O C T O B E R

2 0 0 3

F A L L

BUDGET
STABILIZATION
FUND: CAP SIZE
AND OTHER
ISSUES
By Alberta H. Charney, Ph.D.
August 15, 2003

T

he Arizona Legislature
established the Budget
Stabilization Fund (BSF),
commonly known as the “rainy day
fund,” in 1990. It was designed to
smooth out the fluctuations in
Arizona’s revenue streams, calling for
payments to be made to the fund
during periods of rapid state income
growth and for funds to be paid out
during periods of slowdowns or
downturns. Although a wonderful
idea, as currently implemented it is
woefully inadequate to serve the needs
of the state for five reasons.

First, money coming into the fund was
limited to seven percent of the General Fund
revenue at the end of each fiscal year. But,
revenue streams frequently fluctuate by

more than seven percent in a given year.
Thus the limit of seven percent on a rainy
day fund is too low to adequately cover one
year of revenue fluctuations.
Second, the fund design does not account
for slowdowns or downturns that cover
more than one fiscal year. If a recession
extends through two fiscal years, the rainy
day fund will likely dry up during the first
year, requiring severe cuts during the second (and often third) fiscal year of the
recession.
Third, the funding formula, as altered in
the mid-90s, can recommend $0 fund payout, even in severe recessions.
Fourth, the funding formulas were
designed to smooth out revenue streams,
but the design does not account for the
increased demand for services that occur
during difficult times.
Fifth, the fund was raided by the
Legislature for purposes unrelated to fluctuations in the business cycle.

BACKGROUND
The Budget Stabilization Fund (BSF),
enacted in 1990 (A.R.S. § 35-144) and
administered by the State Treasurer, is
designed to set revenue aside during good
times and to utilize this revenue during
times of below-trend growth. The BSF
could be an important tool for the fiscal
management of the State of Arizona because
a) states must maintain a balanced budget
even during severe economic downturns, b)
Arizona’s revenue structure is extremely
cyclical, partly because of its mix of revenue
sources and partly because of the strong
cyclicality of Arizona’s economy, and c) the

I N S I D E

Economic
Outlook
Luncheon

OUTLOOK LUNCHEON ...........5

See Page 5

ECONOMIC INDICATORS ........9

NEW DATA, NEW MODELS.....6
FORECAST TABLES ................7

I S S U E

health and welfare component of state
expenditures are counter-cyclical, increasing during difficult economic times and
decreasing during strong growth periods.
The Arizona BSF is relatively unique in
that it is formula driven. While subject to
legislative appropriations for deposits and
withdrawals, the BSF formula provides both
a signal and suggested dollar amount for
deposits to the BSF in “above average” economic times and fund withdrawals during
“below average” economic times.
Current key features of the BSF fund can
be summarized as follows:
• The deposit into or withdrawal from the
BSF for a given fiscal year is determined by
comparing the annual growth rate of inflation adjusted Arizona Personal Income
(AZPI) for the calendar year ending in the
fiscal year to the trend growth rate of inflation adjusted AZPI for the most recent seven
years.
• Adjusted personal income in the BSF
formula is defined as total Arizona personal
income less transfer payments, adjusted by
the gross domestic product price deflator
index.
• If the annual growth rate exceeds the
trend growth rate, the excess multiplied by
General Fund revenue of the prior fiscal
year would equal the amount to be deposited into the BSF.
• If the annual growth rate is both less
than 2% and less than the trend growth rate,
the deficiency when multiplied by the
General Fund revenue of the prior year
would equal the amount to be withdrawn
from the BSF.
• By a two-thirds majority, the
Legislature, with the concurrence of the
Governor, can decrease a deposit or
increase a withdrawal.
• The BSF’s total balance cannot be larger than 7.0% of the prior year’s General
Fund revenues.
• In addition to the fixed income investments available to the Treasurer, the 1998
Legislature allowed the Treasurer to invest
up to 25% of the BSF in equity securities.

