Arizona (and the West) Shall Rise Again – Just you Wait! 48 th ASU/Chase Economic Forecast [email protected]
Mar 26, 2015
Arizona (and the West) Shall Rise Again – Just you Wait!
48th ASU/Chase Economic Forecast
• Getting Better? Or Worse?
• Arizona Adding Jobs - Slowly
• Full Recovery is Years Away
• Long Term Outlook is Positive
Arizona Update & OutlookArizona Update & Outlook
How Long Is “Long Term?”
Arizona Full Recovery
3-4-5 Years?
71% say economy is “getting worse” Gallup PollNovember 26, 2011
56% “getting worse” November 26, 2010
29% say U.S. economy is now “in a depression”
But..real GDP has recovered to prior peak
before start of the recession
2006 2007 2008 2009 2010 2011
Gross Domestic Product ($2005)
“…mania of pessimism”- John Paulson
Objective Approach“What are the numbers?”
Modern Approach“How do you feel
about the numbers?”
Unemployment
& Weak Job Growth
Reduce ConfidenceIncrease Pessimism
Meanwhile…
Year-over-Year Arizona Job Growth Is (Slowly) Improving
Indicator 2011 2010Labor Force 3,171,000 3,179,000
Unemployed 282,000 307,000
Unemp. Rate 9.0% 9.8%
Jobs–12 Mos 44,700 -15,000
Arizona Labor Market ImprovesCompare October 2011 vs October 2010
W. P. Carey School of Business & U. S. Bureau Labor Statistics
( Percentage Change 2010 vs 2009)
41 States Lost Jobs in 2010
Alaska 3
6
Hawaii
5
2
Lost Jobs (41)
Added Jobs (9)
9
49
444
48
40
17
3850
42
28
78
1
25
43
(Ranked by Percent Change Oct. 2011 vs Oct. 2010)
45 States Now Adding Jobs
5
3
1
4Losing Jobs (5)
Adding Jobs
6
7
10
2
9
13
32
8
1521
36
14
Az Industry Rank New JobsOverall Az Jobs #7 44,700
Health Care #3 14,100
Construction #3 4,600
Trans./Warehouse
#4 4,100
Manufacturing #9 4,700
Arizona Growth RankingsStates Ranking by Percent Growth: Oct. 2011 vs Oct. 2010
W. P. Carey School of Business & U. S. Bureau Labor Statistics
Arizona Jobs Still Down by 300,000And At Same Level as 2004
Peak 2.7 mil
2.4 mil
2004 2005 2006 2007 2008 2009 2010 2011
Metro Area Percent Job GainsHouston 3.1% 79,500
Seattle 2.3% 37,700
Tampa 2.2% 24,100
San Diego 2.0% 24,000
Boston 1.9% 47,000
Pittsburgh 1.9% 21,800
Phoenix 1.8% 29,900
Best Metro Job Growth 2011Job Gains – Oct. 2011 vs Oct. 2010 – Labor Force > 1 Million
W. P. Carey School of Business & U. S. Bureau Labor Statistics
Realistically…
Full Recovery isYears Away
U.S. Full Job Recovery Will Take Years
2001 Recession
1990 Recession
Current Employment
After four years, Arizona jobs are still10% below 2007 peak
4 More Years For Az Jobs Recovery
Assume: 2.5% job growth starting in 2012- back to peak in 2015
96 Months/8 Years To Return to Peak
4 More Years For Az Jobs Recovery
Economic Outlook:
Slow(very slow)
Growth
2010 2011 2012Personal Income (%) 2.9 5.5 6.0
Employment (%) -2.1 1.0 1.8
Retail Sales (%) -1.7 7.5 8.0
Population (%) 1.1 1.2 1.5
ARIZONA Economic Forecast
W. P. Carey School of Business, ASU; based on data available as of Dec. 1, 2011
Major Arizona Risk – U.S. Economy
31,200
85,000
127,700 126,300
39,800
-57,300
-190,300
-51,900
24,00045,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Arizona Jobs Growing AgainAnnual Numeric Change In Arizona Employment
YTD Az Job Growth 0.8% Thru Oct.
ForecastU.S. BLS & W. P. Carey School of Business
Annual Percent Change
Arizona Dept. of Revenue & W. P. Carey School of Business
Arizona Retail Sales Outlook:Consumers Still Cautious
Forecast
U.S. Census Bureau & W. P. Carey School of Business Forecast
Population Growth BelowAverage – For Arizona
(Annual Percent Change)
2005 - 2007 2008 - 2010
U. S. Census Bureau and W. P. Carey School of Business
Annual Average Migration toArizona Slowed In Recession
97,492
42,553
Long Term Arizona Population Growth Projections Still Strong
Thousands of New Residents Per Year
U. S. Census Bureau and IHS Global Insight
Percent Families That Can Afford Median Priced Home
National Association of Home Builders
Silver Lining: Phoenix Housing Again More Affordable Than U.S.
Short Term Outlook Weak
Plan Now For ArizonaLong Term Recovery
(Ranked by Percent Change 2011 – 2015 Job Growth)
Arizona Top Growth State: 2015
6
2
1
73 10
4
9
5
8
17
11
12
13
14
15
16
19
20
18
Source: IHS Global Insight
• Educated work force
• Competitive tax structure
• Affordable energy, water, land
• Transportation infrastructure
• Strong national/global brand
Quality Growth Depends on More Than Population
Increases
The Paradox of Recovery
RECESSION AND RECOVERYRecession Cause Recession Cure
Too Much Confidence More Confidence
Too Much Credit More Credit
Too Much Spending More Spending