enter or continue a period of economic growth. Unfortunately, the index has not been consistently above the average. Combined with the anemic 1.0 percent annual growth, this suggests that the local economy is still struggling find consistent footing (Figure 1). As mentioned, four of the five leading indicars improved in May. The largest improvement was in initial unemployment claims which dropped 28 percent from the previous month (seasonally adjusted). On a year--date basis, through May, initial claims are running well below 2004 levels (Figure 2). Another boost the index was the increase in single-family building permits which posted a 15.2 percent increase in May (seasonally adjusted), and were 7.8 percent above May of For the year, the average monthly number of singlefamily permits issued is running 0.8 percent above last year (Figure 3). According the Census Bureau, Gwinnett added 102 Figure 1: Gwinnett County Leading Economic Index (1997 = 100) Leading Index Components: May Jan-97 Jul month moving average Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Initial Unemployment Claims Down -28.0% Gwinnett Sck Index Up 5.2% Consumer Expectations Up 14.0% Manufacturing Weekly Hours Down -2.4% Single Family Building Permits Up 15.2% Leading Economic Index Up 1.5% 12-Month Change Up 1.0%

2 current index 27,000 people in 2004, and the forecast is for at least another 26,000 in As the population continues grow at such strong levels and mortgage rates remain low, single-family permits, as well as local construction, should remain strong for some time. 3,000 2,500 2,000 1,500 1, % 10% 8% 6% 4% 2% 0% -2% -4% % Figure 2: Initial Unemployment Claims (Monthly Average; Seasonally Adjusted) Figure 3: Single-Family Building Permits (Seasonally Adjusted Annual Rate) 4.5% 10.7% 2, % -3.3% YTD Current Economic Indicars 2,353 2, % 2,024 1, YTD 0.8% The Gwinnett County Index of Current Economic Indicars declined slightly in April as two of the four indicars declined. However, since the last Economic Indicars newsletter, the index is up 0.1 percent, and for the twelve months ending in April 2005, the Current Index is up 2.2 percent. The Current Index, which is designed track the current state of the Gwinnett County economy, has been above the 12-month moving average for 14 consecutive months. This is significant because if the index is consistently above this average, then it usually means that the economy is likely experiencing a period of economic growth. While the local economy is growing, as the Index of Leading Indicars suggests, this growth is anemic and certainly not the type of growth that the county experienced prior the recession (Figure 4.) Jan-97 Jul-97 Jan-98 Figure 4: Gwinnett Current Economic Index (1997 = 100) The variables in the Current Economic Index are sending very mixed signals. On a seasonally adjusted basis, sales tax revenue reached an all-time high in April (Figure 5), while at the same time employment posted a level in April that was lower than the same month a year ago. $13,000,000 $12,000,000 $11,000,000 $10,000,000 $9,000,000 $8,000,000 $7,000, month moving average Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Figure 5: Monthly Sales Tax Collections ( Current; Seasonally Adjusted) 12-month moving average Another positive current economic indicar is the number of room nights that were logged in local hotels. On a seasonally 2

3 lagging index 3 adjusted basis, April saw the second highest number of room nights since 9/11. On a moving-average basis, April was the 17 th consecutive month that local hotels posted a year-over-year increase in room nights (Figure 6). This should be a continuing trend over the next several years as business convention activity is expected rise after three years of post 9/11 anxiety. Other facrs such as lower air fares and new local attractions (i.e., the Georgia Aquarium) should fuel this secr for some time. 20% 15% 10% 5% 0% -5% -10% Figure 6: Hotel/Motel Occupancy (Y-Y Change in Average # of Room Nights) -15% Lagging Economic Indicars The Gwinnett County Index of Lagging Economic Indicars declined slightly in March as only two of the four indicars posted slight improvement. Since the last Economic Indicars newsletter, the index is up 0.1 percent, and for the twelve months ending in March 2005, the Lagging Index is up 1.2 percent. The Lagging Index, which is designed confirm turns in the Gwinnett County economy, was above the 12-month moving average for the 6-month period ending in March. However, prior that, it was below the average for 45 months. This shift is significant because even though the other economic indices have turned positive, the lagging index confirms a turn in the local economy. Unfortunately, a significant variable in the index the number of bankruptcies continues rise. Business bankruptcies are dropping, but personal bankruptcies are continuing grow, and hit a 5-month high in March (Figure 7). 6,000 5,000 4,000 3,000 2,000 1,000 0 Figure 7: Personal and Business Bankruptcies (Total Number; 12-Month Ending) Employment Data 3 rd Quarter The Georgia Department of Labor has released employment data for the third quarter of During the quarter, Gwinnett County employment grew 1.3 percent adding nearly 3,900 jobs. The manufacturing secr had a net increase of more than 400 jobs, but the high-wage high-tech secrs continued decline. The service secr added nearly 1,500 jobs, many of which were once again in health care and the previously mentioned improving hospitality industry. Government employment (local, state, and federal) added 1,600 jobs during the quarter mostly due the beginning of the school year. For the second consecutive quarter, employment in Gwinnett is up 4.8 percent, or nearly 14,000 jobs when compared the same quarter a year ago. For the first time in more than two years, manufacturing actually posted year-over-year job growth. In terms of annual job growth, some of the strongest secrs included real estate, educational services, construction, and local government. Again, given the strong population growth recorded in 2004, the fact that these industries showed such strong growth isn t surprising. As population continues post large increases, these secrs should continue post strong employment gains. ~ Alfie Meek, PhD. Direcr Forecasting & Research Division

