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Arizona Economic
Update & Outlook
ASU/JPMorgan Chase
Forecast LuncheonDecember 2, 2015
Lee.McPheters@asu.edu
Arizona Recovery – Are We There Yet?
Lost Jobs Regained by 2016
• Historically A Growth Leader
• But Recession Hit Earlier, Harder
• Economy Paused in 2014, 2015 Better
• New Job Mix is Emerging
• Long Term Outlook is Positive
ARIZONA Economic Outlook
Indicators 2014 2015 2016
Personal Income (%) 4.7 4.5 5.2
New Jobs (thousands) 47.8 61.6 68.0
Employment (%) 1.9 2.4 2.6
Population (%) 1.5 1.6 1.7
Single Family Permits (%) -8.0 25 30
5
9
8
AZ Ranks 20th in First Half
Personal Income Growth
Percent Change First Half 2015
20
U. S. Bureau of Economic Analysis
37
37
6
33
15
2
1
4
1018
Top 10 Growth States
Arizona Now Ranks in the
Bottom 10 States for
Per Capita Personal Income
What’s Going On?
“Growth” States Per Capita Income Rank
Fell…And Energy States Boomed
Construction/Growth States Rank 2006 Rank 2014 Change
Nevada 15 34 -19
Arizona 26 41 -15
Florida 17 28 -11
Georgia 29 40 -11
Energy/Resource States Rank 2006 Rank 2014 Change
North Dakota 40 4 +36
South Dakota 33 23 +10
Oklahoma 36 27 +9
Texas 25 22 +3
U. S. Bureau of Economic Analysis, Sept. 30 2015
FACT OR FICTION?
“Arizona is too reliant on population
growth and construction. “
Arizona Indicator 2006 2014
Annual Job Growth (-80,000) 127,000 47,800
Number of All Jobs (-71,000) 2,639,000 2,568,000
Manufacturing Jobs (-30,000) 186,000 156,000
Construction Jobs (-115,000) 240,000 125,000
Population Growth (-94,000) 190,000 96,000
Poverty Rank (-6) 36th 42nd
Per Capita Income Rank (-15) 26th 41st
Reality Check: 2006 vs 2014
U. S. Bureau of Labor Statistics, U.S. Census Bureau,
U.S. Bureau of Economic Analysis
Jobs Recovery Slower Than U.S.
• Arizona was hit hard in the recession,
losing more jobs (12%) than the US (6%)
• U.S. Regained Lost Jobs in May 2014
• Arizona has regained 88% of lost jobs
• Phoenix has regained 97% of lost jobs
• Tucson has regained 62% of lost jobs
U.S. Bureau of Labor Statistics, data through October 2015
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
40,100
-56,900
-189,900
-46,400
25,900
51,400 51,700 47,80061,600
68,000
Forecast
Arizona Recovers Lost Recession JobsAnnual Employment Change
As of October, Arizona needs
36,000 more jobs to return
to prior peak employment of
2,686,000 in October 2007
1
Ranked by % Change
Year To Date Oct. 2015
5
12
932
4
11
47
7
13
6
Top 10 Growth States
U. S. Bureau of Labor Statistics
45
3
Arizona Ranks 13th Among All
States In Year-to-Date Job Growth
2
8
10
39
Arizona Industry U.S. Rank % Growth
All Private Industry 9 2.7
Finance & Insurance 2 6.0
Personal Services 4 6.0
Prof/Technical Services 6 5.2
Information 8 2.8
Retail Trade 10 2.5
Arizona Job Growth Rankings
U. S. Bureau Labor Statistics
(Rank by Growth Vs. All States Year/Year October 2015)
Industry New Jobs Wage
Private Industries 59,700 $46,500
Professional, Tech 6,700 $73,300
Finance/Insurance 8,600 $68,600
Health Care 9,500 $48,800
Construction 4,700 $48,600
Retail Trade 7,700 $30,000
Food Services 6,400 $17,000
Source of 75% Of New Jobs(Jobs Added 12 Months Oct. 2015 vs. Oct. 2014)
U. S. Bureau of Labor Statistics
New Jobs Past 12 Months:
Mix of High, Average, Low Pay• 15,300 knowledge Jobs (professional,
finance) paid well above average wages
• 14,200 skilled jobs (construction, health
care) paid about average wages
• 14,100 lower skilled jobs (food service,
retail) paid below average wages
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
3.3 3.3
2.3
1.8
1.0 1.0 0.9
1.3 1.21.5 1.6 1.7
Forecast
Arizona Population Growth Remains
Below Historical Average (3.2%)*
*Average is 1977 - 2007
Annual Percent Change
Arizona population has
not
grown by 2% since
2007
U. S. Census Bureau
1
15
3
26
9
Arizona Ranked 5th in U.S.
Absolute Population Increase
5
U. S. Census Bureau, Dec. 2014
4
1345
7
8
36
2 10
47
6
1423
Top 10 Growth States
1
2
5
Arizona 3rd in Domestic Migration
3
607,000 Domestic Migrants
U. S. Census Bureau, Dec. 2014
9
7
4
8 6
10
30 States in Red Lost Residents to 20 States in Green
1
2
5
Arizona 17th in International Migration
3992,000 International Migrants
U. S. Census Bureau, Dec. 2014
9
7
4
8
6
10
All States Added International Migrants
17
1924
26
33
38
43
48
50
12
Top 10 Growth States
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
55,633
37,666
19,153
12,82610,755 10,306
16,18918,386 16,841
21,000
27,500
Arizona Home Building Improves Single Family Permits Up After 2014 Slowdown
Forecast
8% Fall
25% Rise
30% Rise
U. S. Census Bureau
ArizonaUSA
US and Arizona Home Ownership Rates
Decline to Lowest Level Since 1967
U. S. Census Bureau
0
100
200
300
400
500
600
700
800
900
1000
Under 10 10 - 19 20 - 29 30 - 39 40 - 49 50 - 59 50 - 69 70 - Up
Millennials (20-29) Largest Population Group
- When Will They Become Home Buyers?
20 – 29 Years Old
Arizona Population (000)
Arizona Outlook Summary
• 2016 – best recovery year yet – but still
below long term average growth rates
• Population growth (relatively) slow
• Knowledge jobs – the new driver
• Global economy is short term risk
• Job quality greatest long term risk
No Doom – No Gloom – No BoomBut 2016 Best Year Yet for Arizona Recovery
Arizona Economic
Update & Outlook
ASU/JPMorgan Chase
Forecast LuncheonDecember 2, 2015
Lee.McPheters@asu.edu
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