ELLER COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION

T UCSON, ARIZONA

DIVERSIONS FROM THE
ORIGINAL 1990 DESIGN OF BSF
There are several points that should be
discussed regarding the current key features.
Currently, the balance of the BSF is limited in
size to 7.0% of the prior year’s General Fund
revenues. Under the original 1990 statute,
the balance in the rainy day fund could
reach as much as 15% of the General Fund
budget before the transfers were stopped.
The 15% size of the cap had been determined by examining prior business cycles
and revenue collections. The original 15%
figure had been established as the amount
necessary to smooth Arizona’s revenue flows
through a modest recession. Despite the
original determination of a 15% ceiling, the
Legislature reduced the size of the cap to 5%
in 1995, then gradually increased it from 5%
in FY1997 to 7% in FY 2000. Thus, at the
start of the current major recession, the fund
had a maximum balance that was well under
half of what was intended in the original
design.
Another change that was made in the mid1990s was the condition that withdrawals
from the BSF would only be made if the
annual growth rate in deflated adjusted personal income in the prior calendar year be
below the trend line AND be below 2%.
Supposedly, the 2% floor was added to avoid
withdrawing monies when economic growth
is slowing but there is not a recession, usually defined by negative economic growth.
This requirement results in the formula
rarely, if ever, recommending payouts from
the fund to be made. The growth rate of real
adjusted personal income will rarely fall
below 2% because even during major recessions, Arizona’s population growth commonly exceeds 2%. For example, the population
growth rates for FY2000 through FY2003
were 3.8%, 3.1%, 2.8%, and 2.8%, respectively. Thus it is likely that the formula may
not have triggered any funds, let alone sufficient funds, even if monies were available.
Finally, the BSF was originally designed to
be a management tool designed solely to
smooth the fluctuations in the normal business cycles; it was not intended to be used as
a contingency fund to cover legislated emergencies, such as the Alternative Fuels program, nor to finance needed capital expenditures, such as renovations to the Arizona
State Hospital.
For FY2001 through FY2003, the BSF
financed unplanned taxpayer refunds associPAGE 2

ated with Alternative Fuels of about $114
million, according to Joint Legislative Budget
Committee records. In Laws 2000, 7th
Special Session, Chapter 1 required that
alternative fuel related liabilities would be
funded by the BSF up to $200 million. The
BSF was to be reimbursed by the General
Fund at a rate of up to $16 million annually.
However, this reimbursement provision was
repealed.
Also, in 1999, the legislature allowed the
BSF to provide for the majority of funding,
$77.5 million, for major renovations to the
Arizona State Hospital. This financing plan
originally intended for the BSF to be reimbursed by Tobacco Tax Settlement funds. In
fact, $40 million was repaid from that
source to the BSF in FY2000 and FY2001.
However, an Attorney General opinion related to usage of the Tobacco Tax Settlement
funds caused plans for further repayments to
the BSF to be cancelled. The unintended net
cost to the BSF of the Arizona State Hospital
has been $37.5 million to date.
As a result, the BSF has been used to
finance a net $151.5 million for emergencies
and projects that were completely unrelated
to the economic downturn. Thus the state
had only half (approximately) of the 7%
capped BSF balance at the end of FY2001 to
use to ease the budgetary problems of
FY2002 through FY2004.

CYCLICALITY OF REVENUES
AND HEALTH AND WELFARE
EXPENDITURES
The main purpose of this article is to discuss the optimal cap size for the BSF, but the
previous discussion highlights additional
concerns associated with the BSF. In this
section, cyclicality of revenues and health
and welfare expenditures are discussed.
Understanding the fluctuations of revenues
and these “safety net” expenditure categories
will shed light on the optimal cap size for the
BSF.

REVENUE CYCLICALITY
In this section, the size of the fluctuations
of three major revenue sources will be
examined: sales tax, individual income tax
and corporate income tax. These three revenues comprise 94% of all tax revenue to the
general fund. Fluctuations in these three
revenues will be discussed both “nominally,”
and in “real per capita” terms.

The term “nominal” used in front of a
word, such as revenues or dollars, simply
means that no attempt has been made to
adjust for the effects of inflation. A “nominal” dollar is worth less today than it was
last year because inflation has eroded part of
its purchasing strength. “Real” is a term
used to describe dollars or revenues that
have been adjusted to remove the effects of
inflation. A “real,” or deflated dollar, by definition, has the same value today as it had
last year. Thus, when discussing “real” revenues, the term means that the effect of inflation has been removed by adjusting with a
price index (a Consumer Price Index, for
example). When a percent change of “real”
revenues is computed, it represents the
change in purchasing power of those revenues.
“Real” revenues, divided by population,
results in “real per capita” revenue figures.
Economists frequently discuss “real per
capita” revenues instead of “nominal” revenues because it makes it easier to identify
business cycles, particularly in Arizona,
where population growth can be strong even
through recessions. In addition, it is important to recognize that the demands on the
public sector grow with both inflation and
population growth. When utilities, equipment, supplies and communication costs
increase, it affects the cost of doing business
for governments as well as for firms in the
private sector. When population increases,
so does the demand for public services.
School enrollments increase, court and correction caseloads increase, and health and
welfare caseloads increase, even in the
absence of a recession. Both inflation and
population growth are powerful influences
on the cost of running the government.
When revenue growth falls short of the combined inflation and population growth rates,
then there will be, almost by definition, cuts
in government services. Thus, “real per
capita” revenues, or revenues net of inflation
and controlled for population size, is a better indicator of the dollars governments have
to work with.

