O C T O B E R 2 0 0 0 Alberta H. Charney, Ph.D. Research Economist Q & A ABOUT STATE INCOME TAXES A referendum to eliminate Arizona’s income taxes was recently removed from the November ballot by a Superior Court Judge. Supporters are expected to appeal the court’s decision and they have promised to try again, if their appeal is unsupported. The following questions and answers are designed to provide some insights into this debate. Which states don’t have an individual income tax? Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming do not have individual income taxes. In addition, New Hampshire’s and Tennessee’s state income tax is limited to dividends and interest income.1 New Hampshire and Tennessee are included in tables as not having a state income tax, but are denoted with an asterisk. Do the states without an individual income tax still have a corporate income tax? Some do and some don’t. Alaska, Florida, New Hampshire, and Tennessee have corporate income taxes. Texas, Washington and Wyoming do not. South Dakota imposes corporate income taxes on banks.2 F A L L higher sales tax rates or excellent alternative tax bases that make up for their lack of an income tax, given that they rank 12, 8, 15, and 20th, respectively, in per capita state tax revenue. Four of the states without a state income tax rank dead last in terms of per capita state tax revenue: Tennessee, Texas, South Dakota and New Hampshire (47, 48, 49, and 50th, respectively). If these states don’t levy state income taxes, where do they get their tax revenue? Arizona’s share of revenues derived from the individual income tax is already 21% below the national average (Table 2). Each of the states without an income tax has at least twice as high a percentage in “other” revenue sources, so they have had to look for alternative, perhaps non-traditional, forms of revenue sources. Alaska receives 63% of its revenue from “other,” which in their case is the severance tax on oil. Wyoming derives 41.4% from “other,” which is mostly mineral related: severance taxes on crude oil, natural gas and coal; mineral royalties. Even part of their property tax is based on mineral assessments.3 The state of Washington has a state property tax, imposed on all property in Washington, with the proceeds designated for education.4 New Hampshire and Alaska impose very high corporate income taxes relative to other states in the U.S. Both receive almost a quarter of their revenues from this source. Nevada receives almost 85% of its state tax revenues from the state sales tax or selected Where does Arizona’s per capita state tax revenue rank among other states? Arizona’s per capita state tax revenue is $1,488, which places Arizona 42 among all 50 states in per capita state tax revenue (Table 1). Even with a state income tax, Arizona’s per capita state tax revenue ranks 42nd among the 50 states. Clearly Alaska, Washington, Nevada and Wyoming have either EL L E R CO LL E GE OF B US I NE S S A N D PU B LI C AD M IN I ST R ATI O N I S S U E TABLE 1 Per Capita State Tax Revenue and Rank, by State State Per Capita Alaska $ 1,932 Rank 12 Florida $ 1,509 41 Nevada $ 1,848 15 New Hampshire* $ 851 50 South Dakota $ 1,130 49 Tennessee* $ 1,288 47 Texas $ 1,246 48 Washington $ 2,075 8 Wyoming $ 1,779 20 Arizona $ 1,488 42 U.S. Average $ 1,761 sales taxes. This high sales tax revenue is undoubtedly linked to gaming and their hefty hotel/motel/bed taxes and taxes on restaurants to capture their extremely high tourist expenditures. Nevada has gaming taxes, percentage fees and a casino entertainment tax that, when combined, exceeds their general sales tax collections.5 Although the state of New Hampshire shows no general sales tax in this table, their reliance on selective sales tax is very high. They have a communication services tax of 5.5 percent, a meals and rentals tax of eight percent, a $.75 per $100 real estate transfer tax and a $.52 per pack tobacco tax. They also have a state education property tax of $6.6 per $1,000 equalized value, a utility property tax and a local property tax.6 I N S I D E NEW ECONOMY PARTNERSHIP UPDATE ..........6 BANK ONE ENDOWMENT ......6 FORECAST UPDATE ...............7 FORECAST TABLES ..............10 ECONOMIC INDICATORS ......11 Without an income tax, at what level do states impose their sales tax? Five out of the nine states with no income tax have sales rates that are at least 20% greater than Arizona’s (Table 3): Nevada and Washington have state sales tax rates that are 30% higher than Arizona’s; Texas’ sales tax rate is 25% higher than Arizona’s; Tennessee and Florida’s sales tax rates are 20% higher than Arizona’s. So far, this information has dealt only with state tax revenues. That is only part of the picture because each state has different ways of allocating fiscal responsibility among state and local governments. How do the states compare when both state AND local revenue are considered? Arizona is well below the U.S. average in both Total Own Source Revenue (17% below) and Total Taxes (12% below) (Table 4). Without it’s 28.6% of state taxes coming from the individual income tax (Table 2), Arizona’s per capita state and local revenues fall by $518 (26.8% of the per capita state tax revenue in Table 1). That would result in Arizona’s per capita state and local tax revenue falling to $1,777 (subtract $518 from the $2,295 in (Table 4). This figure would put Arizona well below Tennessee, which is currently ranked 50th in per capita state and local tax revenues. Although New Hampshire was ranked 50th in state tax revenues, it ranks 33rd in state and local per capita tax revenues, three rankings higher than Arizona. This means that New Hampshire shifts the bulk of its fiscal responsibility to local governments. How do state and local governments share fiscal responsibility in states without an income tax? Florida, New Hampshire, Texas and, to a lesser extent, Tennessee have shifted substantially more fiscal responsibility onto local governments than Arizona (Table 5). Alaska, with its oil revenues, shifts relatively little financial responsibility to its local governments. Arizona already relies more on the general sales tax and less on the individual income tax than other states, on average (Table 6). New Hampshire funds most of its public services out of local property taxes. PAGE TWO TABLE 2 1998 State Tax Collection by Source (percentage of total) State Property Tax Alaska 4.1 Sales Tax Selective Sales Tax — Individual Income Tax 9.8 Corporate Income Tax Other 23.2 62.8 — Florida 4.4 57.4 17.8 — Nevada 2.2 54.9 30.0 — New Hampshire* 0.1 — 49.4 5.6 6.1 — 14.8 — 12.8 23.4 21.0 4.6 16.1 8.7 13.0 South Dakota — 53.1 26.2 Tennessee* — 57.6 18.5 Texas — 50.6 30.1 — Washington 17.3 58.5 15.0 — — 9.1 Wyoming 11.6 39.2 7.9 — — 41.4 2.3 — 19.3 Arizona 3.6 43.9 13.8 26.8 7.6 4.3 US Totals 2.2 32.9 15.0 33.9 6.5 9.4 TABLE 3 State Sales Tax Rates by States — for those states with no income tax, January 1, 2000 (excludes local sales tax rates) Alaska none Florida 6.0% New Hampshire* none (food and prescription drugs exempt) Nevada 6.5% (food and prescription drugs exempt) South Dakota 4.0% (prescription drugs exempt) Tennessee* 6.0% (prescription drugs exempt) Texas 6.25% (food and prescription drugs exempt) Washington 6.5% (food and prescription drugs exempt) Wyoming 4.0% (prescription drugs exempt) Also, tax rate may be adjusted annually according to a formula based on balances in the unappropriated general fund and the school foundation fund. Arizona 5.0% (food and prescription drugs exempt) TABLE 4 1996 State and Local Revenue State Total Own Source Revenue† Per Capita Rank Total Taxes Per Capita Alaska $ 11,880 $ 3,791 1 Rank 4 Florida $ 3,565 26 $ 2,330 29 New Hampshire* $ 3,234 36 $ 2,254 33 Nevada $ 3,802 14 $ 2,661 16 South Dakota $ 2,936 48 $ 1,965 46 Tennessee* $ 2,832 50 $ 1,878 50 Texas $ 3,192 39 $ 2,218 41 Washington $ 4,050 11 $ 2,795 11 Wyoming $ 4,729 4 $ 2,422 25 Arizona $ 3,096 43 $ 2,295 30 US Average $ 3,724 † $ 2,597 Total Own Source Revenue is inclusive of all taxes and also includes a) current charges for services, such as for education, hospitals, parks, and b) miscellaneous general revenue, such as interest, special assessments or sale of property. ARIZONA’S ECONOMY TABLE 5 1996 State and Local Own Source Revenues TABLE 6 1996 State and Local Taxes by Source (percentage of total) (percentage of total) State Local Alaska 80.5% 19.5% Florida 47.8% 52.2% New Hampshire* 45.1% 54.9% Nevada 54.9% 45.1% South Dakota 55.4% 44.5% Tennessee* 51.6% 48.4% Texas 48.9% 51.1% Washington 59.4% 40.6% Wyoming 58.1% 41.9% Arizona 56.6% 43.4% US Average 55.6% 44.4% What general conclusions can be drawn from Tables 1-6? Arizonans have several choices if income taxes are eliminated: a.We can miraculously find and quickly develop new natural resources (like Alaska and Wyoming). b.We can legalize gambling (Nevada). c. We can raise the sales tax rate by 20-30% (Florida, Nevada, Tennessee, Texas, Washington) and still not make up the difference. d.We can combine a higher sales tax rate with a new state property tax (Washington, New Hampshire). e. We can shift fiscal responsibility to local governments (Texas, Tennessee, New Hampshire, and Florida), consequently shifting the burden in Arizona primarily onto local property taxes. f. Arizona can fall to dead last in per capita own source total state and local revenues (below South Dakota and Tennessee, ranked 48th and 50th, respectively). Would local governments be hurt fiscally if the state individual and corporate