Mitchel Allen, VP, Business Development March 16, 2017 1
2 THE GREATER PHOENIX ECONOMIC COUNCIL
GREATER PHOENIX About the Greater Phoenix Economic Council (GPEC) 3 Our mission is to attract and grow quality businesses and advocate for Greater Phoenix's competitiveness. We are supported by Maricopa County, 23 cities and towns, and more than 170 private-sector investors. GPEC has assisted more than 690 businesses as they relocate and expand to the region. GPEC has helped bring in more than $13.2 billion in capital investment since its inception in 1989. GPEC has brought 123,000+ jobs to the region over the past 27 years.
GREATER PHOENIX GPEC SERVICES 4 IN-DEPTH MARKET DATA & ANALYSIS Analysis of current wage rates, labor force, skill levels based on occupation and industry, etc. OPERATIONAL COST ANALYSIS Comparisons across major markets with analysis of transportation, real estate, tax incentives, labor costs, etc. CONNECTIVITY TO KEY RESOURCES Introductions to colleges, universities, workforce assets, state and local regulatory authorities, job training programs, startup resources, business leaders, etc. SITE-SELECTION ASSISTANCE Listing of value-based assets, unique buildings and shovel-ready sites INTERNATIONAL ASSISTANCE Translators and help with EB-5 immigration (in partnership with the state), etc. ECONOMIC IMPACT ANALYSIS Evaluation of your project s economic impact and community benefit.
GREATER PHOENIX Where Companies Go To Scale 5 FAVORABLE BUSINESS ENVIRONMENT IDEAL LOGISTIC POSITION TALENTED, DIVERSE WORKFORCE GREATER PHOENIX STRENGTHS & ADVANTAGES STABLE CLIMATE AND OPERATING ENVIRONMENT STRONG CULTURE OF ENTREPRENEURSHIP ABUNDANT WATER, ENERGY AND NATURAL RESOURCES
OUR REGION 6
40 ALBUQUERQUE LAS VEGAS 7 60 GREATER PHOENIX COMMUNITIES CAREFREE LOS ANGELES 303 51 101 202 GREATER PHOENIX REPRESENTS 76% OF THE STATE S ECONOMY 85 202 SKY HARBOR INTERNATIONAL AIRPORT 347 202 60 Distance in Miles 0 5 10 SAN DIEGO 8 TUCSON
GREATER PHOENIX Market Size (2016) 8 GREATER PHOENIX 4,569,800 MARICOPA COUNTY 4,152,800 WEST VALLEY 818,700 PHOENIX 1,554,100 EAST VALLEY 1,820,907
GREATER PHOENIX Market Growth (2026) 9 GREATER PHOENIX Will grow by 20.5% to 5.5 million MARICOPA COUNTY Will grow by 19.6% to 4.9 million WEST VALLEY 995,700 PHOENIX 1,821,800 EAST VALLEY 2,164,802 21.6% 17.2% 18.9%
ECONOMIC UPDATE 10
GREATER PHOENIX Post-Recession Job Growth 2000.0 Jobs in Thousands 1900.0 1800.0 1700.0 1600.0 1500.0 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Greater Phoenix lost 300,500 jobs between peak employment in December 2007 and the low point in July 2010 Since July 2010 the metropolitan region has regained 278,000 jobs Jobs are now at pre- Recession levels Source: ADOA Office of Employment and Population Statistics, July 2016, not seasonally adjusted, preliminary numbers
GREATER PHOENIX Job Recovery Forecast 2,300.0 2,200.0 2,100.0 2,000.0 1,900.0 1,800.0 1,700.0 1,600.0 Jobs are now at pre- Recession levels Bottomed out in 2010, began picking up in 2012-2013 The University of Arizona Economic and Business Research Center is forecasting 3.4 percent job growth from 2017 to 2018 in the Greater Phoenix region 1,500.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Projected Non-Farm Employment Growth Source: University of Arizona Economic Business and Research Center, July 2016
GREATER PHOENIX Industry Impact Industry Job Loss Peak to Trough % Decline Total Nonfarm -300,500-15% Construction -74,900-47% Professional and Business Services -58,300-18% Retail Trade -45,400-18% Government -43,600-17% Manufacturing -24,500-18% Leisure and Hospitality -23,300-12% Wholesale Trade -11,300-13% Other Services -10,300-14% Transportation and Utilities -10,000-14% Finance and Insurance -7,100-6% Real Estate, Rental, and Leasing -6,400-16% Information -3,800-12% Natural Resources and Mining -500-14% Sectors with Job Losses During the Recession Construction, Professional and Business Services, and Retail experienced the largest job losses, totaling 178,600 jobs The construction industry lost almost half its workforce, declining by 47% Education and Health Care were the only industries to gain employment during the recession Source: Bureau of Labor Statistics, July 2016
GREATER PHOENIX Industry Gain Industry Job Gains in Recovery % Growth Total Nonfarm 278,000 17% Professional and Business Services 62,900 23% Health Care and Social Assistance 47,600 24% Leisure and Hospitality 39,200 23% Retail Trade 31,800 16% Finance and Insurance 29,300 28% Construction 27,100 33% Information 11,200 41% Transportation and Utilities 9,600 16% Manufacturing 9,300 8% Educational Services 5,900 15% Real Estate, Rental, and Leasing 5,700 16% Other Services 1,900 3% Wholesale Trade 1,600 2% Natural Resources and Mining 200 7% Sectors with Job Gains Post Recession Since July 2010 all sectors except for Government have had an increase in jobs Professional and Business Services, Health Care, Leisure and Hospitality, and Retail Trade have each gained more than 30,000 jobs Consumption and service-oriented industries have led the region s recovery Source: ADOA Office of Employment and Population Statistics, July 2016, not seasonally adjusted, preliminary numbers
