Economic and Workforce Indicators

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Economic and Workforce Indicators

• April 30, 2009
• Mary Vanis, Director
• John Catapano, Coordinator of Research and
  Communications

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U.S. Economic Overview

• The recession appears to be reaching its zenith.
  Every day brings more bad news. Fear dominates
  our collective psyche.
• The U.S. has been in recession since December 07,
  already making it one of the longest of the
  post-war period
• Projections are for a severe contraction
  lasting into second half 09, and maybe into 2010
  - so much for the Great Moderation
• The first seven years of this decade were a
  period of easy money, credit is now contracting,
  and asset prices are tumbling
• Stock market down 50, home prices down 12
  nationwide, oil down from over 140 per barrel to
  around 50
• Arizona has been hard hit, entering recession
  before the U.S. and likely exiting after

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Arizona Economy Update

• Greater Phoenix Metro employment at 1.77 M in
  March, 09 and is down 7.1 from March, 08
• Fourth largest year-over-year employment loss
  among metros, behind Los Angeles, New York City,
  and Detroit, for January, 09
• Metro unemployment up to 7.2 in March, Arizona
  7.8, U.S. 8.5
• In 08 Arizona ranked 48th in job growth among
  states. In 06 it ranked 2nd

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Employment Growth in Greater Phoenix 2006
Present
Percent Change, Year Ago
Recession Begins
Greater Phoenix U.S.
2007
2008
2009
2006
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Employment in Greater Phoenix March to March
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Arizona Industry Sectors

• Arizona exports to the world up 2.7 in 2008 and
  4.9 in 2007
• Manufacturing employment statewide down 5.3
  (March to March)
• Intel, Honeywell, Banner Health are some of the
  larger employers who will be downsizing over the
  next several months
• Positive Growth in Federal Government (5.3),
  Hospitals (3.1), Local Government Education
  (3.1), Aerospace (2.5), and Nursing and
  Residential Care (2.0)
• Negative Growth statewide Construction (-27.9),
  Employment Services (-27.5), Furniture Stores
  (-22.9), Truck Transportation (-10.1), and
  Telecommunications (-8.1).

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Economic Indicators

• Retail sales plunged at double digit rates over
  the final quarters of 2008, with the hardest hits
  in auto, furniture sales, contracting,
  telecommications, restaurants/bars and
  entertainment
• Housing troubles affecting American consumers
  means fewer sales of durable goods to fill the
  homes and less access to credit and declining
  sales tax revenue
• Sun Belt states where housing markets have been
  hit the hardest include Arizona, California,
  Florida and Nevada
• State population growth projected to be in the
  1.2-1.3 range in 08 and 09, down from 3.6 in
  05 and 06

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Housing Market

• Median price of an existing single family home in
  Greater Phoenix is down 35.5 from Q4 07 to Q4
  08. We led the nation in home price declines
  February, 08 to February, 09 down 35.2
• About 40 of all present home sales in Greater
  Phoenix are repossessions or foreclosures
• Residential building permits are down 85 from
  their October 2005 peak. On par with declines
  during previous recession
• Conservatively, there is a surplus of 40,000 to
  50,000 housing units in Greater Phoenix above
  normal demographic demand
• Home sales are up from November 2007 low, many
  are foreclosures, but money is flowing into the
  market again

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Bright Spots

• The Feds have been proactive Stimulus (787B),
  home mortgage modification (275B), TALF (up to
  1T), Public-Private Investment Program
  (75-100B)
• Inflation is under control. Energy prices are
  down. Deflation might now be a concern
• Stock Market is up 25 since March. Have we seen
  the bottom?
• Mortgage rates are at historic lows, housing
  affordability is high
• Consumer confidence is improving
• Arizonas business cycle will rebound by mid-2010
  with growth returning, but employment wont reach
  2007 levels until 2012
• Long term growth prospects for Arizona remain
  strong. State population expected to be 15
  million by 2040. Employment will double as 3.7
  million new jobs are added

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Bright Spots Stimulus Package

• Workforce Investment Act
• 750 million available nationwide for worker
  training and placement in high growth and
  emerging industry sectors
• Funds for unemployment insurance modernization
  being considered by the State of Arizona
• National Science Foundation - 100 million
  available nationwide for STEM education at all
  levels, with 25 million dedicated for math and
  science partnerships
• Additional areas with potential for job training
  include Health Care, Teacher Technology Training,
  and Head Start

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• Questions?
• www.maricopa.edu/workforce

The Maricopa County Community College District is
an EEO/AA institution.