To gfoaz by jim rounds senior vice president elliott d pollack company january 10 th 2013
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To: GFOAZ By: Jim Rounds, Senior Vice President Elliott D. Pollack & Company January 10 th , 2013 PowerPoint PPT Presentation


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The Land of Uncommon Sense. To: GFOAZ By: Jim Rounds, Senior Vice President Elliott D. Pollack & Company January 10 th , 2013. Context. The economy we wanted…. What we got…. US New Job Data Change from Prior Month (S/A) June 2010 – December 2012 Source: Bureau Labor of Statistics.

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To: GFOAZ By: Jim Rounds, Senior Vice President Elliott D. Pollack & Company January 10 th , 2013

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The Land of Uncommon Sense

To:

GFOAZ

By:

Jim Rounds, Senior Vice President

Elliott D. Pollack & Company

January 10th, 2013


Context


The economy we wanted…


What we got…


US New Job Data Change from Prior Month (S/A)June 2010 – December 2012Source: Bureau Labor of Statistics

(000’s)


U.S. Unemployment Rate1976 – 2012* Source: Bureau of Labor Statistics

Recession Periods

*Data through November 2012


U.S. Underemployment Rate1994 – 2012* Source: Bureau of Labor Statistics

Recession Periods

Beaten down by life.

Unemployment Rate

*Data through August 2012


Financial Obligation Ratio**1980 – 2012* Source: Federal Reserve

Recession Periods

Paying less for past purchases!

*Data through second quarter 2012

**Ratio of mortgage and consumer debt (including auto, rent and tax payments) to disposable income.


Consumer Confidence1978 – 2012* Source: The Dismal Scientist

Recession Periods

Normal

Normal

Normal

New Normal?

Approval of medical marijuana...

*Data through December 2012


Real Retail Sales U.S. Percent Change Year Ago1973 – 2012* Source: Federal Reserve

Recession Periods

*Data through November 2012

**Three-month moving average


Real Disposable Personal IncomePercent Change Year Ago1971 – 2012* Source: Bureau of Economic Analysis

Recession Periods

* Data through second quarter 2012


Hours WorkedPercent Change from Year Ago1976 – 2012* Source: Bureau of Labor Statistics

Recession Periods

*Data through third quarter 2012


Capacity Utilization Rate1970 – 2012* Source: The Federal Reserve Bank of St. Louis

Recession Periods

*Data through November 2012


Recession Periods

U.S. Leading Indicators1971 – 2012* Source: The Conference Board

*Data through November 2012


FISCAL CLIFF

2013


Recession? No. Slow growth?Yes.Kicking the can…Yes.


Arizona


Alaska

Hawaii

Jobs growing

Top 10

Jobs declining

Job Growth 2006

Source: US BLS

10

7

9

5

1

4

3

15

22

8

2

11

6

13


Hawaii

Jobs growing

Top 10

Jobs declining

Job Growth 2009

Alaska 2

Source: US BLS

34

20

1

46

44

7

3

24

5

10

50

9

36

6

30

45

49

25

8

4


Hawaii

Jobs growing

Top 10

Jobs declining

Job Growth 2012

YTD November 2012 vs YTD November 2011

Source: US BLS

Alaska

43

11

26

1

33

12

31

50

34

7

4

10

9

14

5

2

6

47

3

8


SRP Residential Utility Hookup Percentage Growth Greater Phoenix 2003 – 2012* Source: SRP

POP

*Data through July 2012.


APS: Slowest Growth in over 50 years1954 – 2012*

POP

*Data through third quarter 2012

Source: APS


Arizona Retail Sales Percent Change Year Ago*1999 – 2012**Source: Arizona Department of Revenue

Recession Periods

9.2% October?

*Data through October 2012

**3-month moving average


FISCAL CLIFF IN ARIZONA?

Projected Net Job Growth:

2013 = 73,600

2014 = 88,500

= 162,100


FISCAL CLIFF IN ARIZONA?

If the mandated spending cuts take place, total loss to Arizona is projected at: 45,000 to 50,000 jobs.

(This does not take into account any slowdown caused by tax increases SO DOUBLE THIS NUMBER????)

We will still grow, but very slowly.

Remember, the “worst case” is not the most likely scenario.


Addl. Detail:Greater Phoenix


Arizona Employment*Source: Bureau of Labor Statistics

*November 2012/ November 2011


Employment Levels: Greater Phoenix back to Peak in 2015?Source: ADOA

Recession Periods

Peak


Maricopa County Retail Sales Percent Change Year Ago*1999 – 2012**Source: Arizona Department of Revenue

Recession Periods

*Data through October 2012

**3-month moving average


U.S. Single-Family Starts1978–20121/Source: Census Bureau

Recession Periods

(Millions)

Over-

supply

LTA: 1.2

Under-

supply

1/ Through November 2012


Single Family Permits Greater Phoenix 1975–2016*Source: RL Brown & Elliott D. Pollack & company

# Permits

(000)

But population growth also slid…

*2012 – 2016 forecast is from Elliott D. Pollack & Company


Greater Phoenix Percentage of Homes Purchased with$$$ Cash $$$2003 – 2012*Source: Cromford Report

*Data through November 2012


Greater Phoenix PermitsSource: R.L. Brown

*Data through YTD November 2012 vs. YTD November 2011


Home Prices IndicesGreater Phoenix1989 – 2012* Source: Macro Markets, LLC; AMLS

Recession Periods

?