GREATER PHOENIX Job Growth 140% 120% 100% 80% 60% 40% Advanced Consumption Total Consumption industries (construction, real estate, retail, and tourism) have grown 93% since 1985 Advanced Industries have grown only 43% over the same time period 20% 0% 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 Index: 100% = Total Employment in 2010 Change in Greater Phoenix Employment by Industry Since 1985 Source: Moody s Analytics
GPEC FY17 Activity 16 24 locates 5,258 jobs $944.4M cap ex Tolleson Chandler Goodyear Tempe Tempe Phoenix Casa Grande Avondale
GEOGRAPHIC POSITION 17
GREATER PHOENIX Geographic Position: Air 18 Phoenix Sky Harbor International Airport 40 million passengers annually 2,100 daily domestic and international flights Phoenix-Mesa Gateway Airport and 8 additional general aviation airports Major cargo carriers from Sky Harbor include: American Airlines Ameriflight British Airways Delta Airlines DHL FedEx Southwest Airlines United/Continental UPS
GREATER PHOENIX Geographic Position: Air 19 Phoenix Sky Harbor International Airport one-stop and nonstop flights to: Amsterdam, NL Barcelona, ES Berlin, DE Brussels, BE Calgary, CA Cancun, MX Copenhagen, DK Dublin, IE Edinburgh, UK Edmonton, CA Frankfurt, DE Geneva, CH Guadalajara, MX Hamburg, DE Hermosillo, MX Hong Kong, CN Ixtapa/Zihuatanejo, MX Lisbon, PT London, UK Los Cabos, MX Lyon, FR Madrid, ES Manchester, UK Mazatlán, MX Mexico City, MX Munich, DE Paris, FR Puerto Vallarta, MX Seoul, KR Shanghai, CN Stockholm, SE Sydney, AU Tokyo, JP Toronto, CA Vancouver, CA Zurich, CH
TRADE IN ARIZONA 20
ARIZONA Trade with Mexico 21 $16.8B 100,000 $7.8M in Arizona-Mexico total trade during 2015 Arizona jobs are supported by trade with Mexico spent by visitors from Mexico daily According to the Arizona-Mexico Commission
ARIZONA Top 5 Trade Markets 22 $9,162M $7,640M Exports in millions of dollars Imports in millions of dollars $2,651M $1,266M $2,303M $1,511M $1,066M $830M $670M $778M Mexico China Canada United Kingdom Germany
BUSINESS ATTRACTION 23
BUSINESS DEVELOPMENT FY17 Prospect Activity 24 PROSPECTS BY OPERATION TYPE PROSPECTS BY REGION Warehouse/ Distribution 17 R&D 5 Health Services 3 Data Center 3 Advanced Administrative/Back Office, 39 Light Manufacturing 38 Advanced/High Tech Manufacturing, 10 Entry Level Administrative/Call Center 14 Heavy Manufacturing 13 Headquarters Office 6 39 adv. administrative prospects in FY17; down from 52 in FY16. 6 headquarters prospects in FY17; down from 9 in FY16. 51 manufacturing prospects in FY17; up from 49 in FY16. 32% of prospects are from California. 27 international prospects; including 3 from Canada, 3 from China and 8 from Europe.
BUSINESS ATTRACTION Site Selection Factors 1 Availability of Skilled Labor 6 Available Buildings 2 Highway Accessibility 7 Corporate Tax Rate 3 Labor Costs 8 State & Local Incentives 4 Occupancy or Construction Costs 9 Low Union Profile 5 Availability of Advanced ICT Services 10 Energy Availability & Costs
COST COMPARISON Greater Phoenix vs. Inland Empire 26 Assumptions: $5,000,000 personal property investment 600,000 square foot industrial warehouse, lease utilities (per month): electricity demand/usage: 500KW, 150,000KWh, natural gas usage: none, water usage: 3,000cf, 5/8 meter 150 jobs METRO EMPLOYEE PAYROLL BENEFITS UTLITIES REAL ESTATE PROPERTY TAX OPERATING COST INDEX Phoenix $7,405,670 $1,996,252 $202,041 $2,808,000 $112,320 $12,524,283 100.0% Inland Empire $7,936,570 $2,587,731 $307,636 $3,816,000 $57,850 $14,705,787 117.4% Cost savings of $2,181,504
27 ECONOMIC DEVELOPMENT PROGRAMS
GREATER PHOENIX Competitive Economic Development Programs 28 ARIZONA S POLICYMAKERS HAVE CONSISTENTLY LOWERED TAXES Corporate income tax rate (currently 4.9% from 5.5% in 2016) Sales factor for export-oriented business currently at 90% will increase to 100% by 2017 Arizona s unique additional depreciation schedule allows companies to aggressively accelerate the depreciation of personal property value over 5 years. COMPETITIVE ECONOMIC DEVELOPMENT PROGRAMS Quality Jobs Tax Credit Program Qualified Facilities Refundable Tax Credit Program Foreign Trade Zones
29 THANK YOU gpec.org GPEC4JOBS Address 2 N. Central Ave., Suite 2500 Phoenix, AZ 85004 @GPEC Contact Info info@gpec.org Greater Phoenix Economic Council Telephone (602) 256-7700 GREATER PHOENIX: WHERE COMPANIES GO TO SCALE