Arizona Economic Outlook 2nd Quarter

By Adam Lyons in : News // Jun 3 2010

The Phoenix economy is into recovery mode,

Jobs (on a seasonally-adjusted basis) bottomed out in November. Consumer spending has rebounded. The housing market is stabilizing.

Retail sales for the state bottomed in June 2009, and are now growing at an 8.8% annual rate. Restaurant and bar sales bottomed in October. Airline passenger numbers are growing. Total consumer spending is projected to grow 6.4% this year and 9.7% next, statewide. The Phoenix numbers are 6.3% and 9.1%.

Reasons are:

• Pent-up demand
• Lower savings rate
• Federal rebates (cars, houses, appliances, windows, etc.)
• Fewer people making mortgage payments
• Personal income growing (AZ, at a 4.5% annual rate)

Phoenix lost 12.2% of total jobs from August 2007 until November 2009. Jobs are being added now, especially in Educational Services, Health Care/Social Services, Mining, Wholesale Trade, Nondurable Manufacturing, Building Materials, Food & Drug and Clothing Sales. Improving to level are Employment Services, Construction and Financial Activities.

Unemployment rate projections statewide of 6.5% at the end of 2011 (recently, 8.9%). Initial unemployment claims here peaked in early 2009.

By 2013 there are expectations of 6% growth.

Five month supply of resale houses per MLS, a healthy ratio.  According to the Postal Service there are some 90K vacant housing units in the Valley, so the new home construction rebound will be gradual.

Valley population growth is projected to be back to 140K/150K per year by mid decade.

The jury is out on the effects of boycotts, but Marshall Vest believes their effect will be minimal on the total economy.

How Phoenix is ranking today:

• Job growth ranking = 50th
• Personal income growth = 41st
• State revenue growth = 43rd
• Fiscal peril – second only to California as worst
• Residential foreclosures = 4th
• Homeowners with negative equity = 2nd

View the complete report here UA_Economic_Outlook_Luncheon-2010-2011

For more information:

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