income taxes were eliminated? Absolutely. Local governments would be hurt both directly and indirectly. Local governments would be hurt indirectly because fiscal responsibilities inevitably would be shifted from the state to local government entities. Incorporated cities and towns would lose ARIZONA’S ECONOMY Property Tax General Sales Tax Selective Sales Tax Individual Income Corporate Income Other Alaska 29.6 4.7 5.7 0.0 14.2 45.9 Florida 35.2 35.1 17.3 0.0 3.0 9.4 Nevada 20.6 38.8 26.3 0.0 0.0 14.3 New Hampshire* 67.4 0.0 16.4 2.0 6.9 7.4 South Dakota 38.8 35.1 13.3 0.0 2.6 10.2 Tennessee* 22.7 46.5 14.3 1.1 5.3 10.0 Texas 37.5 32.3 18.4 0.0 0.0 11.8 Washington 30.2 46.8 13.6 0.0 0.0 9.4 Wyoming 37.4 31.8 6.2 0.0 0.0 24.6 Arizona 30.6 34.0 10.7 14.7 4.4 5.6 US Average 30.4 24.5 11.6 21.3 4.6 7.5 money directly because currently they receive 15% of the individual and corporate income tax collections. According to Arizona Revised Statute 43-201 (Urban Revenue Sharing Fund), an amount equivalent to 12.8% of the net proceeds of state income taxes (individual and corporate) collected two fiscal years prior to the current fiscal year shall be credited to the Urban Revenue Sharing Fund for sharing revenues with incorporated municipalities. Each city or town receives a share of this fund in the proportion their population bears to the total population based on the last U.S. decennial or special census. The percentage for FY 2001 and beyond is supposed to increase to 15% of net income tax receipts. This was supposed to have already happened, but was postponed.7 Aren’t sales taxes “better” than individual income taxes because we can “export” sales taxes when tourists and other visitors buy things in Arizona? It is true that some sales taxes are “exported” when out-of-staters make purchases in Arizona. But the proportion exported is not as high as people may think. For Pima County, it has been estimated that only between 13% and 20% of the sales tax is exported to people out of the area.8 It is also true that many other taxes are also exported out of the area/state. Property taxes are exported, for example. All property taxes paid by corporations whose assets are held by non-Arizonans are exported (manufacturing facilities, destination resorts, etc.). Property taxes paid by non-residents are exported (e.g. owners of apartment buildings, commercial properties, land, etc.). Property taxes paid by snow-birds on condominiums and homes are exported. In addition, when a local business sells to out-of-state visitors, the price of the items sold should reflect all costs, including the property taxes paid by the business owner. Therefore, just as with the sales tax, a portion of the property tax is exported out-of-state when sales are made to visitors. The individual income tax is also “exported,” although the word “shifted” is more appropriately applied. A significant portion of our individual income tax is actually paid by the Federal Government. Arizona’s individual income taxes are deductible from taxable income on our federal income taxes for those that itemize. This means that the Federal Government pays a portion of our individual income tax. The average marginal federal income tax rate for Arizonans who itemize is probably greater than 28%. Therefore, more than 28% of the state income taxes paid by Arizonans who itemize on their federal income tax form is shifted to the Federal Government. If we eliminate the state tax, itemizers will have to pay more than 28% of what they would have paid to the state to the Federal Government. Note that sales taxes are not deductible from federal taxable income. Property taxes are deductible from federal taxable income, so they are both exported in a manner similar to sales taxes and shifted to the Federal Government in a manner similar to income taxes. In 1997, 633,956 out of the 1,966,894 Federal Income Tax returns filed by Arizonans PA GE TH RE E itemized. And those itemizers deducted $2,828,832,000 in Arizona state and local taxes from their Federal Taxable Income. This figure includes a) Arizona state income taxes, b) local property taxes, and c) the vehicle license (in lieu property) tax. Itemizers’ federal taxable income is approximately 70.3% of total federal taxable income.9 Assume that these federal income tax itemizers also account for 70.3% of Arizona taxable income. Then Arizona is currently shifting approximately 28% of 70.3% of $2.1 billion (in Arizona individual income taxes), or $413 million, to the Federal Government. Therefore, we as Arizonans will lose the ability to shift almost 20% of our individual income taxes to the Federal Government as our Federal tax bill increases. Proponents of eliminating Arizona’s income tax believe that additional growth in the economy will provide new sales tax revenues to entirely replace lost income taxes in only five years? How reasonable is this assumption? This assumption is not reasonable at all. Tables 7 and 9 present Arizona tax collections from the individual income tax, the corporate income tax and the transaction privilege (sales) tax. Tables 8 and 10 show TABLE 9 Arizona Sales Tax Collections 1998-1999, est. $ 3,119,641,322 1997-1998 $ 2,863,786,084 Some may argue that by giving back the $2,097,696,461 in state income taxes, the state would generate additional sales tax as Arizonans respend the money. This is nonsense. When the state government and its agencies make purchases, they pay state sales taxes on those expenditures. Furthermore, the state government pays state employees who pay sales taxes. Therefore, no additional sales taxes will be generated from the money not paid in state income taxes. Also, as was discussed earlier, Arizonans will have to pay higher Federal income taxes if the state income tax is repealed. If the corporate income tax were also eliminated, Arizona’s taxable sales would have to grow 85% in five years, or 13.1% per year, compounded. This is the result of $3,119,641,322 having to grow to $3,119,641,320 + $2,097,696,461 + TABLE 7 Arizona Individual and Corporate Income Tax Revenues 1998-1999 Individual Income Tax Corporate Income Tax Combined $ 2,097,696,461 $ 545,388,138 $ 2,643,084,599 1997-1998 $ 1,862,514,798 $ 528,061,073 $ 2,390,575,871 1996-1997 $ 1,668,414,355 $ 600,890,432 $ 2,269,304,787 1995-1996 $ 1,494,282,274 $ 448,030,484 $ 1,942,312,758 1994-1995 $ 1,896,299,526 $ 416,711,295 $ 2,313,010,821 1993-1994 $ 1,708,098,853 $ 302,616,297 $ 2,010,715,150 1992-1993 $ 1,606,910,521 $ 239,269,405 $ 1,846,179,926 1991-1992 $ 1,448,985,875 $ 211,445,624 $ 1,660,431,499 1990-1991 $ 1,435,328,781 $ 191,672,481 $ 1,627,001,262 1989-1990 $ 1,174,472,787 $ 178,067,102 $ 1,352,539,889 1996-1997 $ 2,688,797,389 Source: State of Arizona 1995 Tax Handbook, 1996-98 Tax Handbook Supplement, 1999 Tax Handbook Supplement, Joint Legislative Budget Committee 1995-1996 $ 2,554,305,344 TABLE 8 Distribution of Arizona’s Individual and Corporate Income Tax Revenues Source: State of Arizona 1995Tax Handbook, 1996-98 Tax Handbook Supplement, 1999 Tax Handbook Supplement, Joint Legislative Budget Committee TABLE 11 Projections for Arizona Population (000’s) Personal income ($million) Per capita personal income ($) Per capita real personal income ($2000) b 1998-1999, est. 2000 2005 4,976.3 5,555.6 % State General Fund Voluntary Contribution Funds $ 340,310,656 12.88% $ 2,302,026,675 $ 680,268 1997-1998 $ 291,243,578 12.18% $ 2,098,733,397 $ 598,896 1996-1997 $ 257,800,548 11.36% $ 2,010,937,159 $ 567,080 1995-1996 $ 218,543,272 11.25% $ 1,723,080,577 $ 697,909 124,064.3 162,995.4 TABLE 10 Distribution of Arizona’s Sales Tax 24,931.2 24,931.2 29,388.8 26,618.3 Computed using information from projections and a two percent annual inflation rate. PA GE F OU R Urban Revenue Sharing (Cities) Source: State of Arizona 1995 Tax Handbook, 1996-98 Tax Handbook Supplement, 1999 Tax Handbook Supplement, Joint Legislative Budget Committee Source: The Forecasting Project, Arizona’s Economy, April 2000, Economic and Business Research Program, Eller College of Business and Public Administration, the University of Arizona. b how those state revenues are distributed between the state general fund, cities, counties and voluntary contribution funds (these contributions are checked on our income tax forms). We can use 1998-1999 figures in Tables 7-10 to answer the question: “How fast would Arizona have to grow for the growth in sales taxes to make up for the revenue lost from repeal of the state income tax?” If only the individual income tax were repealed, Arizona’s taxable sales would have to grow 67% in five years. That’s an average annual compound growth rate of 10.8% (i.e., (1.108)5 = 1.67). This is the result of $3,119,641,322 (sales tax collections, Table 9) having to grow to $3,119,641,322 + $2,097,696,461, or $5,217,337,783 (the sum of the sales tax collections and the individual income tax collections, Table 7). 