ATLANTIC CITY 135

Relative Employment Performance (1991=100)

LIFE CYCLE PHASE
EMPLOYMENT Mature 130
GROWTH RANK Best=1
VITALITY
Worst=387 125
Best=1 Worst=387 120
2004-06 350
5th quintile
115

301
4th quintile
COST OF DOING
BUSINESS
110
105
100
2004-09
U.S.=
100% 117% 95
COST OF 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

261
4th quintile U.S.=
100%
LIVING

99% DataBuffet® MSA code: MATA

U.S. ATA

1998 1999 2000 2001 2002 2003 2004 Indicators 2005 2006 2007 2008 2009
10.5 10.6 10.9 11.0 11.1 11.1 11.6 Gross Metro Product, C$B 11.9 12.1 12.4 12.7 13.0
0.3 0.6 2.4 0.9 1.3 0.1 4.4 % Change 2.9 1.7 2.4 2.1 2.2
141.3 143.7 144.8 147.2 146.6 148.9 149.4 Total Employment (000) 149.7 151.7 153.8 155.1 156.7
0.7 1.7 0.8 1.6 -0.4 1.6 0.4 % Change 0.2 1.3 1.4 0.8 1.0
7.8 7.0 4.6 4.7 6.6 6.9 5.6 Unemployment Rate 5.0 5.0 5.1 5.1 4.9
5.4 -0.0 6.1 -1.3 3.0 3.5 6.6 Personal Income Growth 6.4 6.7 5.1 4.4 4.8
247.9 250.4 253.1 255.6 259.3 263.9 268.7 Population (000) 271.4 273.9 276.8 279.4 282.3
1,148 1,239 1,433 1,583 1,851 2,058 1,970 Single-Family Permits 1,787 1,613 1,614 1,525 1,505
72 162 192 102 169 227 105 Multifamily Permits 255 337 113 147 154
108.9 112.1 117.2 124.9 143.1 165.4 197.2 Existing Home Price ($Ths) 241.3 265.4 269.6 265.0 259.0
936 997 943 1,678 2,759 3,646 2,922 Mortgage Originations ($Mil) 4,150 4,645 4,056 3,587 3,389
2.1 1.6 1.8 1.6 2.9 3.7 4.0 Net Migration (000) 1.9 1.6 2.0 1.6 1.9
2,426 2,158 2,049 2,282 2,338 2,364 2,182 Personal Bankruptcies 1,908 1,638 1,832 2,040 2,133
STRENGTHS & WEAKNESSES ANALYSIS
STRENGTHS Recent Performance. The expansion of At- industry will face growing competition from
 Gaming industry continues to pump dollars lantic City accelerated sharply at the end of the neighboring states.
into the local economy. year after going through a slump in the earlier Real estate. The housing market has been par-
 Shore real estate remains in high demand. part of last year, which was mostly due to weak- ticularly strong along the Jersey Shore during the
 Healthy population trends. ness in the leisure/hospitality industry. All the last few years. House prices adjusted for mix of
major areas of ATA’s economy are growing homes sold have appreciated by more than 30%
WEAKNESSES except construction. The tourism industry has since the beginning of 2004, compared to 20%
 Low-paying, tourism-related jobs crimp income been the strongest growth area for the metro nationwide. While soaring prices have benefited
growth. area recently. However, ATA’s heavy depen- the real estate business and speculators as well
 High cost of doing business. dence on tourism makes it particularly vulner- as households, whose equity has increased sig-
 Extremely low industrial diversity. able to seasonal swings and makes the employ- nificantly, the housing boom has also seriously
ment base very volatile. Strong income growth, eroded housing affordability in the metro area.
along with rapid house-price appreciation, has The biggest downside risk to the housing market
pushed the personal bankruptcy rate lower in is from the rising interest rates and skittish spec-
CURRENT EMPLOYMENT TRENDS 2005, although it is still well above average. ulators who may dump properties in an effort to
December 2005 Employment Growth Tourism. ATA’s economy will continue to capitalize on their investments quickly.
benefit from tourism dollars. Growth in lei- Migration. ATA’s population growth has been
% change year ago, 3 mo. MA sure/hospitality employment surpassed both driven by the strong migration into the metro
T otal 3.9 the state and national averages by hefty mar- area in recent years. Population growth has aver-
Construction -3.8 gins in recent months. Gaming is a $5 billion aged 1.8% since 2000, up from 1.0% during the
Manufacturing 0.0
T rade 3.6 industry in ATA, and in order to stay com- prior five years. Population growth has lent con-
T rans/Utilities -1.0 petitive, the casino industry has been redefin- siderable support to the area’s consumer indus-
Information 3.2
Financial Activities 3.8 ing itself with more entertainment and retail tries. However, the two factors, which drew more
Prof & Business Svcs 4.0 shopping venues. migrants to the area—a low cost of living and
Edu & Health Svcs 3.1
Leisure & Hospitality 7.3
The outlook for the industry depends on newly opened casinos—have been waning with
Other Services 2.3 continued investment in the gaming industry. the decline of housing affordability and comple-
Government 0.0
The MGM Mirage is expected to build a casino tion of casinos. Furthermore, there are few job
-6 -4 -2 0 2 4 6 8 10 on the 70 acres of land (Renaissance Pointe) it opportunities outside the casinos. Population
owns in ATA. Although, to a certain extent, each growth is expected to settle back to a more mod-
FORECAST RISKS new casino cannibalizes the business of exist- erate pace of 1.0% over the next five years.
SHORT
TERM  LONG
TERM
 RISK-ADJUSTED
RETURN, ‘04-09 -0.56% ing venues, and overall revenues have contin- A growing tourism industry will drive Atlan-
ued to grow as the additions have also attracted tic City’s near-term economic growth. However,
UPSIDE
new visitors. Another new development for the there are significant downside risks to the out-
• Strong national economy and weak dollar area is a large retail outlet mall, known as “The look for the area. In particular, the expansion
spurs increased tourist activity. Walk,” which is expected to enter phase II ex- of gaming in the adjacent states will put extra
• ATA emerges as a national gaming hub. pansion. The Walk was built with $76 million pressure on gaming revenues. Furthermore,
from gaming revenues, which was earmarked the ATA’s volatile employment base, extremely
DOWNSIDE for economic development projects. low industrial diversity, and near-bottom work-
• Jersey shore real estate prices tumble. The recent loss of the Miss America Pageant force quality will limit the future prospects of
• State budget deficits germinate tax increases. to Las Vegas and legal problems for the Borgata the metro area. Therefore, ATA is expected to
casino have not reduced ATA’s attractiveness perform below average over the long term.
as a premier vacation destination in the North- Asim Khan
east. However, going forward, ATA’s gambling January 2006