SALES TAX REVENUE CYCLICALITY
To examine the cyclicality of sales tax revenue, the tax base, i.e., taxable sales, was
examined from FY1961 through FY2002.
This long time-series is analyzed so that the
economic downturns that occurred in the
mid-70s, the early 1980s and the early
ARIZONA'S ECONOMY

1990s can be examined, rather than just
considering the most recent/current cycle.
The cyclicality of “taxable sales” was analyzed rather than actual collections because
there were several tax rate changes throughout this period and taxable sales data are
free of those changes. Taxable sales data are
not free of changes made to the tax base,
however. Sixteen taxable sales categories
were added together to get “total” taxable
sales for FY1981 through FY2002, for analysis purposes.
Taxable sales, like most measures of economic activity, are strongly affected by
changes in prices (inflation) and population
growth. Thus, when “nominal” taxable sales
are examined over time, the figures rarely
show an actual decline. In the data series
developed for this study, taxable sales
declined by 2.3% in 1968, 6.95% in 1981,
and 1.68 in 1983. The larger decline of
6.95% must be ignored because it corresponds to the 1980 exemption of food,
which substantially reduced taxable sales the
following fiscal year. Thus, inflation and
population growth in Arizona tend to offset
the fall in per capita purchasing power associated with recessions, with the exceptions in
FY1968 and FY1983, in which “nominal”
taxable sales declined by approximately 2%.
In the most recent recession, sales tax revenues barely grew at all in FY2002 (0.6%)
and only grew by approximately 1.8% in
FY2003. This slow growth occurred despite
inflation increasing prices by 1.77% in
FY2002 and 2.67% in FY2003 and population growing by 2.8% in both FY2002 and
FY2003.
The cyclicality of taxable sales becomes
much clearer when the figures are deflated
and divided by population. When the resulting “real per capita” taxable sales are analyzed, very strong cycles are apparent. Total
real per capita taxable sales can fall by as
much as 12% (1975) or grow by as much as
18% (1969). During periods of recession,
the declines may be smaller but last for several years. Thus, the declines in real per
capita sales from FY1988 through FY1992
were 4.1%, 1.3%, 2.4%, 4.4%, and 2.0%.
The decline in any given year was not double
digit, but the declines lasted multiple years
and totaled 14% over the multiple-year period. Unfortunately a similar calculation cannot be made for the recession of the early
80s because the food exemption masks any
recession-induced decline in 1981.
However, it is telling that real per capita taxARIZONA'S ECONOMY

able sales fell by 6.1% in 1982 and 7.88% in
1983, for a total 14% decline over just those
two years.
During the current recession, “nominal”
taxable sales were flat in FY2002 (0.6%
growth), while the combined growth in population and inflation was 4.6%. Thus, the
state’s ability to provide government services
fell by 4%. In FY2003, sales tax revenues
increased 1.8%, but the growth in prices and
population growth was 4.9%.

INDIVIDUAL INCOME TAX
REVENUE CYCLICALITY
In nominal dollars, the individual income
tax has shown two significant declines. In
FY1991, individual income tax revenues fell
by 16%, a figure larger than the 9% decline
of FY2002. It should be noted that nominal
individual income tax collections showed
almost no growth in FY2003.
When inflation and population are controlled for, numerous fiscal years showed
declines in real per capita individual income
tax collections. During the weakness in the
mid-70s, real per capita individual income
tax revenues fell by 3.8% in 1975 and 2.9%
in 1976. During the early 1980s recession,
real per capita revenues from this source
were virtually flat, showing no growth in
FY1980 and FY1981. In FY 1985, there was
a weakness in this revenue source, with real
per capita individual income tax collections
falling by 7.6%, according to Department of
Revenue data. In FY1991, part of the early
1990s recession, real per capita individual
income tax collections fell by 22.2%.
During the most recent recession, real per
capita individual income tax revenues fell by
13% in FY2002. Thus, the ability of these
revenues to provide services fell by 13%.

CORPORATE INCOME TAX
REVENUE CYCLICALITY
The corporate income tax is the most
volatile of the three major Arizona revenue
sources. Nominal revenues from this source
fell by 36% in FY2002, and are estimated to
have grown 12% in FY2003, recouping a
fraction of the FY2002 loss. The declines
during the early 1980s and early 1990s
recessions were smaller, dropping only 9%
during FY1982 and 11% during FY1990.
However, this revenue source showed substantial weaknesses in the mid-1980s, dropping 17% in FY1986 and 25% in FY1988.
Again, the volatility of this tax is much

stronger when examined in real per capita
figures. When inflation and the effects of
population are removed, this revenue source
fell by almost 15% in the mid-70s, by 3.4%
in FY1981 and 18% in FY1982. The mid-80s
weakness was much worse, with real per
capita corporate income taxes falling by 5%
in 1985, 22.8% in FY1986 and 31% in
FY1988. During the early 90s recession,
revenues fell by 17% in FY1990 and showed
no growth in FY1991. During the most
recent recession, real per capita corporate
income tax revenues declined by 38.5% in
FY2002.