1998-1999, est. State General Fund % Counties % Cities % $ 2,417,022,363 77.48% $ 434,484,720 13.93% $ 268,134,239 8.60% 8.66% 1997-1998 $ 2,214,266,900 77.32% $ 401,648,941 14.03% $ 247,870,243 1996-1997 $ 2,074,663,192 77.16% $ 379,767,613 14.12% $ 234,366,584 8.72% 1995-1996 $ 1,965,939,340 76.97% $ 363,833,107 14.24% $ 224,532,897 8.79% Source: State of Arizona 1995 Tax Handbook, 1996-98 Tax Handbook Supplement, 1999 Tax Handbook Supplement, Joint Legislative Budget Committee ARIZONA’S ECONOMY TABLE 12 Five-year and Annual Growth Rates Required for Arizona Taxable Sales to make up the Revenue Loss of Eliminating the Income Tax, Under Different Circumstances Controlling for Population Growth and Inflation No population growth, no inflation, level of government services held constant Population growth of 11% over five years, no inflation, per capita level of government services held constant Population growth of 11% over five years inflation of 2% per year, per capita level of government services held constant Eliminate individual income taxes 67% over five years or 10.8% annually 85% over five years or 13.6% annually 105% over five years or 15.5% annually Eliminate individual and corporate income taxes 85% over five years or 13.1% annually 105% over five years or 15.5% annually 127% over five years or 17.8% annually 96% over five years or 14.4% annually 118% over five years or 16.8% annually 140% over five years or 19.2% annually Which taxes will be eliminated Eliminate individual and corporate income taxes and hold cities and towns harmless $545,388,138, or $5,762,725,921 (the sum of the sales tax, the individual income tax and the corporate income tax collections). But it could be worse than this. When the Arizona State Legislature makes a tax change, they usually hold cities and counties “harmless.” That is, they assure cities and counties that their revenues will not decrease. In 1998, incorporated cities and towns received an estimated $340,310,656. Thus, if both the individual and corporate income taxes were eliminated and cities and towns were held “harmless,” Arizona’s taxable sales would have to grow 96% over five years, or 14.4% per year, compounded. This is the result of $3,119,641,322 having to grow to $5,762,725,921 (sum of sales, individual income and corporate income taxes), plus the amount distributed to the Urban Revenue Sharing Fund ($340,310,656, Table 8), or $6,103,036,527. And worse yet — all these computations assume either that a) there will be no population growth (and therefore no need for additional government services) or b) government services won’t grow to accommodate the new population; rather, existing levels of government services will be spread over the expanded population base. These computations will be explored below in more detail, taking into account population growth. And even worse — these computations assume there will be no inflation affecting the cost of providing government services. Further calculations will take inflation into account. How fast is Arizona’s personal income projected to grow over the next five years? According to data obtained from the Forecasting Project at the UA Eller College, Arizona’s personal income is expected to grow approximately 31% from 2000 to 2005, or 5.6% per year (Table 11). But in order to AR IZON A ’S ECON O MY generate that growth in income, population will also have to grow. Population is projected to increase by 12% from 2000 to 2005 (or 2.2% per year) and all those people will require additional state and local government services. When projected personal income is divided by projected population, per capita income will grow by only 18% ((29,388.8/24,931.2 - 1)*100) over five years, or 3.3% per year. Furthermore, inflation will eat away more than ten points of that 18% growth in per capita income from 2000 to 2005 (assuming an inflation rate of two percent annually). When deflated real per capita income is computed, its growth rate is only 6.8% over five years, or 1.3% per year. In other words, real per capita income is projected to grow by 1.3% per year, but state sales tax revenues must grow by 67% over five years or 10.8% annually to make up for the loss of the individual income taxes. And this 10.8% annual growth must occur with no population growth and no inflation, in order to maintain the current level of public services. Table 12 summarizes the five-year and annual growth rates required to make up the loss of revenue caused by the elimination of the income tax. Three different cases are considered: elimination of the individual income tax, elimination of both the corporate and individual income tax, and elimination of both income taxes combined with holding incorporated cities and towns harmless. The required growth rates are computed under the assumptions of: no population growth and no inflation, population growth but no inflation, and both population growth and inflation. CONCLUSIONS Arizona does not have high incomes taxes when compared to other states. Elimination of the income tax will require Arizonans to make some difficult choices. Arizona does not have the taxable natural resource base of Alaska and Wyoming, nor are Arizonans likely to legalize gambling as in Nevada. If Arizonans want to maintain revenue levels following the elimination of the income tax, we will have to raise the sales tax rate by 20-30% (Florida, Nevada, Tennessee, Texas, Washington) and combine it with a new state property tax (Washington, New Hampshire). Or, we can shift fiscal responsibility to local governments (Texas, Tennessee, New Hampshire, Florida), consequently shifting the burden in Arizona primarily onto local property taxes. Alternatively, if Arizonans do not want to attempt to maintain current levels of state and local spending, Arizona will fall to dead last in per capita own source total state and local revenues (below South Dakota and Tennessee, ranked 48th and 50th, respectively). Contrary to statements made by some of the proponents of eliminating the state income tax, Arizona’s state sales tax revenues cannot “grow” to make up the loss of the income tax revenues. Further, eliminating the state income tax is equivalent to paying the Internal Revenue Service an additional amount equivalent to more than 20% of what Arizona currently collects in income tax collections. ■ 1 2 3 4 5 6 7 8 9 The Federation of Tax Administrators. The Federation of Tax Administrators. Wyoming State Legislature Website, Budget/Fiscal: http://legisweb.state.wy.us/budget/fiscal/jupdate.htm State of Washington’s Department of Revenue Website: http://dor.wa.gov/index.asp?//wador.htm State of Nevada Home Page, General Fund Revenue Summary: http://www.state.nv.us/budget/revenue.htm. State of New Hampshire, Department of Revenue Administration, Overview of New Hampshire Taxes: http://www.state.nh.us/revenue/gti-rev.htm Source: State of Arizona 1995 Tax Handbook, prepared by the Joint Legislative Budget Committee, State of Arizona, and the 1996-98 and 1999 Supplements. Source: “Tax Exportation of the Proposed Half-Cent County Excise Tax.” Final Report to Pima County Government, October 1998, by Alberta H.Charney, Ph.D. Estimate, derived from IRS, Statistics of Income Bulletin, Spring 1999. PA G E F IV E NEW ECONOMY PARTNERSHIP UPDATE By Marshall J. Vest Director, Economic and Business Research and Member of the Governor’s Arizona Partnership for the New Economy Task Force The New Economy Partnership is in full swing—and you can participate! In November of 1999, Governor Jane D. Hull created the “Arizona Partnership for a New Economy” (APNE) Task Force. Its objectives are to 1) define the New Economy and its importance to Arizona, 2) assess Arizona’s current readiness and establish benchmarks for measuring progress, and 3) develop strategies for correcting perceived deficiencies in responding to opportunities.1 Five “Hot Teams” have been assembled to identify and “create breakthroughs that would vault the state into a position to join the top tier of leading New Economy states.” The teams are: 1 Knowledge Leaders, Entrepreneurs and Capital. Knowledge builds wealth, and regions that invest in and orchestrate their knowledge Bank One Gift Endows New Outreach Initiatives at Eller College Thanks to a $900,000 gift from Bank One to the Eller College’s Campaign for the New Century, the Eller College is launching two new initiatives that expand the College’s outreach efforts. Bank One (and its predecessor, Valley National Bank) is a long-time supporter of the Eller College and the Economic and Business Research Program. “We are delighted to partner with Bank One to bring these important economic topics to the public,” said Eller College dean Mark Zupan when announcing the gift. The first initiative is a series of seminars for the Arizona business community. The Eller College/Bank One Business Forums will address state, local, national and international issues that affect the economic health of Arizona’s residents and businesses. Organized by Professor Gerald Swanson, an award-winning teacher and author, the forums will be presented three times per year. The inaugural forum, scheduled for October 25th, will address Arizona’s tax issues (see ad). The second forum, scheduled for spring 2001, will focus on the “New Economy” and what it means for Arizona businesses. Can Arizona compete in the New Economy? What needs to be done from a policy perspective to enable success? In June, a mid-year economic update forum, with a review of national factors and Arizona’s economy, will be featured. A second initiative provides a new web site for the Economic and Business Research Program (EBR). For more than fifty years, EBR has served as the source for information concerning the Arizona economy. The web site, ebr.eller.arizona.edu, is designed for the general public and contains commonly requested information, such as the inflation rate, unemployment, job growth, retail spending patterns, and other aggregate measures. From the site, visitors can access current metrics, read an interpretation of the data by EBR researchers and follow links to detailed data/descriptions from the originating agency. Also, recent