4 employment data 3rd Quarter 2nd Quarter 3rd Quarter Quarterly Y-Y Growth Growth Goods Producing 47,092 47,160 47, % 1.8% Agriculture, Forestry, & Fishing (11) % 5.3% Mining (21) % 0.6% Construction (23) 21,932 22,338 22, % 3.5% Manufacturing (31-33) 24,731 24,368 24, % 0.3% Food Manufacturing (311) 1,203 1,388 1, % 48.0% Beverage & Tobacco Manufacturing (312) 41 * 28 * -31.7% Textile Mills (313) % 148.0% Textile Product Mills (314) % -13.2% Apparel Manufacturing (315) % 14.8% Leather & Allied Product Manufacturing (316) 33 * * * * Wood Product Manufacturing (321) 794 1,131 1, % 48.2% Paper Manufacturing (322) % -9.0% Printing and Related Activities (323) 2,231 2,229 2, % 0.2% Petroleum and Coal Products Manufacturing (324) % 2.3% Chemical Manufacturing (325) 1,185 1,061 1, % -10.0% Plastics & Rubber Products Manufacturing (326) 1,295 1,409 1, % 8.2% Nonmetallic Mineral Product Manufacturing (327) % 18.0% Primary Metal Manufacturing (331) 207 * * * * Fabricated Metal Manufacturing (332) 1,694 1,724 1, % 6.5% Machinery Manufacturing (333) 1,557 1,488 1, % -7.3% Computer & Electronic Product Manufacturing (334) 5,437 5,430 5, % -0.7% Electrical Equipment/Appliance (335) 1,729 1,361 1, % -21.9% Transportation Equipment (336) % -26.9% Furniture and Related Products Manufacturing (337) 916 1,054 1, % 21.0% Miscellaneous Manufacturing Industries (339) 3,360 3,059 2, % -11.6% Service Producing 219, , , % 3.0% Wholesale Trade (42) 31,156 30,694 29, % -3.7% Retail Trade (44-45) 42,469 41,587 41, % -1.6% Transportation and Warehousing (48-49) 5,051 4,849 4, % -2.1% Utilities % -0.7% Information (51) 11,378 11,948 12, % 6.3% Finance and Insurance (52) 15,190 15,273 15, % 1.3% Real Estate and Rental and Leasing (53) 4,730 5,087 5, % 13.1% Professional, Scientific/Technical Services (54) 18,549 18,905 19, % 2.7% Management: Companies/Enterprises (55) 5,406 5,730 5, % 5.5% Administrative, Support, and Waste Mgt. Services (56) 31,598 34,973 35, % 12.6% Educational Services (61) 2,186 2,619 2, % 18.6% Health Care and Social Services (62) 17,976 17,891 18, % 0.3% Arts, Entertainment, and Recreation (71) 2,317 2,357 2, % 5.4% Accomodation and Food Services (72) 24,064 24,968 25, % 5.5% Other Services (81) 7,450 7,872 7, % 5.2% Unclassified (industry not assigned) % 1.2% Total Private Employment 267, , , % 2.8% Federal 3,056 3,026 3, % -0.7% State 1,937 1,944 2, % 12.0% Local 19,738 24,553 25, % 31.4% Total Government Employment 24,731 29,523 31, % 25.9% TOTAL GWINNETT EMPLOYMENT (JOBS) 292, , , % 4.8% * Denotes confidential data relating individual employers which cannot be released. Source: Georgia Department of Labor. Data represent jobs covered by unemployment insurance legislation. 4

