CENTER FOR ECONOMIC RESEARCH SIERRA VISTA Economic Outlook

CENTER FOR ECONOMIC RESEARCH SIERRA VISTA Economic Outlook 2016 Robert Carreira, Ph. D.

Real GDP Growth (%) 10 8 6 4 2, 2 2 0 -2 -4 -6 -8 -10 2004 2005 2006 2007 United States 2008 2009 2010 Arizona 2011 2012 2013 Cochise County 2014 2015* * AZ Q 1 -3 only

Jobs Pre-Recession High United States Arizona Cochise County 138. 4 mil 2. 69 mil 39, 300 129. 7 mil 2. 37 mil 33, 900 -8. 7 mil -313, 500 -5, 400 143. 8 mil 2. 69 mil 34, 200 +5. 3 million +2, 300 -5, 100 +14. 0 mil +316, 000 300 (Jan 08) Recessionary Low (Feb 10) Recessionary Job Losses Current * From High -6. 3% 3. 9% From Low 10. 8% * U. S. March 2016; AZ & CC February 2016 (Oct 07) (Sep 10) -11. 7% 0. 1% 13. 3% (Jun 08) (Jul 13) -13. 7% -13. 0% 0. 9%

Cochise County Jobs by Industry (Feb 2016) Change from Peak (%) 2, 900 1, 200 -1, 700 -58. 6% 900 500 -44. 4% 7, 100 5, 900 -1, 200 -16. 9% 700 500 -28. 6% 1, 100 1, 000 -10. 0% 6, 200 3, 800 -2, 400 -38. 7% 5, 000 4, 800 -200 -4. 0% 4, 300 4, 000 -300 -7. 0% 1, 100 600 -500 -45. 5% 6, 000 5, 000 -16. 7% 7, 700 6, 900 -800 -10. 4% Peak Construction and Mining (Jun 2006) Manufacturing (Oct 2008) Trade, Transportation, and Utilities (Dec 2007) Information (Mar 2011) Financial Activities (Dec 2008) Professional and Business Services (Jan 2010) Educational and Health Services (Sep 2012) Leisure and Hospitality (Apr 2008) Other Services (Mar 2006) Federal Government (Aug 2011) State and Local Government (Jun 2008) Current

Unemployment Pre. Recessionary One Year Recession High Ago Low Current* United States 4. 4% (May 2007) 10. 0% 5. 5% 5. 0% Arizona 3. 7% 11. 2% 6. 5% 5. 5% 3. 5% 10. 2% 7. 6% 6. 3% 2. 0% 8. 4% 7. 4% 5. 7% Cochise County Sierra Vista (Jul 2007) (May 2007) (Oct 2009) (Dec 2009) (Jun 2011) * U. S. March 2016; AZ & CC February 2016; SV December 2015

Local Labor Market Outlook • Upside Bottom must be around here somewhere Fort Huachuca—worst is likely over (for now) Canyon Vista Medical Center Economic • development efforts Downside Quite possibly not at the bottom

Retail Sales Growth (%) Sierra Vista Cochise County Arizona 2016* 1. 8 -10. 3 2. 1 2015 4. 9 2. 4 8. 8 2014 -1. 6 -1. 0 1. 9 2013 3. 5 1. 5 7. 3 2012 -1. 0 4. 5 2011 -5. 5 -1. 2 7. 1 2010 -1. 5 -4. 8 -3. 1 2009 -1. 4 -4. 2 -10. 7 2008 -6. 6 -6. 5 -13. 1 2007 2. 6 -1. 3 4. 3 Inflation-adjusted to CPI-U *January only

Restaurant & Bar Sales Growth (%) Sierra Vista Cochise County Arizona 2016* 12. 6 10. 8 16. 0 2015 7. 3 3. 9 5. 1 2014 0. 1 1. 4 7. 3 2013 -5. 3 -0. 5 2. 2 2012 -9. 5 -4. 4 5. 0 2011 2. 8 -0. 2 2. 1 2010 3. 1 0. 0 1. 8 2009 2. 1 0. 3 -5. 4 2008 -2. 0 0. 2 -6. 2 2007 2. 9 0. 1 -0. 2 Inflation-adjusted to CPI-U *January only

Accommodations Sales Growth (%) Sierra Vista Cochise County Arizona 2016* 5. 9 -9. 3 -9. 2 2015 20. 4 8. 2 12. 2 2014 17. 4 -0. 6 9. 9 2013 -28. 3 -12. 2 0. 4 2012 -28. 2 -17. 2 1. 7 2011 -10. 1 -13. 1 2. 0 2010 11. 0 8. 3 0. 8 2009 -2. 0 -9. 0 -16. 5 2008 19. 4 1. 0 -8. 4 2007 21. 1 19. 7 1. 4 Inflation-adjusted to CPI-U *January only

Sales Outlook • Retail Sierra Vista: solid rebound Countywide: instability, but positive outlook Restaurant • & Bar Sierra Vista: New openings have given boost (but not likely sustainable) Countywide: Increased tourism will help Accommodation Sierra Vista: Likely decline from last year’s strong growth Countywide: Increased tourism will give a boost

Home Sales (site-built only) 2 000 1 800 1 600 1 807 1 495 1 400 1 291 1 044 1 000 878 800 600 733 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sierra Vista Area Cochise County

Median Home Price (site-built only) $280 000 $260 000 $240 000 217 479 $220 000 206 579 $200 000 $180 000 162 500 $160 000 $140 000 $120 000 150 000 147 617 148 500 137 200 132 000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sierra Vista Area Cochise County

Foreclosures (% of sales; site-built) 35 30, 0 30 24, 7 25 20, 8 20 27, 6 25, 2 24, 6 24, 8 22, 5 18, 7 17, 7 14, 0 15 11, 4 11, 5 10 7, 0 3, 8 5 0 26, 4 25, 5 0, 7 1, 5 0, 9 1, 1 1, 8 2, 3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sierra Vista Area Cochise County

400 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 New Home Construction 1 400 1 265 1 200 1 000 800 689 600 240 200 81 209 136 110 59 Sierra Vista Cochise County

500 0 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sierra Vista New Home Construction 700 689 600 429 410 400 300 200 100 54 59

New Commercial Construction Millions (Sierra Vista) $70 $61, 3 $60 $55, 3 $50 $40 $30 $20 $10 $0 $6, 2 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Real Estate & Construction Outlook • Foreclosures Upward pressure on sales Downward pressure on prices Dampened demand for new construction • Population declines = downward pressure on sales & new construction • Tribute • Villages at Vigneto

Conclusion Recession Ø Ø Kept out of 2008 -09 recession by Fort Huachuca Ø Cochise County recession began in 2011 Ø Downside Ø Government declines at all levels Ø Population losses Ø Upside Ø Canyon Vista Medical Center Ø Improving state and national economies will help tourism Ø Foreclosures and home values improving Ø Economic development efforts

THE END Cochise. Economy. com