publications, including the award-winning Arizona’s Economy newsletter, are available in PDF format. PAGE SIX assets—intellectual talent, business, universities, and other research institutions—will prosper most. Research and development, technology transfer, research universities, venture capital, incubation and entrepreneurship are major topics for this team. 2 E-Learning and New Talent. Growing, retaining and attracting talent require developing flexible, customized education and ongoing training. E-Learning transforms the format and content of the learning enterprise and offers the opportunity to deliver the best curriculum to all Arizonans, on their terms, regardless of barriers they face. K-12 education, worker The Inaugural Eller College/Bank One Business Forum Arizona’s Tax Structure: The Good, the Bad, and the Ugly UA economist Gerry Swanson will lead an exploration of the pressing tax issues facing the State of Arizona. How does Arizona compare to other states in the areas of income, sales, and property taxation? Is Arizona’s tax structure a hindrance or help in promoting economic growth? What would happen if we eliminated the state income tax? How do you decide whether a tax is a good tax or a bad tax? Learn the answers to these and other tax policy questions by attending this free Forum. The Forum will conclude with a reception and light refreshments. Wednesday, October 25, 2000 Berger Auditorium McClelland Hall, 1130 E. Helen Street 4:00 pm-6:00 pm Parking is available at a nominal fee in the visitors’ area of the Park Avenue Garage (enter on Park Ave., just north of the 7-11 store). ARIZONA’S ECONOMY (or incumbent) training, executive education, and distance learning are major topics. 3 E-Government. Responsive, seamless government is customer-driven and focused on reducing transactions costs. Faster, better government is the goal. New Commerce and Creative Communities. Creating the physical and regulatory environments where new commerce will thrive and knowledge workers want to live and work is the focus here. Quality of life, downtown development, and tax policy are major topics. 4 5 Building Connections to Opportunity. Access and advanced WHAT SLOWDOWN? By Marshall J. Vest Forecasting Project Director August 25, 2000 O nce again we’ve revised our forecasts upward for the near term. The economy may be slowing—but not so much that anyone could notice! In fact, Arizona’s economy has strengthened in recent months and has moved into first place in the job growth derby. Personal income estimates also were revised significantly upward recently to show Arizona as a leader. We’ve pushed the onset of slower growth in our forecast into 2001. This quarter, we present our annual update of 25year projections. Here too, the results are higher than those obtained one year ago. Arizona’s year 2025 population is now projected at 8.3 million, up from 5 million today. Real GDP increased at a phenomenal 5.2% rate during the second quarter, demonstrating in convincing fashion that the desired “soft landing” remains but a forecast. Measured on an over-the-year basis, real growth was 6.0%, and that is the fastest in 16 years! White hot or red hot—the economy is still smoking! Even so, inflation remains subdued and has actually cooled in recent months. How is this possible? Productivity gains are AR IZON A ’S ECON O MY communications infrastructure are vital to success in the knowledge economy. The digital divide that prevents full participation of all residents must also be addressed through education and skills development. Telecommunications infrastructure, small business, rural Arizona, Canada-Mexico, and the digital divide are major topics. Each of the hot teams is working to identify “breakthrough” ideas and develop action plans by the end of October. This is an inclusive process and everyone can participate. You can follow the teams and offer your insights through the APNE website: www.azcommerce.com/new economy/APNE.htm. A self-assessment survey tool that allows you to evaluate your organization’s readiness to participate in the New Economy will soon be available from the same site. By completing this survey, you 1) will understand whether your company is participating fully in the New Economy and 2) identify New Economy practices that you may wish to incorporate. Additionally, you can nominate your organization for a New Economy Success Story Award! This tool is in beta-test as this is being written, but should be available soon. ■ the answer. In the second quarter, productivity grew by 5.1%, again the strongest yearover-year gain in 17 years. Given the stunning increase in productivity, unit labor costs actually fell during the past year, and that precludes inflation from taking root. If productivity can grow by three percent and the labor force by one percent, that means that the potential for non-inflationary growth (the economy’s speed limit) is four percent! Arizona is once again the fastest growing state in the country. Its economy is being propelled by strong employment growth in its two largest metro areas. In recent months, metro Tucson has led the nation as the fastestgrowing metro area. Phoenix-Mesa continues as the perennial second-fastest large metro economy and ranks number eight among all 290 labor markets as of May, according to the Blue Chip Job Growth Update published by Arizona State University. In July, year-overyear job growth was 4.5%, 5.9%, and 4.1% in Arizona, Tucson and Phoenix, respectively. Expansions and new business operations announced during the second quarter were the most significant since the 1996-98 period. Among the largest (number of new jobs in parentheses) are Prudential Real Estate and Relocation (1500), Charles Schwab (1000), MFS Investment Management (900), Spectrum Astro Inc. (800), Arthur Anderson (500), and a host of smaller firms. All the aforementioned are in the Phoenix metro area. In Tucson, the largest announcements are Sprint (450), Advanced Ceramics Research Inc. (300), Slim-Fast Foods (150) and four firms with 100 employees: Universal Avionics, Aristocrat Technologies, Inc., Walbro Engine Management, and Cybernetic Research Laboratories. Sierra Vista has one large new job generator, SIGNAL Corp, with 500. Arizona’s manufacturing sector is growing again with nearly 4500 jobs added during 1 Information for this section was gleaned from the “Arizona Partnership for a New Economy” website, maintained by the Arizona Department of Commerce at: http://www.azcommerce.com/neweconomy/APNE.htm. EXHIBIT 1 R&B Sales Rival the Strongest This Decade Restaurant & Bar Sales Growth, AZ EXHIBIT 2 Residential Permits Stronger in 2nd Quarter (seasonally adjusted 6-per mov avg) PAGE SEVEN EXHIBIT 3 Revisions Significantly Higher EXHIBIT 5 A Soft Landing Lies Ahead Personal Income Growth, AZ Annual Change in Population & Jobs, AZ the past year (1.5% growth). Half of the new manufacturing jobs were in the Tucson area, where aerospace, instruments, and optics continued to expand rapidly. Construction jobs have trended downward since February but less than 3000 have been lost on a base of 160,000; over-the-year comparisons still show a gain of 2000. Education (up 8.8%), services (up 6.6%), and TCPU (up 5.1%) are the fastest growing sectors over the past year. Help wanted advertising rose to a record level in metro Phoenix during June, which reflects very strong demand for workers. Also, the survey of production and orders conducted by the Purchasing Management Association shows that both measures soared in the second quarter to the highest readings since 1997, prior to the Asian meltdown. This is terrific news for Arizona manufacturers. Arizona consumers remain ebullient, and their confidence, as measured by Phoenixbased Behavior Research Center, remained high in the third quarter, down about four points from the all-time high established in the second quarter. As a result, consumer spending, as measured by retail sales, continued very strong, up 10.5% on an over-theyear basis. Restaurant and bar sales were up a strong 9.1%, rivaling the strongest readings registered during the entire decade of the 1990’s (Exhibit 1). Indicators for housing markets generally strengthened during the second quarter. Both single family and total permits increased as mortgage rates fell from 8.5% to below eight percent. Total units authorized by permits, on a seasonally adjusted basis, increased during both the first and second quarters, but totals for the first half were down by 8.1% from one year ago (Exhibit 2). Resale housing in the metro Phoenix area has been on a plateau for the past year at roughly 57,000 sales per year, but in June sales rose to a new record. In Tucson, June sales were ten percent below year-earlier, but still at a high level and above the level for February. Activity in housing markets and for new construction remains at very high levels and is moving upward. We expect permitting activity to remain strong until year-end as developers rush to win approval on projects so as to hedge their bets if voters approve the Citizens Growth Management initiative. EXHIBIT 4 Arizona Ranks Third Personal Income Growth, 00Q1/99Q1 PERSONAL INCOME REVISED SHARPLY UPWARD New estimates released on May 17 show significantly higher and stronger estimates for Arizona personal income. The total for 1998 was revised upward by $4.9 billion, or 4.5%, to $113 billion. The new numbers show that personal income grew by 8.7% during 1998 rather than 7.9% as originally PAGE EIGHT published. Revisions were equally large for 