5 index data Gwinnett County, Georgia Business Cycle Indicars June, Gwinnett County Economic Indices: May-05 Apr-05 Mar-05 Feb-05 Jan-05 Leading Economic Index (1997 = 100) Current Economic Index ( 1997 = 100) Lagging Economic Index (1997 = 100) Apr-05 May-04 Gwinnett County Leading Economic Index May-05 Apr-05 May-04 May-05 May-05 Leading Economic Index (1997=100) % 1.0% Components: Initial Unemployment Claims (Seasonally Adjusted) 1,636 2,274 1, % -14.2% Initial Unemployment Claims (Unadjusted) 1,582 1,682 1, % -4.2% Bloomberg Gwinnett Sck Index (12/31/97 = 100) % 2.0% South Atlantic Consumer Expectations % 3.4% Atlanta Manufacturing Averge Weekly Hours (Seasonally Adjusted) % 2.5% Atlanta Manufacturing Averge Weekly Hours (Unadjusted) % 2.5% New Single Family Building Permits (Seasonally Adjusted) % 7.8% New Single Family Building Permits (Unadjusted) % 12.6% Mar-05 Apr-04 Gwinnett County Current Economic Index * Apr-05 Mar-05 Apr-04 Apr-05 Apr-05 Current Economic Index (1997=100) % 2.2% Components: Sales Tax Receipts (Constant $'s; Ths., Seasonally Adj.) $8,794.2 $8,503.2 $8, % 9.2% Sales Tax Receipts (Current $'s, Ths., Unadjusted) $12,038.2 $11,545.8 $11, % 7.3% Household Employment (Seasonally Adjusted) 363, , , % -0.2% Household Employment (Unadjusted) 363, , , % -0.2% South Atlantic Consumer Confidence (Present Situation) % 17.2% Hotel/Motel Occupancy - Room Nights (Ths., Seasonally Adj.) % 7.8% Hotel/Motel Occupancy - Room Nights (Ths., Unadjusted) % 8.3% * (Data for the Current Index is one month behind due the lag in sales tax receipts) Feb-05 Mar-04 Gwinnett County Lagging Economic Index ** Mar-05 Feb-05 Mar-04 Mar-05 Mar-05 Lagging Economic Index (1997=100) % 1.2% Components: Average Duration of Unemployment Benefits (Weeks, Seasonally Adjusted) % -4.5% Average Duration of Unemployment Benefits (Weeks, Unadjusted) % -4.5% Prime Rate Charged by Banks % 39.5% Unemployment Rate (Seasonally Adjusted) 4.5% 4.3% 3.9% 0.1% 0.6% Unemployment Rate (Unadjusted) 4.3% 4.4% 3.8% -0.1% 0.6% Bankruptcies (Number, 12-month ending) 4,872 4,819 4, % 3.0% ** (Data for the Lagging Index is one quarter behind due the lag in bankruptcy data)

6 indicars 6 GWINNETT COUNTY, GEORGIA Top Employers in U.S. COUNTY 1 Gwinnett County Public Schools 17,697 POPULATION GROWTH RANK: 56 2 Gwinnett County Government 4,391 3 Gwinnett Health Care System 3, U.S. COUNTY 4 WalMart 3,067 POPULATION NUMBER RANK: 75 5 Publix * 2,847 6 United States Postal Service 2,442 1 = fastest/largest 3,141 = slowest/smallest 7 State of Georgia 2,055 8 Primerica 1,650 9 Scientific-Atlanta 1, Kroger * 1, Home Depot ** 1, Waffle House 1, Atlanta Journal Constitution * Emory Eastside Medical Center * CheckFree 810 NET TAXABLE DIGEST: $23.3 B Residential Commercial Mor Vehicle Source: Calls individual companies in March '05. * Full-time equivalents (FTEs) Source: Gwinnett County Tax Assessor. ** Based on business license data. 38% 8% 54% Indicars Total Employment (Jobs) 235, , , , , , ,860 - % change (0.2) Unemployment Rate Total Personal Income ($Bil) % change Sales Tax Revenue ($Mil) Population 516, , , , , , , ,794 Single-Family Permits 5,819 6,967 7,301 7,597 8,440 8,201 7,915 8,199 Median Existing Home Price ($Ths) Mortgage Originations ($Mil) 2,317 4,039 3,361 3,161 7,070 8,848 11,005 7,503 Net Migration (000) Personal Bankruptcies 2,732 2,713 2,676 2,667 3,313 4,044 4,553 4,513 Source: Gwinnett County; Georgia Dept. of Labor; U.S. District Courts; Bureau of Economic Analysis; U.S. Census Bureau; and Economy.com >$1,000,000 $500,000 - $999,999 $400,000 - $499,999 $300,000 - $399,999 $200,000 - $299,999 $100,000 - $199,999 <$100, HOUSE VALUE DISTRIBUTION % of single-family residences, Ave. value = $173, PER CAPITA INCOME $33,308 $30,277 $31,472 $29, GWN ATL GA US Source: Gwinnett County Tax Assessor. Source: Bureau of Economic Analysis, Although the information in this report has been obtained from sources that we believe be reliable, we do not guarantee its accuracy, and such information may be incomplete or condensed.