*Data through October 2012.


Total Single Family Units Occupied by Renters2000-2011 Greater PhoenixSource: American Community Survey

?


Greater Tucson


Same basic story, just different scale and timing…


Greater Tucson MSA Employment* Annual Percent Change 1975–2012**Source: Department of Commerce, Research Administration

Recession Periods

*Non-agricultural wage & salary employment. Changed from SIC to NAICS reporting in 1990.

**Data through November 2012


Greater Tucson Employment*Source: Arizona Department of Commerce, Research Administration

?

*Nov 2012/Nov 2011


Pima County Retail Sales Percent Change Year Ago2000 – 2012* Source: Arizona Department of Revenue

Recession Periods

*Data through September 2012


Greater Tucson Single Family Permits2000–2012*Source: Southern Arizona Housing Market Letter

Recession Periods

*Data through September 2012


Single Family Resale Median PriceGreater Tucson2000 – 2012* Source: Southern Arizona Housing Market Letter

Recession Periods

*Data through November 2012


Balance of State


Balance of State Employment* Annual Percent Change 1975–2012**Source: Department of Commerce, Research Administration

Recession Periods

*Non-agricultural wage & salary employment. Changed from SIC to NAICS reporting in 1990.

**Data through September 2012


Balance of State Employment*Source: Arizona Department of Commerce, Research Administration

*November 2012/November 2011


Balance of State Retail Sales Percent Change Year Ago2000 – 2012* Source: Arizona Department of Revenue

Recession Periods

*Data through September 2012


Balance of State Single Family Permits1976–2013*Source: University of Arizona

Recession Periods

*2012 & 2013 are forecasts from the University of Arizona


Why be Optimistic?


Housing?


Many renting will buy.Many doubled-up will buy. Some population growth is back. Employment growth is occurring. Retirees less bound to crappy states. Investors will not suddenly dump and run. Still producing less than “normal.” Fundamentals remain in place. “Normal” returns in 2015-ish. Growth rates will be strong now though.


Cyclical vs. Permanent?


How Arizona Ranks Among the States in Percentage GrowthSource: U.S. Bureau of Census; Bureau of Labor Statistics; Bureau of Economic Analysis

PERSONAL

DECADEPOPULATIONEMPLOYMENTINCOME

1950 - 19604TH 3RD 2ND

1960 - 19703RD 3RD 4TH

1970 - 19802ND 3RD 4TH

1980 - 19903RD 3RD 5TH

1990 - 20002ND 2ND 3RD

2000 – 20102ND12th 8TH


Recession Periods

Arizona Outperforms the U.S.*(Non-farm Emp. Percent Change 1980 – August 2012)

*As long as population flows continue!


Greater Phoenix Population Annual Percent Change 1976–2013*Source: Arizona State University & Department of Commerce, Research Administration

Recession Periods

The Exception…

.

* 2012 & 2013 forecast is from Elliott D. Pollack & Co.


Growth Factors Still Intact?

  • Climate

  • Lifestyle

  • Geographic Location

  • Pro-Growth Attitude

  • Competitive Tax Structure

  • Focused Incentives/Investment (i.e. transportation)

  • Leadership with Common Sense

  • Low Cost of Living

  • Congressional Delegation Working for State

  • Business & Government in Same Direction

  • ETC, ETC, ETC.


Competitiveness Map – 2012(2013?)

Source : CBRE

Source: CBRE


Benefits of the “SUNBELT”

Industrial Northwest

9

10

5

Hawaii

Alaska


Where do they come from?

California – Complete disaster.

Northeast – Too damn cold.

Rust Belt – No jobs.

Florida – Need help finding their luggage though.

Others…


Top 10 StatesPercent of Homes with Mortgages with Negative EquitySource: Core Logic

U.S.= 22.3%


AZ will still be a top 5 economy.

The economy has multiple gears.

2015/2016 is FULL recovery for AZ.

The long term potential remains intact!

Closing Points:


What do you think still needsto be done?

Tourism coordination and enhancement?

Addl. economic development tools?

Others?

Your thoughts?


ELLIOTT D. POLLACK

& Company

  • Economic and Fiscal Impact Analysis/Modeling

  • Real Estate Market and Feasibility Studies

  • Litigation Support

  • Revenue Forecasting

  • Keynote Speaking

  • Public Finance and Policy Development

  • Land Use Economics

  • Economic Development

7505 East Sixth Avenue, Suite 100 Scottsdale, Arizona 85251

480-423-9200 P / 480-423-5942 F / www.arizonaeconomy.com / info@edpco.com


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