1997. Estimates were revised all the way back to 1969 (Exhibit 3). Preliminary estimates for 1999 now show growth of 7.0%, a significant slowing from the prior year. Growth then jumps back to 8.7%, year-over-year, in 2000Q1. Although restructuring in the copper mining industry and mine closings by BHP in the second half of 1999 negatively affected wage and salary disbursements, there is a good chance that the 1999 estimates will be revised upward. Compared to other states, Arizona ranked 7th among all states for personal income growth in 1999, following a ranking of 3rd in 1998. The 8.7% gain in the first quarter puts Arizona back in third place, behind Washington and Colorado (Exhibit 4). The upward revisions result mainly from methodological improvements and new sources of data from federal administrative records. The most significant change involved treating government employee retirement plans the same way as private pension plans. Employer contributions to these plans boosted amounts for “other labor income,” and dividends and interest received by the plans boosts “dividends, interest and rents.” Personal contributions to the plans are no longer included in “personal contributions for social insurance,” an amount that is deducted in the calculation of personal income. These three components account for the lion’s share of the upward revision. Offsetting these components, transfer payments were revised downward by a significant amount, reflecting benefits paid to government employees that are no longer considered as transfers to persons. A detailed description of conceptual changes is presented in the June 2000 issue of the Survey of Current Business (“Comprehensive Revisions of State Personal Income” p 64). THE OUTLOOK FOR 2000 AND BEYOND Barring any unforeseen shocks, the national and Arizona economies should continue strong through year-end. The effects of higher short-term interest rates (up 1.5% since June of 1999) have yet to slow the economy, but should do so as the year wears on. At least one more rate boost is expected, but not until after the November elections. The WEFA Group forecasts a soft landing—growth in real GDP of 5.1% this year, followed by 3.8% in 2001. During the next five years Real GDP is expected to increase at an average 3.6% per ARIZONA’S ECONOMY EXHIBIT 6 Forecasts to 2025 Arizona W&S Employment (000s) Population (000s) Personal Income ($ millions) Retail Sales ($ millions) 1995 2000 2005 2010 2015 2020 2025 1,795 4,297 88,871 37,664 2,253 4,979 131,324 54,417 2,591 5,607 172,918 68,060 2,935 6,231 225,448 88,144 3,329 6,901 294,049 114,472 3,747 7,589 376,742 146,164 4,198 8,300 477,972 185,070 1,225 2,662 59,756 24,981 1,589 3,141 91,226 38,014 1,811 3,562 122,399 48,291 2,035 3,976 164,294 64,456 2,319 4,424 229,643 88,392 2,642 4,894 323,002 121,881 3,029 5,397 459,174 170,146 303 758 15,019 6,302 357 870 21,068 8,557 401 964 28,025 10,722 438 1,051 36,615 13,483 483 1,146 49,147 17,313 531 1,240 65,746 22,129 578 1,327 87,482 28,176 Phoenix-Mesa MA W&S Employment (000s) Population (000s) Personal Income ($ millions) Retail Sales ($ millions) Tucson Metro Area W&S Employment (000s) Population (000s) Personal Income ($ millions) Retail Sales ($ millions) year, compared to 4.3% during the past five years. The consumer price index remains at 2.5%. In like fashion, Arizona’s economy should continue to pace the nation through the rest of this year. We expect gains of 8.3% for personal income, 8-8.5% for retail sales, employment growth of 4.4%, and slightly lower but near last year’s record levels for homebuilding. Next year promises continued expansion, but at a slower pace. In 2001, we expect a 6.6% gain for personal income, 4.0% for retail sales, 3.5% job growth, and a 15-20% decline in residential permits. That would put permits at the same level as 1994’s 50,000 units, far higher than the 23,000 low points of 198991 at the depths of the last recession. See forecast table, page 10. Over the next five years, Arizona’s population should swell by 630,000 (to more than 5.6 million) and some 340,000 jobs will be created. This reflects annual growth rates of 2.4% and 2.8%, respectively. Both reflect below average rates of growth as the economy comes in for a soft landing (Exhibit 5). By the year 2025, Arizona will be home to some 8.3 million people, compared to five million today. Phoenix will account for 5.4 million and Tucson 1.3 million. In 2025, Arizona will have roughly as many people as today’s North Carolina and Georgia (the nation’s 10th and 11th largest states). Phoenix will compare to today’s Detroit and Dallas-Fort Worth metro areas (Exhibit 6). RISKS TO THE OUTLOOK According to an analysis by Elliott D. Pollack, a Scottsdale-based economic and real estate consultant, the Citizens Growth Management Initiative (CGMI) that will appear A R IZ ON A’ S E CO N OMY on the November ballot presents a significant threat to the economy. His analysis forecasts a virtual halt to development within a few months of passage, skyrocketing real estate prices, and the loss of one out of every ten jobs. This represents a huge shock to the economy that would dwarf the real estate depression Arizona suffered during the late-80’s. Backers of the initiative, primarily the Sierra Club, argue that the there will be little if any effect on the economy. We have not prepared our own analysis, nor do we offer an alternative scenario that embraces these risks. However, we have built into our forecasts the effect that the measure will have on permitting activity in the near term. Whether the initiative passes or not, the threat of passage will spur builders to obtain permits for their projects before November. So, permitting activity will receive an artificial boost in coming months as developers rush to beat the deadline, which will borrow from permitting in 2001. In the longer term, passage is expected to drive up housing prices, thereby slowing migration and economic growth, as Arizona becomes an exclusive place to live. Passage also promises to put Arizona’s economy on a roller coaster (making it much harder to predict) as the brakes are first applied, then released, then applied again as limits are reached. ■ S P O N S O R S Arizona Joint Legislative Budget Committee Arizona Portland Cement Arizona Public Service Company Bank One Arizona CB Richard Ellis City of Tucson Coldwell Banker Success Realty Compass Bank Elliott D. Pollack and Company Estes/Kaufman and Broad Jim Click Automotive Team Merrill Lynch Northern Trust Bank of Arizona Pima County Qwest Communications Qwest Dex Salt River Project Territorial Newspapers Tucson Electric Power Company Tucson Healthcare Council Tucson Newspapers The University of Arizona Eller College of Business and Public Administration’s 2001-2002 Economic Outlook Luncheon Friday, December 15th, Noon - 2pm Westin La Paloma, Tucson Presentations by: Marshall J. Vest Economic and Business Research Program Gerald J. Swanson Economics Department Mark Zupan Dean, Eller College of Business and Public Administration $45 per person; $425 per table of 10* Reservations required.Call 621-2930 for information and reservations. *Fee is not a charitable contribution. PAGE NINE F O R E C A S T Forecasts for Arizona Personal Income ($ mill) percent change Per Capita Personal Income percent change Aggregate Retail Sales ($ mill)* percent change Population (000s, mid-year) percent change Net Migration (000s) Wage & Salary Employment (000s) percent change Goods-Producing percent change Construction percent change Manufacturing percent change Service-Providing percent change Trade (Wholesale & Retail) percent change Services percent change Forecasts for Phoenix-Mesa Metro Area Personal Income ($ mill) percent change Per Capita Personal Income percent change Aggregate Retail Sales ($ mill)* percent change Population (000s, mid-year)” percent change Net Migration (000s) Wage & Salary Employment (000s) percent change Goods-Producing percent change Construction percent change Manufacturing percent change Service-Providing percent change Trade (Wholesale & Retail) percent change Services percent change Forecasts for Tucson Metro Area Personal Income ($ mill) percent change Per Capita Personal Income percent change Aggregate Retail Sales ($ mill)* percent change Population (000s, mid-year) percent change Net Migration (000s) Wage & Salary Employment (000s) percent change Goods-Producing percent change Construction percent change Manufacturing percent change Service-Providing percent change Trade (Wholesale & Retail) percent change Services percent change 1995 88,870.5 8.4 20,682.0 5.1 37,664.1 7.9 4,297.0 3.1 97.8 1,795.4 6.1 326.3 6.9 119.7 11.8 193.7 3.9 1,469.0 5.9 444.5 5.6 519.1 7.7 1995 59,755.7 9.5 22,444.7 6.2 24,981.4 8.7 2,662.3 3.2 57.4 1,224.9 7.3 238.8 8.5 84.8 15.6 148.3 4.2 986.1 7.0 305.5 7.1 365.2 10.1 1995 15,019.3 5.9 19,814.3 2.9 6,302.4 3.7 758.0 3.0 17.4 302.7 3.8 49.6 8.8 19.3 3.2 28.0 15.7 253.1 2.9 67.8 1.4 91.3 3.8 2000 131,324.3 8.3 26,374.0 5.3 54,417.1 9.0 4,979.3 2.8 93.0 2,253.4 4.4 384.4 2.1 158.4 2.9 215.8 2.2 1,869.0 4.9 534.2 4.3 717.0 6.0 2000 91,226.0 8.3 29,044.4 5.1 38,014.1 11.2 3,140.9 3.1 62.6 1,589.4 4.6 291.4 2.7 114.8 3.6 173.3 2.8 1,298.0 5.0 386.2 4.9 512.0 5.8 2000 21,068.3 8.8 24,218.8 5.8 8,557.2 9.2 869.9 2.9 19.3 357.4 5.0 58.1 5.1 22.0 5.1 34.6 6.1 299.3 5.0 75.6 4.9 118.4 6.2 2001 139,956.9 6.6 27,373.8 3.8 56,620.3 4.0 5,112.8 2.7 88.0 2,332.8 3.5 387.2 0.7 156.6 -1.2 220.2 2.0 1,945.6 4.1 560.6 4.9 751.6 4.8 2001 97,978.5 7.4 30,317.5 4.4 39,280.8 3.3 