REVENUE MIX AND CYCLICALITY
The mix of state revenues can affect the
volatility of a state’s revenue structure. The
mix of Arizona’s revenue structure has
changed over the last two decades in a way
that has modestly increased revenue volatility. The share of the General Fund revenues
derived from sales taxes remained relatively
constant over the past two decades, representing 45.5% of the GF in FY1980, 44.1% in
FY1990, and 46.9% in FY2000. With the
passage of Proposition 301, the share associated with sales tax has increased to 49.9%
in FY2003.
In FY1980 and FY1990, property taxes
(general property taxes and the vehicle
license tax) represented between 5.5% and
7.5% of the General Fund. By FY2000, however, these two property tax categories represented less than 1.5% of the General Fund.
Property taxes tend to be the most stabile of
all revenue sources because property values
tend to hold even during a recession. At the
same time, income taxes (personal and corporate combined) increased from 28.9% of
the GF in FY1980 to 38.7% in FY1990, to
40.13% in FY2000. The loss of property tax
revenue, the third leg of the traditional state
tax structure, combined with the increase in
the importance of the income tax, have
increased the volatility of the tax structure
over time.

SUMMARY OF REVENUE
CYCLICALITY
Of the three most important revenue
sources to Arizona, the sales tax is the least
volatile, showing annual nominal declines of
0 to 2% in any given year during economic
slowdowns or recessions. The corporate
income tax is the most volatile, with nominal
losses during recession years between 10
PAGE 3

and 36%. The individual income tax, while
still very volatile, is more stable than the corporate income tax, has shown declines of
10% to 16% in economic downturns.
These figures represent the ranges of revenue declines for one year, the worst year, of
a recession. Recessions are often characterized by a substantial slowing of growth, followed by a year of declining (negative
growth) revenues, followed by a year of flat
(zero growth) revenues.
This characterization fits the
current/recent recession fairly well. In
2001, sales tax revenues grew by 5.5%, individual income tax revenues grew by 0.5%,
and the corporate income tax grew by 3.4%.
The weighted average of these three major
revenue sources grew by approximately
3.3% between FY2000 and FY2001. FY2002
suffered a 6.73% decrease in the big-three
and revenue growth for FY2003 is expected
to be approximately 2%. Revenues grew
extremely slowly or declined between
FY2000 and FY2003, despite the fact that
population growth and inflation combined to
increase 6.7% in FY2001, 4.6% in FY2002,
and 5.6% in FY2003. Thus, for the past
three fiscal years, revenues have severely
fallen short of meeting the basic growth
needs of the state.

CYCLICALITY OF HEALTH AND
WELFARE EXPENDITURES
It is extremely difficult to tell how much
health and welfare costs and caseloads
increase during a recession because usually
these programs suffer significant cuts just at
the times when these benefits are most needed. Ideally, to truly understand how these
costs increase during a recession, data
requirements include: a) the natural
increase in health/welfare enrollment due to
population and demographics and b) the
increase in health/welfare enrollment due to
an increase in the number of families qualifying for these services due to job loss or
reductions in household income caused by
the recession. This type of detailed data was
not available for this report, so more general, secondary data sources were utilized.
To make analysis of the increase in
health/welfare enrollment and costs even
more difficult, Arizonans passed Proposition
204 during FY2002, which expanded eligibility in the program.
According to the Report Highlights of the
Financial Report of the Office of the Auditor
PAGE 4

General of the State of Arizona, June 30,
2002, “Health and welfare expenditures
increased $955 million or 21 percent
between FY2001 and FY2002. The largest
increase occurred in programmatic costs for
the Arizona Health Care Cost Containment
System (AHCCCS). These expenditures
increased approximately $939 million, or 39
percent.”
Continuing, this report stated: “A large
increase in program membership and inflationary trends for health care cost has led to
an increase in AHCCCS expenditures. …
[T]he AHCCCS program membership
increased by more than 172 thousand members, or 29 percent, during fiscal year 2002.
The declining Arizona economy and
increased enrollment due to the implementation of Proposition 204, a ballot initiative
passed by voters on November 7, 2000 has
led to this membership growth. The initiative expanded eligibility for the Title XXIX
Medicaid program to 100 percent of the federal poverty level. Inflationary trends for
healthcare costs are incorporated into the
rate development process when determining
capitation rates that the AHCCCS pays to
healthcare providers. The capitation rate for
the October 1, 2001, through September 30,
2002, contract year was adjusted upward by
approximately 7 percent to account for inflationary growth.”
From this information, it is very difficult to
tell what portion of the 29% increase in
caseloads was due to Prop 204 and what
portion was due to the recession. For purposes of this discussion, it is assumed that
recession-induced caseloads accounted for
one-third of the increase, or 10%. When
this figure is combined with the 7% increase
in inflationary agreements with providers,
the resulting estimate of a 17% increase
associated with the recession is not too dissimilar to a 13% nation-wide estimate of
increases in Medicaid costs reported by the
Council of State Governments. Arizona’s
cost increase would be expected to be somewhat higher because of population effects
and because Arizona already has most of its
caseload in managed care, a shift other
states are still making.
Since AHCCCS represents the bulk of the
Health and Welfare portion of the General
Fund and the Health and Welfare portion
represents close to half of the General Fund
expenditures, then we will assume that
recession-induced demands on the general