Précis METRO © 2006 Moody’s Economy.com, Inc. • 121 N. Walnut Street, Suite 500 • West Chester, PA 19380 • 610.235.5000 • help@economy.com • www.economy.com
For the confidential use of subscribers. Although the information in this report has been obtained from sources that Moody’s Economy.com, Inc. believes to be reliable, we do not
guarantee its accuracy, and such information may be incomplete or condensed. This report is available through the Internet at Economy.com/Research.
 EMPLOYMENT & INDUSTRY MIGRATION FLOWS
TOP EMPLOYERS INDUSTRIAL DIVERSITY Into Atlantic City Number Median
Bally's Casino 6,021 of Migrants Income
Most Diverse (U.S.)
Borgata Hotel Casino & Spa 4,613
1.00 Camden NJ 2,148 32,256
Trump Taj Mahal 4,107
Tropicana Casino and Resort 3,681 Ocean City NJ 1,370 32,608
Caesars Casino 3,668 0.80 Edison NJ 1,128 33,860
Atlantic City Hilton 2,680 New York NY 980 21,091
Harveys Casino Hotel 2,665 0.60 Philadelphia PA 966 32,558
Trump Hotels and Casino Resorts 2,646 Vineland NJ 630 25,681
Showboat Casino 2,463 0.40
Newark NJ 282 37,502
Trump Marina 2,319 Las Vegas NV 131 34,166
Resorts Casino Hotel/Colony Capital 2,261 0.20 0.12 Nassau NY 117 33,653
Sands Hotel and Casino 1,840 Wilmington DE 102 33,437
Shore Memorial Hospital 1,750 0.00
Least Diverse Total Inmigration 10,961 26,700
MW Manufacturing 650
Flagship Resort 625
EMPLOYMENT VOLATILITY From Atlantic City
Kessler Memorial Hospital 600
DUE TO U.S. RELATIVE TO Camden NJ 1,625 27,949
The Press of Atlantic City 360
FLUCTUATIONS U.S. Vineland NJ 975 23,892
NJ Division of Gaming Enforcement 350
Philadelphia PA 646 20,716
Atlantic City Linen 330 100%
Bayada Nurses 280
Ocean City NJ 564 27,096
Edison NJ 489 25,265
80% New York NY 360 18,213
Source: The Press of Atlantic City, 2004
Wilmington DE 165 29,037
60% Tampa FL 144 23,020
228 Newark NJ 136 23,584
40% Orlando FL 135 16,496
Public 59% Total Outmigration 8,763 22,766
Federal ...................................................... 2,883 20% 100
State .......................................................... 4,142
Net Migration 2,198 3,934
Local ....................................................... 15,584 0%
2004 Not due to U.S. Due to U.S. ATA U.S.