3,231.7 2.9 59.0 1,643.7 3.4 290.9 -0.2 111.5 -2.9 176.2 1.7 1,352.7 4.2 401.6 4.0 536.5 4.8 2001 22,669.0 7.6 25,393.7 4.9 8,997.7 5.1 892.7 2.6 17.8 369.8 3.5 60.1 3.3 22.7 3.1 35.6 3.0 309.7 3.5 78.4 3.7 124.5 5.2 T A B L E S 2002 148,165.2 5.9 28,275.5 3.3 59,434.3 5.0 5,240.1 2.5 81.9 2,402.5 3.0 387.8 0.2 153.4 -2.1 223.9 1.7 2,014.7 3.6 585.7 4.5 781.7 4.0 2002 103,966.2 6.1 31,341.1 3.4 41,328.0 5.2 3,317.3 2.6 53.4 1,688.9 2.8 289.4 -0.5 107.8 -3.3 178.3 1.2 1,399.5 3.5 415.8 3.5 556.6 3.8 2002 24,092.3 6.3 26,393.5 3.9 9,457.4 5.1 912.8 2.3 15.0 380.1 2.8 60.8 1.3 22.9 0.9 36.1 1.3 319.3 3.1 81.2 3.5 129.5 4.1 2003 156,359.9 5.5 29,152.3 3.1 62,463.3 5.1 5,363.5 2.4 79.0 2,467.4 2.7 390.2 0.6 152.3 -0.7 227.2 1.5 2,077.3 3.1 607.5 3.7 809.0 3.5 2003 110,227.9 6.0 32,425.0 3.5 44,021.0 6.5 3,399.5 2.5 50.2 1,729.7 2.4 288.8 -0.2 105.3 -2.3 180.3 1.1 1,440.9 3.0 427.9 2.9 573.9 3.1 2003 25,446.2 5.6 27,330.9 3.6 9,910.6 4.8 931.0 2.0 13.0 387.7 2.0 61.2 0.6 22.8 -0.3 36.5 1.1 326.6 2.3 83.2 2.5 133.2 2.8 2004 164,533.6 5.2 29,994.3 2.9 65,201.7 4.4 5,485.5 2.3 77.9 2,530.3 2.5 396.2 1.5 153.2 0.6 232.3 2.2 2,134.1 2.7 624.6 2.8 835.3 3.3 2004 116,376.2 5.6 33,434.6 3.1 46,231.6 5.0 3,480.7 2.4 49.4 1,771.4 2.4 291.7 1.0 104.8 -0.5 183.6 1.9 1,479.7 2.7 437.6 2.3 591.7 3.1 2004 26,752.3 5.1 28,220.7 3.3 10,323.4 4.2 948.0 1.8 11.6 394.5 1.8 61.5 0.5 22.7 -0.5 36.9 1.0 333.1 2.0 84.6 1.7 136.7 2.6 2005 172,917.7 5.1 30,840.7 2.8 68,060.5 4.4 5,606.8 2.2 76.8 2,591.2 2.4 403.2 1.8 155.5 1.5 237.0 2.0 2,188.0 2.5 639.0 2.3 861.1 3.1 2005 122,398.5 5.2 34,364.8 2.8 48,290.6 4.5 3,561.7 2.3 49.1 1,811.0 2.2 295.7 1.4 106.3 1.4 186.1 1.3 1,515.3 2.4 445.3 1.8 608.7 2.9 2005 28,024.6 4.8 29,063.2 3.0 10,722.1 3.9 964.3 1.7 10.9 400.6 1.5 61.9 0.6 22.7 0.1 37.2 1.0 338.7 1.7 85.7 1.3 139.9 2.3 Compound Annual Growth Rates 95-00 00-05 95-05 8.1 5.7 6.9 5.0 3.2 4.1 7.6 4.6 6.1 3.0 2.4 2.7 -1.0 4.6 -3.8 2.8 -2.4 3.7 3.3 1.0 2.1 5.8 -0.4 2.7 2.2 1.9 2.0 4.9 3.2 4.1 3.7 3.6 3.7 6.7 3.7 5.2 95-00 00-05 95-05 8.8 6.1 7.4 5.3 3.4 4.4 8.8 4.9 6.8 3.4 2.5 3.0 1.7 5.3 -4.7 2.6 -1.6 4.0 4.1 0.3 2.2 6.3 -1.5 2.3 3.2 1.4 2.3 5.7 3.1 4.4 4.8 2.9 3.8 7.0 3.5 5.2 95-00 00-05 95-05 7.0 5.9 6.4 4.1 3.7 3.9 6.3 4.6 5.5 2.8 2.1 2.4 2.1 3.4 -10.7 2.3 -4.5 2.8 3.2 1.3 2.2 2.6 0.6 1.6 4.3 1.5 2.9 3.4 2.5 3.0 2.2 2.5 2.4 5.3 3.4 4.4 * Aggregate Retail Sales includes retail, food, restaurant & bars and gasoline sales. Source: Economic and Business Research Program, Karl Eller Graduate School of Management, Eller College of Business and Public Administration, The University of Arizona PAGE 1 T E0N ARIZONA’S ECONOMY A R I Z O N A YUMA METROPOLITAN REGION Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Construction Manufacturing Trans., Comm. & Publ. Util. Trade Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Residential Building Non-Residential Building Non-Building Number of Dwelling Units Awarded, F.W. Dodge Total One Family Houses MOHAVE-LA PAZ REGION Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Mining (Mohave County only) Construction Manufacturing Trans., Comm. & Publ. Util. Trade Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Residential Building Non-Residential Building Non-Building Number of Dwelling Units Awarded, F.W. Dodge Total One Family Houses E C O N O M I C I N D I C A T O R S % change versus year ago for: most most recent recent month 12-months MAR 2000 APR 2000 MAY 2000 JUN 2000 JUL 2000 57,250 47,575 9,675 16.9 63,575 47,225 16,350 25.7 69,200 45,900 23,300 33.7 68,625 45,550 23,075 33.6 68,800 43,875 24,925 36.2 -11.4 -10.4 -13.1 -1.9 -2.8 -2.1 -4.5 -2.1 40,150 2,900 2,450 1,450 11,075 1,100 9,475 11,700 40,050 2,975 2,475 1,425 10,950 1,100 9,425 11,700 38,825 2,975 2,525 1,375 10,100 1,075 9,100 11,675 37,625 3,025 2,475 1,375 10,075 1,050 9,100 10,525 37,025 3,225 2,575 1,350 9,900 1,050 9,050 9,875 -6.2 11.2 13.2 -21.7 -6.8 -8.7 16.4 -24.2 -0.5 10.1 10.0 -9.6 -4.7 -4.8 6.6 -3.7 100,815 75,947 11,310 13,558 8,657 16,742 87,347 67,826 9,597 9,924 6,479 15,894 79,089 59,950 8,244 10,895 7,618 14,482 80,333 63,116 8,338 8,879 6,359 16,952 ... ... ... ... ... ... 9.4 6.6 12.5 29.8 7.4 -5.7 9.2 7.3 5.5 27.8 2.1 0.9 8,778 7,023 1,340 415 7,023 6,696 327 0 10,826 7,151 3,675 0 19,547 7,714 3,366 8,467 15,022 4,781 5,463 4,778 0.4 1.1 -6.0 8.1 -26.5 -20.8 -15.9 -50.8 80 80 81 81 79 79 90 90 60 60 11.1 11.1 -6.5 -16.3 71,450 68,225 3,225 4.5 71,400 68,500 2,900 4.1 72,050 68,925 3,125 4.3 72,400 69,025 3,375 4.7 72,850 69,600 3,250 4.5 1.9 2.0 0.0 -1.9 4.4 5.1 -8.7 -12.4 45,675 100 3,600 3,800 2,250 13,600 1,500 11,400 9,425 45,950 100 3,600 3,875 2,300 13,550 1,600 11,400 9,525 46,275 100 3,675 3,900 2,275 13,650 1,600 11,425 9,650 45,025 100 3,700 3,850 2,325 13,525 1,600 11,450 8,475 44,625 100 3,700 3,875 2,325 13,475 1,600 11,450 8,100 3.5 0.0 6.5 7.6 9.4 2.3 6.7 3.2 0.6 4.6 11.6 6.0 2.5 7.0 2.7 2.6 6.8 4.8 135,633 88,874 14,942 31,817 20,315 23,854 118,348 86,623 14,420 17,305 11,299 24,211 114,350 83,065 13,893 17,392 12,161 23,080 111,975 83,202 13,058 15,715 11,256 39,700 ... ... ... ... ... ... 9.1 7.2 1.5 29.2 6.9 74.0 13.1 9.8 7.3 41.2 13.2 14.9 34,360 18,130 6,856 9,374 17,101 15,449 988 664 49,651 20,393 23,615 5,643 20,612 15,264 2,991 2,357 20,496 15,186 290 5,020 -6.1 -5.8 -88.1 53.8 18.6 2.8 -8.4 123.2 183 181 157 153 194 190 153 151 151 147 -5.0 -1.3 7.4 -4.9 See notes at bottom of Arizona - Quarterly table. ARIZONA’S ECONOMY PAGE ELEVEN A R I Z O N A COCHISE COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Construction Manufacturing Trans., Comm. & Publ. Util. Trade Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Residential Building Non-Residential Building Non-Building Number of Dwelling Units Awarded, F.W. Dodge Total One Family Houses SANTA CRUZ COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Construction Manufacturing Trans., Comm. & Publ. Util. Trade Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Residential Building Non-Residential Building Non-Building Number of Dwelling Units Awarded, F.W. Dodge Total One Family Houses E C O N O M I C I N D I C A T O R S % change versus year ago for: most most recent recent month 12-months MAR 2000 APR 2000 MAY 2000 JUN 2000 JUL 2000 40,075 38,175 1,900 4.7 39,750 38,150 1,600 4.0 40,200 38,500 1,700 4.2 40,550 38,750 1,800 4.4 40,700 38,925 1,775 4.4 0.5 1.8 -22.0 -22.4 3.6 5.3 -23.1 -25.8 32,000 2,200 825 1,275 8,050 700 8,500 10,450 32,075 2,225 850 1,300 8,025 725 8,500 10,450 32,475 2,250 925 1,300 8,150 725 8,500 10,625 32,200 2,250 950 1,325 8,125 725 8,800 10,025 32,325 2,225 925 1,325 8,150 725 8,800 10,175 5.1 1.1 -11.9 6.0 10.5 0.0 5.4 3.8 6.2 9.9 -11.2 1.5 11.7 1.5 13.1 -0.7 58,833 42,559 7,589 8,685 5,545 14,051 61,460 47,781 6,894 6,785 4,430 14,570 59,981 45,996 6,637 7,348 5,138 12,853 59,814 47,226 6,748 5,840 4,183 13,958 ... ... ... ... ... ... 9.2 13.4 6.0 -14.1 -28.9 6.9 9.7 9.2 14.7 8.7 -11.1 33.4 7,422 4,736 2,686 0 17,037 9,409 4,676 2,952 7,934 6,084 1,850 0 46,959 4,283 35,700 6,976 11,803 3,900 138 7,765 -42.0 10.3 -97.4 -32.5 36.7 -10.2 102.0 45.9 49 49 125 45 64 64 48 48 44 44 10.0 10.0 -1.1 -13.7 12,625 11,450 1,175 9.3 12,375 11,425 950 7.7 12,550 11,500 1,050 8.4 13,100 11,400 1,700 13.0 13,325 11,050 2,275 17.1 -1.5 6.3 -27.2 -26.1 -2.3 0.9 -17.0 -15.9 12,000 350 850 1,275 4,525 200 1,650 3,150 12,050 350 850 1,300 4,575 200 1,625 3,150 12,150 350 850 1,275 4,550 200 1,625 3,300 11,800 350 850 1,225 4,550 200 1,650 2,975 11,425 375 825 1,125 4,325 175 1,600 3,000 9.6 0.0 -5.7 0.0 11.6 0.0 4.9 21.2 1.8 -0.6 -7.1 7.4 -2.2 -15.5 5.2 8.4 24,402 18,867 2,521 3,014 1,924 4,241 27,477 21,279 3,375 2,823 1,843 3,261 26,428 20,754 2,885 2,789 1,950 3,689 23,479 18,611 2,390 2,478 1,774 4,921 ... ... ... ... ... ... 3.5 4.1 1.4 1.6 -15.9 -1.6 6.4 5.4 0.7 21.9 -1.0 2.1 4,832 3,282 1,550 0 12,882 11,587 1,295 0 4,414 2,534 1,880 0 3,561 2,751 0 810 9,621 9,111 510 0 91.8 252.5 -65.4 -100.0 2.2 20.2 -35.5 -12.5 32 32 196 28 24 24 31 23 139 31 321.2 40.9 31.9 -6.3 See notes at bottom of Arizona - Quarterly table. PAGE TWELVE ARIZONA’S ECONOMY A R I Z O N A E C O N O M I C GILA COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Mining Construction Manufacturing Trans., Comm. & Publ. Util. Trade Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Residential Building Non-Residential Building Non-Building Number of Dwelling Units Awarded, F.W. Dodge Total One Family Houses GRAHAM-GREENLEE REGION Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Mining (Greenlee County only) Construction Manufacturing Trans., Comm. & Publ. Util. Trade Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Residential Building Non-Residential Building Non-Building Number of Dwelling Units Awarded, F.W. Dodge Total One Family Houses I N D I C A T O R S % change versus year ago for: most most recent recent month 12-months MAR 2000 APR 2000 MAY 2000 JUN 2000 JUL 2000 17,925 16,825 1,100 6.1 17,850 16,950 900 5.0 18,025 17,125 900 5.0 18,150 17,175 975 5.4 18,275 17,300 975 5.3 1.1 3.3 -26.4 -27.2 -1.8 -0.2 -22.1 -20.7 14,575 725 975 1,175 500 3,775 200 2,600 4,625 14,700 725 1,025 1,175 500 3,725 200 2,650 4,700 14,875 725 1,025 1,175 500 3,775 225 2,650 4,800 14,700 725 1,050 1,175 500 3,800 225 2,775 4,450 14,650 725 1,025 1,175 500 3,850 200 2,775 4,400 5.6 3.6 7.9 2.2 0.0 12.4 -11.1 1.8 4.8 0.9 34.4 2.8 -20.5 -9.1 7.5 -11.2 3.5 -1.0 23,845 17,103 3,304 3,438 2,195 6,909 26,287 18,951 3,956 3,380 2,207 6,349 27,373 19,334 3,925 4,114 2,876 7,063 28,502 20,287 4,356 3,859 2,764 6,068 ... ... ... ... ... ... 