funds increased expenditures by approximately 8%, in FY2002.

SUMMARY AND CONCLUSIONS
The BSF, as currently designed, has failed
to adequately serve the needs of the state.
The fund is limited to 7% of the General
Fund, but the three major sources of revenue – sales, individual income, and corporate income taxes – can fall by as much as
2%, 15% and 30%, respectively per year,
during economic downturns. The weighted
average of these as they are represented in
recent fiscal years, implies that the big-three
revenue sources can fall between 9% and
10% in one year during a recession, in nominal dollars. Since these revenue sources
comprise 94 percent of all tax revenues to
the General Fund, the seven percent limit is
too low to adequately cover the potential revenue loss of even one year of a recession.
A 10% reduction in nominal revenues represents a 14% to 16% reduction in the state’s
ability to provide services to the ever-growing population in an increasingly expensive
environment.
To make matters worse, recessions typically impact more than one fiscal budget.
Recessions typically impact revenues for
three years, showing slow growth one year,
negative growth the next, and flat or slow
growth the third year. Revenue growth that
is less than the combined population growth
and inflation, represents an erosion in “real
per capita” state government revenues. As
soon as state revenues fall below the combined growth in population and increases in
the costs of providing those services, cuts in
government service levels are the logical
result.
Assume a typical recession that starts with
a year of slow revenue growth that just meets
population growth and inflation. In the second year, the recession may cause nominal
revenues to drop by 9% to 10%, representing a drop in purchasing power of 14% to
15% due to population growth and inflation.
In the third year of the recession, revenue
growth may be flat, representing a 4% to 6%
decline in government purchasing power.
The funding formulas are designed only to
smooth out revenue fluctuations, not to
account for recession-induced increases in
the number of families qualifying for public
support and health care. As estimated
above, health and welfare expenditures associated with the recession may increase
ARIZONA'S ECONOMY

demands on the General Fund by 8%,
including both increases in caseloads and
increases in costs of services. This higher
than normal expenditure level can last for
multiple years. Increases in Arizona’s
healthcare and welfare caseloads typically
are either voter mandated or formula driven.
The combination of volatile revenues,
recessions that last more than one fiscal
year, continued population growth and rising
prices, and the burgeoning of families eligible for social services during a recession
suggests that the Budget Stabilization Fund
limit be increased to 30% to 35% of the
General Fund. This range represents the
sum of a one-year decline in nominal
General Fund revenues of 9%, an extra 4%
to 6% to account for population growth and
inflation during that year, an additional 4%
to 6% to account for population growth and
inflation during the year that revenues are
typically flat, and perhaps two years of significantly higher (8%) health and welfare
expenditures.
It is important for voters, politicians and
policy makers to understand that a fullyfunded BSF will help not only the public/government sector during the next recession,
but will help the entire state economy by acting as a strong counter-cyclical stimulus.
The use of the BSF during a recession provides direct stimulus to the state by a) avoiding substantial reductions in the government
sector at a time when other segments of the
economy are weak and b) avoiding major
cuts in health and welfare benefits that can
have a federal to state match ranging from 1
to 1 up to 6 to 1. This federal flow of funds
into Arizona can also act as a strong countercyclical force.
In addition to the current BSF fund cap
being extremely low, there are other problems associated with the BSF. It appears that
the transfer formulas are too conservative to
provide for substantial payouts during downturns. Clearly the “less than 2% growth”
requirement should be removed from the
formula. It was not in the original design of
the BSF nor does it make sense. Even during
severe economic downturns, Arizona’s population continues to grow by 2% or more,
making this requirement almost impossible
to meet. The calendar year prior to FY2002
showed growth in adjusted deflated personal
income greater than 2% due to strong population growth; thus, the formula would have
triggered $0 in FY2002.
ARIZONA'S ECONOMY

