National & Regional Economic Outlook

Transcription

1 National & Regional Economic Outlook The Alliance Bank Business Outreach Center 2014 Economic Outlook Conference November 6, 2014 Ronald J. Gunderson Professor of Economics Northern Arizona University

2 A Few Bright Spots Gasoline prices have dropped sharply Retail sales should improve as a result New job creation is better this year than in several years Consumer Confidence is up! 2

3 Consumer Confidence Index Date Index October September October Most Recent Low February Most Recent High October Source: The Conference Board, October 2014 (90.0 represents healthy conditions) 3

4 The Current Picture Wages are not keeping up so income hasn t rebounded Millions of persons are working part-time even though they would like to be full-time It is taking longer to find jobs (structural unemployment) People are still struggling with mortgage debt Source: Boak & Rugaber, AP Economics Writers. August 1,

5 Wealth Without Workers; Workers Without Wealth We are in the midst of an economic revolution, but this is not our first experience with a revolutionary environment. Source: The Economist, October 4,

6 Industrial Revolution The 19 th century industrial revolution transformed the human condition, but for the typical wage-earner, this meant hard labor in crowded, disease-ridden cities. It was nearly 100 years before the typical worker benefited from the revolution. Source: The Economist, October 4,

7 Digital Revolution Today s digital revolution is creating a similar situation worldwide, but we don t have 100 years to find a solution. Source: The Economist, October 4,

8 Technology Changes Technology has destroyed a large number of medium-skilled jobs Increased the number of persons competing for lower-skilled jobs, while expanding the range of tasks that can be automated Workers are competing against each other and against machines! Source: The Economist, October 4,

9 A Bold Response Raise the productivity and employability of the less-skilled. Revamp education, not just for the young, but adults need lifetime learning to keep up. This will increase employability, but further advances in technology will keep wages low. Source: The Economist, October 4,

10 The Future The market system thrives on finding new ways to do old things! Joseph Schumpeter called this: Creative Destruction Unless a market society continues to provide solutions to the downsides that accompany the benefits of new technology, Schumpeter felt capitalism will disappear. 10

11 Regional Economic Trends Flagstaff & Northern Arizona

12 Total Employment Change (Sept. 2014/2013) Region Increase in Total Employment Sept. 2014/2013 Arizona 67,500 Phoenix MSA 54,000 Flagstaff MSA 800 Lake Havasu/Kingman MSA 1,300 Prescott MSA 1,700 Rest of State 9,700 Source: Arizona Office of Population and Employment Statistics, October 16,

13 Employment Change Sept. 2014/2013 Flagstaff MSA Sector % Change in Employment Total Nonfarm Employment 0.5% Manufacturing 4.7% Construction & Natural Resources (4.8%) Trade/Transportation & Utilities (2.0%) Leisure & Hospitality (5.8%) Government 5.4% Source: Arizona Office of Population and Employment Statistics, October 16,

14 Employment Change Sept. 2014/2013 Lake Havasu City - Kingman MSA Sector % Change in Employment Total Nonfarm Employment 0.4% Manufacturing (3.6%) Construction & Natural Resources (4.0%) Trade/Transportation & Utilities 1.9% Leisure & Hospitality 1.8% Government 0% Source: Arizona Office of Population and Employment Statistics, October 16,

15 Employment Change Sept. 2014/2013 Prescott MSA Sector % Change in Employment Total Nonfarm Employment 1.2% Manufacturing 3.1% Construction & Natural Resources 2.3% Trade/Transportation & Utilities 5.2% Leisure & Hospitality (4.9%) Government 1.9% Source: Arizona Office of Population and Employment Statistics, October 16,

16 Flagstaff Real Estate (Overall market) Median Single Family Home Price* September $359,900 September $305,000 September $274,700 May $399,750 (peak median price) *The median price is often not the best measure because it largely reflects which part of the market is moving. Source: Flagstaff Real Estate News, Ann Heitland, Remax Peak Properties, Various Issues. 16

17 Flagstaff Single Family Homes Median Sales Price Median Price ($) (September) 392, , , , , , , , ,

18 Flagstaff Real Estate (Overall Flagstaff Regional market) Supply of Homes (Sept. 2014/2013) $0 $200,000 fell from 2.1 months to 2.0 months $200,000 $300,000 rose from 2.8 months to 3.4 months $300,000 $400,000 stayed the same at 4.4 months Flagstaff is still a sellers market up to $400,000. The number of homes for sale in September rose 6.5% from a year ago. Source: Flagstaff Real Estate News, Ann Heitland, Remax Peak Properties, Various Issues. 18

19 Annual Single Family Home Sales Overall Flagstaff Market Year # of Homes Sold % Change in Homes Sold 2014 (9 mo s) 613 (9 mo s) No change % % % (5.1%) % (17.5%) (12.2%) Source: Northern Arizona Association of Realtors for Flagstaff Region; reported in monthly reports in Real Estate News, Ann Heitland,REMAX Peak Properties 19

20 Flagstaff Business Activity (FY 2015) Taxable Sales July-September Taxable Business Activity Percent Change from previous year Total Business Activity w/o Utilities 6.6% Auto Sales 11.3% Construction 17.4% BBB 7.2% Other Retail 1.8% Source: City of Flagstaff Sales Tax Division

21 Flagstaff Tax Revenues Total w/o Utilities Percent From Previous Year FY FY FY FY FY FY '15 (3 MO'S)

22 Flagstaff Tax Revenues Auto Sales Percent From Previous Year FY FY FY FY FY FY '15 (3 MO'S) 22

23 Flagstaff Tax Revenues Construction Contracting Percent From Previous Year FY FY FY FY FY FY '15 (3 MO'S)

24 Flagstaff Tax Revenues BBB (Hotels, Restaurants) Percent From Previous Year FY FY FY FY FY FY '15 (3 MO'S) 24

25 Cost of Living of Flagstaff vs. Other AZ Metro Regions 3 rd Qtr Metro Region ACCRA Cost of Living Index Flagstaff Lake Havasu City Prescott/Prescott Valley 97.4 Phoenix/Mesa 95.7 Tucson 96.8 Source: ACCRA Cost of Living Index. National Average =

26 Increased NAU Student Enrollment NAU Enrollment Mountain Campus Fall ,134 Fall ,320 Fall ,431 Fall ,761 Fall ,529 Fall ,032 Total increase since 2009: 4,102 students or >25% Source: NAU Office Planning and Institutional Research