9.5 8.6 5.7 19.0 -1.5 -23.6 6.4 4.9 4.8 17.0 -4.3 -19.2 5,548 5,428 0 120 8,710 5,113 3,597 0 8,416 5,329 0 3,087 13,709 4,857 0 8,852 7,979 4,252 0 3,727 5.3 32.7 -100.0 -12.7 25.5 12.2 -58.6 272.2 40 36 42 42 39 39 33 33 33 33 50.0 50.0 14.4 12.4 14,550 13,600 950 6.5 14,600 13,750 850 5.8 14,800 13,925 875 5.9 14,625 13,650 975 6.7 14,400 13,450 950 6.6 -2.2 0.0 -25.5 -23.8 -0.4 1.2 -17.3 -17.0 11,125 2,550 575 275 225 2,175 150 1,750 3,425 11,375 2,525 600 275 225 2,175 175 1,825 3,575 11,525 2,525 650 275 225 2,175 175 1,825 3,675 11,075 2,525 650 275 225 2,175 175 1,825 3,225 10,975 2,525 625 275 225 2,150 175 1,825 3,175 2.6 -4.7 4.2 0.0 -10.0 -3.4 16.7 7.4 11.4 1.0 -3.2 -10.0 4.8 -7.3 -3.2 -9.3 7.8 6.9 21,343 16,763 1,811 2,769 1,768 2,721 21,090 17,189 1,869 2,032 1,327 2,604 21,384 17,562 1,841 1,981 1,385 3,012 20,268 16,760 1,827 1,681 1,204 4,002 ... ... ... ... ... ... 6.1 7.3 3.0 -1.9 -18.8 -30.4 10.6 10.0 5.2 22.2 -1.0 -11.2 951 951 0 526 3,726 926 2,800 0 1,097 1,097 0 223 1,535 1,135 400 2,969 2,735 735 2,000 2,680 24.7 40.3 19.8 2250.9 -45.9 5.4 -70.5 42.9 9 9 9 9 10 10 13 13 7 7 0.0 0.0 31.4 -14.9 See notes at bottom of Arizona - Quarterly table. ARIZONA’S ECONOMY PAGE THIRTEEN A R I Z O N A APACHE-NAVAJO REGION Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Mining Construction Manufacturing Trans., Comm. & Publ. Util. Trade Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Residential Building Non-Residential Building Non-Building Number of Dwelling Units Awarded, F.W. Dodge Total One Family Houses COCONINO-YAVAPAI REGION Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Mining Construction Manufacturing Trans., Comm. & Publ. Util. Trade Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Residential Building Non-Residential Building Non-Building Number of Dwelling Units Awarded, F.W. Dodge Total One Family Houses E C O N O M I C I N D I C A T O R S % change versus year ago for: most most recent recent month 12-months MAR 2000 APR 2000 MAY 2000 JUN 2000 JUL 2000 51,775 45,750 6,025 11.6 50,675 45,625 5,050 10.0 51,150 46,100 5,050 9.9 52,175 44,675 7,500 14.4 52,125 44,625 7,500 14.4 -6.5 -4.4 -17.4 -11.6 -3.0 -0.6 -17.3 -14.8 46,900 875 1,900 1,175 2,525 7,175 1,200 7,950 24,100 46,850 875 1,925 1,150 2,525 7,275 1,200 8,000 23,900 47,400 875 2,025 1,125 2,450 7,450 1,200 8,400 23,875 45,175 875 2,000 1,175 2,450 7,700 1,200 8,100 21,675 44,850 875 1,975 1,150 2,500 7,700 1,200 8,075 21,375 -1.8 -5.4 -4.8 -13.2 -2.9 -4.6 -9.4 3.5 -0.9 0.7 -3.2 4.3 -12.1 2.5 -1.1 3.1 5.8 -0.1 77,479 61,671 4,883 10,925 6,975 10,919 67,572 49,529 5,483 12,560 8,201 13,577 72,349 54,209 6,733 11,407 7,976 12,427 93,763 75,442 6,878 11,443 8,196 15,758 ... ... ... ... ... ... 26.4 29.2 0.3 28.1 6.1 22.0 24.6 23.2 5.4 49.7 23.3 14.1 29,965 7,374 12,980 9,611 8,730 7,476 855 399 13,952 8,235 198 5,519 34,871 8,325 2,778 23,768 19,069 11,315 0 7,754 -14.8 24.7 -100.0 33.8 72.2 16.2 81.0 241.1 55 55 54 54 64 64 67 67 84 84 5.0 5.0 -0.9 5.4 126,875 121,650 5,225 4.1 124,900 120,550 4,350 3.5 127,850 123,400 4,450 3.5 132,025 125,900 6,125 4.6 132,425 126,300 6,125 4.6 1.6 2.6 -15.5 -16.8 2.6 3.4 -11.9 -14.1 105,100 925 6,875 5,600 2,675 25,625 2,575 30,275 30,550 106,200 950 6,925 5,650 2,750 25,875 2,575 30,550 30,925 106,375 950 7,125 5,675 2,850 26,375 2,625 31,000 29,775 106,950 975 7,300 5,725 2,875 26,675 2,625 31,775 29,000 106,625 925 7,425 5,775 2,900 26,850 2,600 31,900 28,250 5.5 -5.1 3.5 -0.9 -3.3 1.9 1.0 4.3 14.8 4.6 -1.1 2.6 -3.2 -5.3 2.1 -7.5 8.3 7.9 195,545 138,177 32,950 24,418 15,590 44,973 216,609 150,960 37,506 28,143 18,375 46,457 218,397 153,807 41,032 23,558 16,473 52,565 232,546 164,565 41,909 26,072 18,673 56,062 ... ... ... ... ... ... 9.2 6.1 7.2 38.0 14.2 1.8 15.5 12.2 14.7 45.6 19.4 14.8 52,514 35,776 4,100 12,638 52,840 32,730 6,959 13,151 90,793 47,513 21,234 22,046 97,191 37,061 25,549 34,581 45,420 32,698 6,855 5,867 -11.6 -15.0 -12.0 14.4 -6.5 -10.5 -24.2 25.7 260 254 268 219 328 304 268 252 230 217 -33.3 -8.4 -18.0 1.2 See notes at bottom of Arizona - Quarterly table. PA GE F OU R TEE N ARIZONA’S ECONOMY A R I Z O N A E C O N O M I C PHOENIX-MESA METROPOLITAN REGION (MARICOPA AND PINAL) Civilian Labor Force (000s) ADES Employment Unemployment Unemployment Rate, Seas. Adj. (%) Employees on Nonagricultural Payrolls (000s) ADES Total Mining Construction Manufacturing Durable Nondurable Trans., Comm. & Publ. Util. Trade Wholesale Retail Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Aggregate Retail Sales Retail Food, EBR Restaurants & Bars Gasoline, EBR Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Awards Residential Building Non-Residential Building Non-Building New Housing Units Authorized, Census C-40 Total Units Single Family Units 2-4 Unit Structures 5-plus Unit Structures Housing Sales and Prices, ARMLS Total Sales ($000s) Total Units Average Price ($) Phoenix Skyharbor International Airport, PSIA Total Passengers Total Aircraft Movements I N D I C A T O R S MAR 2000 APR 2000 MAY 2000 JUN 2000 JUL 2000 1590.6 1549.8 40.8 2.7 1591.9 1555.8 36.1 2.5 1596.2 1556.3 39.9 2.6 1600.4 1556.9 43.5 2.6 1601.4 1557.2 44.2 2.6 1.0 1.5 -15.5 -16.1 3.1 3.4 -5.9 -9.5 1578.3 2.9 114.0 164.2 126.4 37.8 82.1 375.1 89.0 286.1 123.2 521.6 195.2 1588.4 2.8 114.8 164.5 126.7 37.8 83.7 377.1 88.9 288.2 123.6 526.0 195.9 1594.2 2.9 115.5 165.1 127.4 37.7 84.1 376.5 89.0 287.5 124.1 525.8 200.2 1572.6 2.9 115.8 165.8 128.1 37.7 85.0 376.1 89.7 286.4 124.5 527.8 174.7 1561.3 2.9 116.1 166.6 128.9 37.7 85.1 370.3 88.9 281.4 124.4 528.3 167.6 4.1 -9.4 0.3 1.0 1.5 -0.5 7.3 2.8 0.9 3.4 3.9 7.3 2.3 4.3 -44.2 4.2 -1.1 -1.1 -0.8 6.9 3.6 0.9 4.4 4.7 8.1 0.8 3,165,640 2,190,195 389,168 402,763 183,514 661,658 3,185,576 2,225,765 396,256 375,201 188,354 637,675 3,246,897 2,312,930 390,775 367,974 175,218 683,472 3,194,228 2,298,073 383,647 349,453 163,055 766,676 ... ... ... ... ... ... 9.5 7.7 14.7 10.1 24.9 8.7 9.7 10.1 4.3 9.6 18.4 6.0 1,336,248 634,596 664,613 37,039 1,007,544 572,207 332,086 103,251 1,057,441 684,184 250,492 122,765 863,454 553,377 257,169 52,908 768,919 432,439 225,567 110,913 -14.3 -23.6 12.6 -15.1 -3.4 -6.0 6.6 -13.3 5,183 3,418 100 1,665 3,809 3,166 64 579 4,325 3,801 74 450 3,677 2,994 93 590 ... ... ... ... -28.4 -26.3 481.3 -44.4 -11.0 -9.6 28.3 -17.8 892,382 5,250 169,977 931,558 5,323 175,006 927,801 5,390 172,134 909,213 5,201 174,815 871,443 5,096 171,005 -5.4 -13.3 9.1 8.7 0.5 8.2 3,422,053 56,302 3,082,885 53,966 3,111,000 54,731 3,101,379 52,116 ... ... 9.3 12.4 8.1 10.2 PHOENIX-MESA METROPOLITAN REGION (MARICOPA AND PINAL) - QUARTERLY DATA Demographics & Vital Statistics (000s, seas adj) ADHS & EBR Population Natural Increase Births Deaths Net Migration Personal Income by Source ($mil, SAAR) EBR Total Personal Income Earnings by Place of Work Less: Contributions for Social Insurance Plus: Adjustment for Residence Plus: Dividends, Interest & Rents Plus: Transfer Payments Per Capita Personal Income ($, SAAR) EBR % change versus year ago for: most most recent recent month 12-months % change versus year ago for: most most recent recent quarter 4-quarters II 1999 III 1999 IV 1999 I 2000 II 2000 3,035.4 7.4 13.2 5.8 16.0 3,058.8 7.5 13.4 5.8 15.9 3,082.3 7.6 13.5 5.9 15.9 3,105.8 7.6 13.6 5.9 15.8 3,129.2 7.7 13.7 6.0 15.7 3.1 3.4 3.4 3.2 -1.9 3.1 4.8 4.7 4.5 -5.5 83,344 62,287 3,928 -114 15,795 9,305 27,458 85,004 63,611 4,009 -113 16,035 9,480 27,790 86,802 65,057 4,096 -113 16,300 9,653 28,161 88,604 66,512 4,182 -112 16,566 9,821 28,529 90,352 67,916 4,267 -112 16,822 9,992 28,874 8.4 9.0 8.6 2.0 6.5 7.4 5.2 8.1 8.8 8.3 2.3 6.1 6.9 4.8 See notes at bottom of Arizona - Quarterly table. AR IZON A ’S E CON O MY PAGE FIFTEEN A R I Z O N A E C O N O M I C TUCSON METROPOLITAN REGION (PIMA) Civilian Labor Force (000s) ADES Employment Unemployment Unemployment Rate, Seas. Adj. (%) Employees on Nonagricultural Payrolls (000s) ADES Total Mining Construction Manufacturing Durable Nondurable Trans., Comm. & Publ. Util. Trade Wholesale Retail Finance, Ins. & Real Estate Services Government Sales ($000s) ADOR Aggregate Retail Sales Retail Food, EBR Restaurants & Bars Gasoline, EBR Contracting Value of Construction Contract Awards ($000s) F.W. Dodge Total Awards Residential Building Non-Residential Building Non-Building New Housing Units Authorized, Census C-40 adjusted by EBR Total Units Single Family Units 2-5-plus Unit Structures Housing Sales and Prices, TAR Total Sales ($000s) Total Units Average Price ($) Tucson International Airport, TAA Total Passengers Total Aircraft Movements I N D I C A T O R S JUL 2000 MAR 2000 APR 2000 MAY 2000 JUN 2000 395.9 385.2 10.7 2.9 396.1 386.4 9.7 2.8 396.4 385.9 10.5 2.9 397.4 386.0 11.4 2.8 394.1 382.8 11.3 2.6 2.1 3.2 -25.2 -27.8 4.8 4.5 15.2 10.0 353.8 1.8 22.0 33.1 27.5 5.6 12.4 74.0 10.8 63.2 13.7 118.4 78.4 355.6 1.8 22.2 33.2 27.6 5.6 12.4 74.3 10.9 63.4 13.8 119.6 78.3 356.4 1.8 22.1 33.3 27.7 5.6 12.3 74.2 10.9 63.3 13.8 119.2 79.7 351.4 1.8 22.1 33.4 27.8 5.6 12.3 73.8 11.0 62.8 13.7 119.4 74.9 346.0 1.8 22.1 33.5 27.9 5.6 12.5 72.9 11.0 61.9 13.8 118.7 70.7 5.9 -5.3 0.5 7.7 10.3 -3.4 1.6 4.7 2.8 5.1 6.2 5.0 10.8 5.3 -12.2 7.9 10.7 14.3 -3.7 -2.8 4.2 1.4 4.8 4.0 6.5 3.8 737,978 494,141 95,646 89,160 59,031 122,130 729,513 489,736 97,388 87,919 54,470 124,914 711,657 484,055 96,041 82,397 49,165 132,151 693,634 477,277 94,289 78,166 43,902 131,137 ... ... ... ... ... ... 