By deflating personal income to remove
the effects of inflation in the formula, the
resulting figures represent mostly population
growth. Perhaps alternative formulas that
compare per capita deflated personal
income can be devised. The advantage of
this type of alternative formula is that the
resulting figures would pick up a recession
faster. A major disadvantage of this type of
formula is that accurate and timely population measures would be required.
While established to smooth fluctuations
in state revenues, the BSF fund has been
raided for unplanned expenditures not related to the business cycle. The state should
establish a separate contingency fund that is
designed to cover financial emergencies,
such as the Alternative Fuels program or
possibly major lawsuits that could significantly impact state expenditures. This contingency fund should be paid back in a
promptly manner to assure it’s availability in
the next non-recession-induced crisis.
A BSF is, by far, the best way to provide
sound financial management in a very cyclical state with highly volatile revenue sources.
The BSF is an excellent tool for fiscal management. By smoothing revenue/expenditure flows during the business cycle, the BSF
can not only reduce the havoc on government services created by severe economic
downturns, but the BSF can act as a countercyclical force, both by maintaining state government spending levels during the recession and by attracting substantial federal dollars through its safety net programs. ■

Recommendations:
• Establish the BSF via an Amendment to
the Arizona State Constitution. The BSF is
a necessary fiscal management tool in a
state that has a very cyclical economy,
volatile revenue sources, and a supermajority requirement for raising taxes.
The Amendment should provide
guidelines for how the fund may be used.
• The BSF should be capped at 30-35% of
the General Fund in order to avoid
enormous cuts in public services during
the next recession. This level allows for
one year of slowdown, one year of
recession, and one year of zero growth
in revenues. In addition to preparing for
recession-reduced revenues, this 3035% level allows for the increase in
formula-driven health and welfare
expenditures that occur during a
recession.
• The funding formula must be revised.
At a minimum, the “less than 2%”
requirement must be removed. The
existing formula cannot trigger funding
flows from the BSF that will adequately
cover both the fall in revenues and the
increase in expenditures associated with
a recession.
• Establish a separate “contingency fund”
for non-recession-related emergencies,
such as the Alternative Fuels Program
and major lawsuits. Monies used from
this fund should be paid back in a
prompt manner.

Economic Outlook Luncheon
Friday, December 5, 2003
Noon - 2:00 pm
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
Reserve now and save:
$65.00 per person; $650 per table of 10*
After November 3: $70.00 per person; $700 per table of 10*
Reservations required. Call 621-9954 for information and reservations.
*Fee is not a charitable contribution.

The University of Arizona

Eller College of Business and Public Administration

PAGE 5

NEW DATA,
NEW MODELS
By Marshall J. Vest
Forecasting Project Director
August 31, 2003

Arrival of NAICS data (regional
employment and income based on
the new North American Industrial
Classification System) required
rebuilding of our regional models.
We are pleased to report that this
gargantuan task is complete. Our
first forecasts with these new models
look much like the forecasts from last
quarter. We continue to expect solid
improvement in the months ahead,
setting the stage for “trend” growth in
2004 and beyond.
In March, the Arizona Department of
Economic Security released its annual
rebenchmarked estimates of employment,
and in the process, provided analysts with
their first look at industry employment using
the new North American Industry
Classification System (NAICS). Then in July,
the Regional Economic Information System
office of the U.S. Bureau of Economic
Analysis released NAICS-based personal
income estimates for states and metro areas.
NAICS provides 20 broad industrial
sectors, up from 10 divisions under the old
SIC system. The new system provides much
more detail for services and less for goods
producing industries. Many of the new
sectors are recognizable from the old SIC
system, others represent combinations of
pieces from different SIC divisions, and
WE WERE ABLE TO
RECONSTRUCT ADDITIONAL
HISTORICAL EMPLOYMENT
DATA FOR THE PUBLISHED
NAICS SECTORS. STATEWIDE,
WE NOW HAVE MONTHLY
ESTIMATES BEGINNING IN 1966.

PAGE 6

several are brand new industries recognized
for the first time. A detailed description of
NAICS is available at http://www.census.gov/
epcd/www/naics.html.
The data is more comprehensive and
descriptive of today’s economic structure,
but the time dimension is short. For
employment, historical data only back to
1990 was provided. For personal income,
only 2001-2002.
Using data archived in EBR’s databases
along with information posted on the U.S.
Bureau of Labor Statistics (BLS) website
showing correspondence between NAICS and
SIC, we were able to reconstruct additional
historical employment data for the published
NAICS sectors. Statewide, we now have
monthly estimates beginning in 1966 for
most sectors. For the metro Phoenix and
Tucson areas, the data mostly commonly
begins in 1975, although some stretch back
into the 1960s. The extra historical data
allows us to incorporate three business
cycles into employment equations for each
published sector.
We are investigating the possibility of
extending the personal income history.
Without industry detail, we were forced to
significantly restructure the personal income
and wage rate blocks in our models,
essentially eliminating industry detail. We
were able to estimate private (the aggregate
across industries) and government wage
bills (individually for federal civilian, federal
military, and state & local). Similar
aggregation was used for wage rates.
The new Arizona model contains forecasts
for 88 measures of economic activity. The
metro Phoenix model numbers 84, while
metro Tucson has 70. In addition to
employment, wages and personal income,
the models simultaneously determine
population, migration flows, residential
building activity, retail sales, unemployment
and a number of other aggregate economic
measures.