COMPARATIVE EMPLOYMENT AND INCOME

% of Total Employment Average Annual Earnings
Sector ATA NJ US ATA NJ US Net Migration, ATA
Construction 3.6% 4.1% 5.3% $61,969 $57,266 $43,405
Manufacturing 3.0% 8.5% 10.9% $49,726 $80,290 $63,608 5,000
Durable 68.4% 44.6% 62.3% nd $73,674 $66,482
4,000
Nondurable 31.6% 55.4% 37.7% nd $85,588 $58,981
Transportation/Utilities 2.1% 4.4% 3.7% $43,506 $53,418 $52,867 3,000
Wholesale Trade 1.9% 5.8% 4.3% $51,081 $76,628 $59,820
2,000
Retail Trade 10.7% 11.7% 11.4% $36,226 $32,928 $25,982
Information 0.7% 2.5% 2.4% $76,192 $90,440 $74,870 1,000
Financial Activities 2.9% 6.9% 6.1% $29,801 $60,596 $50,152
0
Prof. and Bus. Services 6.5% 14.6% 12.5% $41,963 $58,150 $46,927 2001 2002 2003 2004
Educ. and Health Services 11.5% 13.7% 12.9% $42,863 $43,761 $37,997
Leisure and Hosp. Services 38.4% 8.2% 9.5% $38,806 $22,811 $18,752
Other Services 2.8% 3.9% 4.1% $23,034 $27,314 $22,636 2001 2002 2003 2004
Government 15.1% 15.8% 16.4% $57,858 $57,431 $50,297 Domestic 219 1,549 2,390 2,692
Source: Percent of total employment - Moody’s Economy.com & BLS, 2004; Average annual earnings - BEA, 2003
Foreign 1,383 1,361 1,325 1,323
HOUSE PRICES LEADING INDUSTRIES
Total 1,602 2,910 3,715 4,015
300 NAICS Industry Employees (000)
Sources: IRS (top), 2004; Census Bureau & Moody’s
GVSL State & Local Government 8.1 Economy.com, 2004
250 6221 General Medical and Surgical Hospitals 3.0
7221 Full-Service Restaurants 2.2
4841 General Freight Trucking 1.7
PER CAPITA INCOME
200 7222 Limited-Service Eating Places 1.6
4244 Grocery and Related Product Wholesalers 1.1
4451 Grocery Stores 1.1
150 6211 Offices of Physicians 1.1
5613 Employment Services 1.1
100 4529 Other General Merchandise Stores 1.0
6231 Nursing Care Facilities 1.0
GVF Federal Government 1.0
50 2360 Construction of Buildings 0.9 39,737
87 90 94 98 02 05 3222 Converted Paper Product Manufacturing 0.9 31,749 31,487
4521 Department Stores 0.8
ATA U.S. High-tech employment 1.4
As % of total employment 2.2
Source: OFHEO, 1987Q1= 100, NSA
CREDIT QUALITY ATA NJ US
FITCH MOODY’S
N/A COUNTY Aa3 Sources: BLS, Moody’s Economy.com, 2004 Source: Bureau of Economic Analysis, 2003

Précis METRO © 2006 Moody’s Economy.com, Inc. • 121 N. Walnut Street, Suite 500 • West Chester, PA 19380 • 610.235.5000 • help@economy.com • www.economy.com
For the confidential use of subscribers. Although the information in this report has been obtained from sources that Moody’s Economy.com, Inc. believes to be reliable, we do not
guarantee its accuracy, and such information may be incomplete or condensed. This report is available through the Internet at Economy.com/Research.
 Atlantic City

Year-End Rebound in Atlantic City's Employment Trends Atlantic City Is the Least Diversified Metro Area in New Jersey
4 8
Total employment, % change year ago, 3 mo. MA (L) Atlantic City Industrial diversity index,
U.S.=1.0, 2004
3
Source: Moody's Economy.com
Vineland
7
2
Trenton
1
6 Ocean City
0
Newark
-1 Unemployment rate (R)
5
Edison
-2
Camden
-3 4
03 04 05 0.0 0.2 0.4 0.6 0.8 1.0

Atlantic City's Housing Affordability Nears All Time Low Atlantic City's Educational Attainment Is Below Average
28 180
% of population age
Atlantic City
Housing affordability index, (R) 25 and older with a
24 Source: Moody's Economy.com bachelor's degree,
U.S. 2000
160
20
Camden
16
OFHEO repeat-purchase 140 New Jersey
house price index
12 % change year ago (L)
Edison
8
120
Newark
4
Trenton
0 100
00 01 02 03 04 05 10 15 20 25 30 35

Migration Trends Have Improved in Recent Years

Atlantic City Income Is Gaining Traction
11
10 48 Domestic migration, ths
Median household income Source: IRS
8 Source: Moody's Economy.com In-migrants
47
10
6 % change year ago (L)
46
4
45
9
2
44
0
43 8
-2 Out-migrants

-4 42
$ ths (R)
7
-6 41
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
98 99 00 01 02 03 04 05

Précis METRO © 2006 Moody’s Economy.com, Inc. • 121 N. Walnut Street, Suite 500 • West Chester, PA 19380 • 610.235.5000 • help@economy.com • www.economy.com
For the confidential use of subscribers. Although the information in this report has been obtained from sources that Moody’s Economy.com, Inc. believes to be reliable, we do not
guarantee its accuracy, and such information may be incomplete or condensed. This report is available through the Internet at Economy.com/Research.