2.5 -0.2 12.0 5.2 10.0 -4.2 8.4 8.2 4.4 5.8 26.8 16.0 219,229 91,357 78,825 49,047 140,587 113,801 21,788 4,998 113,272 97,195 10,016 6,061 145,888 92,369 32,624 20,895 143,714 82,504 42,503 18,707 -17.5 -12.0 44.1 -63.3 -3.8 -15.7 16.9 20.4 948 687 261 1,138 592 546 808 584 223 735 652 83 ... ... ... -15.2 0.8 -62.2 -4.0 -7.6 10.1 161,409 1,062 151,986 153,212 979 156,499 172,788 1,058 163,315 176,401 1,073 164,400 ... ... ... -10.4 -12.9 2.9 7.7 2.2 5.6 347,470 22,565 315,933 21,970 305,508 18,804 280,379 19,088 273,837 20,778 -1.0 -7.3 0.8 -8.9 TUCSON METROPOLITAN REGION (PIMA) - QUARTERLY DATA Demographics & Vital Statistics (000s, seas adj) ADHS & EBR Population Natural Increase Births Deaths Net Migration Personal Income by Source ($mil, SAAR) EBR Total Personal Income Earnings by Place of Work Less: Contributions for Social Insurance Plus: Adjustment for Residence Plus: Dividends, Interest & Rents Plus: Transfer Payments Per Capita Personal Income ($, SAAR) EBR % change versus year ago for: most most recent recent month 12-months II 2000 % change versus year ago for: most most recent recent quarter 4-quarters II 1999 III 1999 IV 1999 I 2000 842.8 1.2 2.9 1.7 4.3 848.6 1.2 2.9 1.7 4.7 854.8 1.2 2.9 1.7 4.9 860.8 1.2 3.0 1.8 4.9 866.9 1.2 3.0 1.8 4.8 2.9 2.2 2.1 2.0 13.7 2.8 4.1 2.3 1.1 9.9 19,140 12,103 715 185 4,630 2,937 22,710 19,553 12,389 732 192 4,719 2,987 23,040 19,992 12,678 750 198 4,831 3,034 23,389 20,427 12,965 767 204 4,944 3,080 23,730 20,855 13,252 784 210 5,048 3,128 24,057 9.0 9.5 9.6 13.8 9.0 6.5 5.9 8.5 9.4 9.6 14.3 7.4 6.3 5.6 See notes at bottom of Arizona - Quarterly table PA GE S IX TE EN ARIZONA’S ECONOMY A R I Z O N A ARIZONA MONTHLY DATA Civilian Labor Force (000s) ADES Employment Unemployment Unemployment Rate, Seas. Adj. (%) Employees on Nonagricultural Payrolls (000s) ADES Total Mining Construction Manufacturing Durable Nondurable Trans., Comm. & Publ. Util. Transportation Trade Wholesale Retail Finance, Ins. & Real Estate Services Government Federal State & Local Schools Hours Worked Per Week, Manufacturing, ADES Average Hourly Earnings ($) ADES Construction Manufacturing Utilities Retail Trade Wholesale Trade Sales ($000s) ADOR Aggregate Retail Sales Retail Food, EBR Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Utilities Communications Amusements Rentals - Personal Property Contracting Mining - Metal, Oil & Gas Hotel/Motel Value of Construction Contract Awards ($000s) Total Awards Residential Building Non-Residential Building Non-Building New Housing Units Authorized, Census C-40 Total Units Single Family Units 2-4 Unit Structures 5-plus Unit Structures Bankruptcy Filings, U.S. Bankruptcy Court Total Chapter 7 Chapter 11 Chapter 13 E C O N O M I C I N D I C A T O R S % change versus year ago for: most most recent recent month 12-months MAR 2000 APR 2000 MAY 2000 JUN 2000 JUL 2000 2378.8 2298.1 80.7 3.9 2383.1 2304.3 78.8 3.7 2398.5 2307.6 90.9 3.8 2409.5 2309.0 100.5 3.8 2408.5 2305.2 103.3 3.6 0.8 1.7 -16.7 -21.7 3.0 3.5 -6.2 -8.9 2244.6 9.9 155.9 213.3 165.2 48.1 106.8 69.1 525.3 108.1 417.2 144.7 715.9 372.8 49.4 323.4 175.6 40.1 2258.0 10.0 157.1 213.8 165.8 48.0 108.3 70.5 527.9 108.1 419.8 145.5 721.6 373.8 49.7 324.1 176.1 40.3 2265.3 10.0 158.3 214.6 166.8 47.8 108.6 70.6 527.2 108.3 418.9 145.8 721.9 378.9 56.5 322.4 173.1 40.4 2233.2 10.1 158.9 215.7 167.6 48.1 109.4 71.1 526.8 109.0 417.8 146.1 725.0 341.2 48.7 292.5 139.4 40.3 2214.6 10.1 159.6 216.5 168.4 48.1 109.7 71.3 520.0 108.1 411.9 145.9 725.1 327.7 49.4 278.3 123.9 40.1 4.5 -4.7 1.2 2.1 3.3 -2.0 5.7 5.5 3.0 0.3 3.8 3.8 6.7 5.4 5.1 5.4 7.4 -0.5 4.4 -19.9 4.8 0.4 1.2 -2.3 4.4 4.7 3.4 -1.1 4.6 4.4 7.9 2.5 4.3 2.2 1.2 0.7 14.58 12.68 18.40 11.47 14.12 14.84 12.86 18.64 11.75 13.92 14.93 12.87 18.96 11.44 13.78 15.06 12.79 19.09 11.48 13.79 15.44 12.72 19.35 11.54 14.20 7.7 0.1 8.9 0.7 3.5 2.4 1.7 3.8 -1.3 3.5 4,633,618 3,144,297 576,920 571,233 341,168 217,832 375,693 213,752 72,928 325,742 908,198 38,901 228,058 4,635,062 3,175,639 587,428 546,220 325,776 212,703 359,549 204,560 77,250 291,034 889,512 33,918 194,863 4,670,391 3,251,662 579,302 535,561 303,866 212,479 443,472 220,940 53,873 291,243 944,794 43,817 163,293 4,629,341 3,264,559 568,735 513,123 282,924 202,638 541,973 232,551 66,622 321,231 1,055,234 36,459 127,952 ... ... ... ... ... ... ... ... ... ... ... ... ... 8.0 6.8 8.0 8.6 22.2 1.2 17.8 19.2 -7.9 11.5 7.4 -50.3 10.7 10.2 10.0 6.8 9.1 23.9 0.0 4.9 14.4 8.8 8.6 8.0 -31.9 9.1 1,700,373 808,653 772,950 118,770 1,276,180 775,394 375,371 125,415 1,358,019 879,715 312,960 165,344 1,250,296 727,136 360,577 162,583 1,047,458 596,921 283,326 167,211 -13.9 -19.1 8.2 -23.0 -1.9 -7.0 7.0 4.2 6,501 4,659 159 1,683 5,428 4,328 78 1,022 5,833 4,993 128 712 5,034 4,278 131 625 ... ... ... ... -26.2 -19.4 114.8 -56.9 -9.1 -7.4 8.5 -17.0 1,981 1,609 34 338 1,736 1,415 29 291 1,883 1,543 17 322 1,824 1,459 29 336 1,571 1,242 19 308 -12.3 -12.5 -17.4 -11.7 -9.0 -10.4 36.9 -5.4 See notes at bottom of Arizona - Quarterly table. ARIZONA’S ECONOMY PAGE SEVENTEEN A R I Z O N A E C O N O M I C ARIZONA QUARTERLY DATA Demographics & Vital Statistics (000s, seas adj) ADHS & EBR Population Natural Increase Births Deaths Net Migration Personal Income Derivation ($mil, SAAR) EBR Total Personal Income Earnings by Place of Work Less: Contributions for Social Insurance Plus: Adjustment for Residence Plus: Dividends, Interest & Rents Plus: Transfer Payments Components of Earnings ($mil, SAAR) BEA Wages and Salaries Other Labor Income Proprietor’s Income Farm Nonfarm Per Capita Personal Income ($, SAAR) EBR Average Wage Per Employee, Annual Rate ($) EBR I N D I C A T O R S II 1999 III 1999 IV 1999 I 2000 II 2000 4,825.3 10.4 19.9 9.6 25.1 4,860.4 10.6 20.1 9.5 24.2 4,894.7 10.0 20.0 10.0 23.8 4,928.5 10.4 20.3 10.0 23.6 4,962.4 10.4 20.5 10.0 23.4 2.8 0.9 2.7 4.6 -7.1 2.9 2.3 1.9 1.5 -6.5 120,914 85,377 5,243 395 24,482 15,903 121,946 86,200 5,285 398 24,533 16,100 125,730 89,022 5,429 408 25,416 16,313 127,655 90,469 5,540 414 25,667 16,646 130,563 92,612 5,649 422 26,232 16,947 8.0 8.5 7.7 6.9 7.1 6.6 8.0 8.7 8.0 7.8 7.1 5.9 69,152 7,549 8,723 578 8,145 25,059 31,633 70,100 7,611 8,717 390 8,326 25,090 31,727 71,061 7,677 9,022 510 8,512 25,687 31,886 72,732 7,807 9,155 440 8,716 25,901 32,150 ... ... ... ... ... 26,310 ... 9.7 7.4 7.1 -31.9 10.2 5.0 4.7 8.6 6.0 8.3 -13.0 9.9 5.0 4.1 TRAVEL AND TOURISM - MONTHLY DATA FEB 2000 Visits to Parks & Other Recreational Areas, ADOT, NPS & ASPB Northern Arizona Historical Scenic Water Based Recreation Southern Arizona Historical Scenic Water Based Recreation International Border Crossings, USINS & USCS U.S. Citizens Aliens Vehicles MAR 2000 APR 2000 MAY 2000 JUN 2000 % change versus year ago for: most most recent recent month 12-months 975,123 104,274 239,035 631,814 410,233 70,350 299,003 40,880 1,335,541 142,261 439,928 753,352 415,417 79,784 286,023 49,610 1,868,433 188,262 553,791 1,126,380 335,071 57,108 223,406 54,557 2,055,409 176,993 655,139 1,223,277 204,853 34,276 123,057 47,520 2,605,144 178,568 740,860 1,685,716 161,755 21,499 100,914 39,342 3.2 -18.6 -6.3 11.3 -2.7 -18.4 4.7 18.3 0.9 -7.0 -1.2 3.1 8.2 -6.1 14.8 2.8 740,871 2,024,266 824,903 799,918 2,154,878 842,691 757,219 1,947,179 821,504 794,576 2,162,189 914,213 769,596 2,043,281 877,638 4.0 7.5 1.4 2.0 1.5 3.8 MEASURES OF INFLATION AND PRICES - MONTHLY DATA Consumer Price Index (1982-1984=100) BLS U.S. - All Urban U.S. - Wage Earners % change versus year ago for: most most recent recent quarter 4-quarters MAR 2000 APR 2000 MAY 2000 JUN 2000 171.1 167.8 171.2 167.9 171.3 168.1 172.3 169.1 JUL 2000 172.6 169.3 % change versus year ago for: most most recent recent month 12-months 3.5 3.7 3.0 3.1 Sources and abbreviations: ADES: Arizona Department of Economic Security ADHS: Arizona Department of Health Services ADOR: Arizona Department of Revenue ADOT: Arizona Department of Transportation ARMLS: Arizona Regional Multiple Listing Service ASBD: Arizona State Banking Department ASPB: Arizona State Parks Board BEA: Bureau of Economic Analysis, U.S. Department of Commerce PAGE EIGHTEEN BLS: Bureau of Labor Statistics, U.S. Department of Labor Census C-40, Bureau of the Census, U.S. Department of Commerce EBR: Economic & Business Research Program, The University of Arizona F.W. Dodge, Division of McGraw Hill Information Systems Co. (proprietary data provided by special permission) NPS: National Park Service, U.S. Department of the Interior NSCCC: Nogales-Santa Cruz Chamber of Commerce PSIA: Phoenix Skyharbor International Airport SAAR: Seasonally adjusted at annual rates TAA: Tucson Airport Authority TAR: Tucson Association of Realtors USINS: U.S. Immigration & Naturalization Service, U.S. Department of Justice U.S. Bankruptcy Court, District of Arizona USCS: U.S. Customs Service, U.S. Department of the Treasury ARIZONA’S ECONOMY A R I Z O N A E C O N O M I C I N D I C A T O R S MEASURES OF INFLATION AND PRICES -QUARTERLY DATA Consumer Price index (1982-84=100) BLS Western Region (U.S.) U.S. - All Urban Consumers U.S. - Urban Wage Earners Price Indexes (1992=100) BEA Gross Domestic Product Personal Consumption Expenditures II 2000 % change versus year ago for: most most recent recent quarter 4-quarters II 1999 III 1999 IV 1999 I 2000 168.3 166.2 162.8 170.0 167.2 163.9 170.5 168.3 165.1 173.4 169.8 166.6 174.3 171.6 168.4 3.6 3.2 3.4 3.3 2.9 3.0 104.4 104.3 104.7 104.8 105.2 105.4 105.9 106.3 106.6 107.1 2.2 2.7 1.7 2.2 See notes at bottom of Arizona - Quarterly table Visit our NEW web site! e b r. e l l e r. a r i z o n a . e d u Made possible through the support of Bank One TO ORDER Check the appropriate box below and include a check or money order, where applicable. 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