RECENT EVIDENCE
New employment data show that the
recovery is over – and that we have entered
the expansion phase of the new business
cycle. Since bottoming in December 2001,
nonfarm employment in Arizona has grown
1.4% (32,000 new jobs over 18 months). At
2,280,000 (seasonally adjusted),
employment stands at an all-time record
high. Job creation so far has been quite
modest when compared to historical norms,

but the economy is creating jobs – a process
that is expected to accelerate in coming
months (Exhibit 1).
The shaded box in Exhibit 1 marks the
officially recognized period of national
recession. The National Bureau of
Economic Research (NBER) recently
declared that the 2001 recession ended in
November of that year. Even though the
recession ended nearly two years ago,
nonfarm employment nationwide continues
to slide. The Coincident Index, which is
used in the business cycle dating process, is
comprised of four components: nonfarm
payrolls, personal income less transfers,
industrial production, and manufacturing
and trade sales. The other three
components have turned upward, if ever so
slightly, while employment shrinks.
Exhibit 1 suggests that the recession in
Arizona started a couple of months earlier
and lasted a couple of months longer. But,
Arizona’s nonfarm payrolls are in much
better shape than nationwide and are at least
headed in a positive direction. Moreover,
the recession was very mild, much like the
1990-91 recession.
Recent results are quite uneven across
Arizona’s industries. Mining, manufacturing
and information sectors are still declining,
posting job losses over the past 12 months
(ending in June) of 300, 9600 and 3200,
(continued on page 8)
S P O N S O R S

Arizona Department of Commerce
Arizona Joint Legislative Budget Committee
Arizona Public Service Company
Bank One Arizona
CB Richard Ellis
City of Glendale
City of Mesa
City of Tucson
Compass Bank
Elliott D. Pollack and Company
KB Home
Merrill Lynch
Pascua Yaqui Tribe
Pima Association of Governments
Pima County
Salt River Project
Tucson Electric Power Company
Tucson Newspapers
ARIZONA'S ECONOMY

F O R E C A S T

Forecasts for Arizona
Personal Income ($ mill)
percent change
Wage per Employee (Dollars)
percent change
Aggregate Retail Sales ($ mill)*
percent change
Population (000s, mid-year)
percent change
Residential Permits
percent change
Non Farm Employment (000s)
percent change
Goods-Producing
percent change
Service-Providing
percent change
Trade, Trans., & Utilities
percent change
Prof. & Business Services
percent change
Leisure & Hospitality
percent change
Government
percent change
Phoenix-Mesa Metro Area
Personal Income ($ mill)
percent change
Earnings per Employee (Dollars)
percent change
Aggregate Retail Sales ($ mill)*
percent change
Population (000s, mid-year)
percent change
Residential Permits
percent change
Non Farm Employment (000s)
percent change
Goods-Producing
percent change
Service-Providing
percent change
Trade, Trans., & Utilities
percent change
Prof. & Business Services
percent change
Leisure & Hospitality
percent change
Government
percent change
Tucson Metro Area
Personal Income ($ mill)
percent change
Earnings per Employee (Dollars)
percent change
Aggregate Retail Sales ($ mill)*
percent change
Population (000s, mid-year)
percent change
Residential Permits
percent change
Non Farm Employment (000s)
percent change
Goods-Producing
percent change
Service-Providing
percent change
Trade, Trans., & Utilities
percent change
Prof. & Business Services
percent change
Leisure & Hospitality
percent change
Government
percent change

T A B L E S

2002
142486.2
3.8
35225
2.9
56154.5
1.3
5472.8
2.9
63124
12.5
2263.1
-0.1
366.5
-4.8
1896.7
0.9
441.9
0.3
312.2
-2.4
229.2
-0.3
387.5
2.6

2003
148066.1
3.9
36146
2.6
58433.2
4.1
5631.3
2.9
61044
-3.3
2292.4
1.3
365.6
-0.2
1926.9
1.6
449.2
1.7
315.8
1.1
231.7
1.1
390.3
0.7

2004
155988.5
5.4
37290
3.2
60319.4
3.2
5778.1
2.6
53576
-12.2
2355.9
2.8
376.4
3.0
1979.6
2.7
462.4
2.9
326.7
3.5
236.4
2.0
393.1
0.7

2005
166307.7
6.6
38587
3.5
64164.4
6.4
5936.2
2.7
56480
5.4
2446.6
3.8
386.7
2.7
2060.0
4.1
481.3
4.1
348.8
6.8
247.0
4.5
399.7
1.7

2006
177917.8
7.0
39960
3.6
68189.4
6.3
6111.8
3.0
57487
1.8
2535.3
3.6
388.3
0.4
2147.1
4.2
501.4
4.2
373.3
7.0
256.5
3.9
407.5
1.9

2007
191115.0
7.4
41468
3.8
72289.1
6.0
6287.4
2.9
57815
0.6
2627.3
3.6
391.6
0.8
2235.8
4.1
520.8
3.9
396.6
6.2
265.5
3.5
415.8
2.0

2008
207323.6
8.5
43284
4.4
77075.7
6.6
6467.3
2.9
60946
5.4
2736.3
4.2
397.0
1.4
2339.4
4.6
541.9
4.0
421.8
6.3
278.4
4.8
424.2
2.0

98294.3
2.3
36991
1.3
38114.2
0.6
3488.6
3.2
47899
3.9
1600.6
0.2
271.2
-4.4
1329.6
1.2
326.4
0.6
254.6
-1.8
150.6
-1.3
211.6
4.0

101574.5
3.3
37875
2.4
40030.3
5.0
3593.9
3.0
45480
-5.0
1622.4
1.4
270.9
-0.1
1351.6
1.7
332.2
1.8
252.9
-0.7
153.7
2.1
215.0
1.6

107188.9
5.5
39240
3.6
41321.3
3.2
3689.1
2.6
37034
-18.6
1672.0
3.1
282.4
4.3
1389.6
2.8
339.8
2.3
256.5
1.4
163.9
6.6
217.4
1.1

114470.0
6.8
40713
3.8
44340.1
7.3
3800.8
3.0
42839
15.7
1741.3
4.1
289.4
2.5
1451.9
4.5
356.0
4.8
272.7
6.3
173.1
5.6
221.7
2.0

123174.1
7.6
42322
4.0
47598.5
7.3
3921.4
3.2
44573
4.0
1813.1
4.1
293.2
1.3
1520.0
4.7
374.2
5.1
292.8
7.4
181.0
4.6
226.3
2.1

133148.1
8.1
44101
4.2
50811.9
6.8
4043.0
3.1
43015
-3.5
1886.8
4.1
297.5
1.5
1589.3
4.6
392.9
5.0
311.3
6.3
188.0
3.9
230.9
2.0

144478.4
8.5
46082
4.5
54312.4
6.9
4165.8
3.0
41429
-3.7
1964.1
4.1
298.9
0.4
1665.2
4.8
412.8
5.1
329.0
5.7
195.7
4.1
235.2
1.8

22331.4
4.4
30535
1.6
8707.2
0.6
890.5
2.3
7999
-1.9
347.7
0.1
56.3
-2.1
300.5
3.6
55.8
0.9
40.3
-2.5
38.0
-0.5
77.7
1.1

23146.3
3.6
31326
2.6
8998.9
3.4
906.8
1.8
7954
-0.6
353.1
1.5
55.6
-1.2
306.7
2.1
57.0
2.1
41.9
4.0
38.3
0.7
78.5
1.1

24466.4
5.7
32357
3.3
9335.9
3.7
925.9
2.1
7926
-0.4
366.2
3.7
57.3
3.0
318.2
3.7
59.3
4.0
44.9
7.1
40.7
6.3
80.3
2.2

25921.6
5.9
33428
3.3
9803.4
5.0
946.6
2.2
7214
-9.0
380.0
3.8
58.8
2.6
330.6
3.9
61.2
3.3
48.1
7.2
43.2
6.1
82.6
2.9

27732.4
7.0
34571
3.4
10352.4
5.6
968.1
2.3
7298
1.2
395.1
4.0
60.5
3.0
344.0
4.1
63.3
3.4
51.8
7.7
45.3
5.0
85.3
3.2

29916.8
7.9
35831
3.6
11006.3
6.3
991.6
2.4
7603
4.2
412.5
4.4
63.3
4.5
358.8
4.3
65.8
3.9
55.7
7.6
47.5
4.7
88.2
3.5

32392.3
8.3
37259
4.0
11738.8
6.7
1016.8
2.5
7918
4.1
430.8
4.4
65.5
3.6
374.9
4.5
68.5
4.1
60.3
8.2
49.9
5.2
91.3
3.5

* 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
ARIZONA'S ECONOMY

PAGE 7

(continued from page 6)
respectively. Within manufacturing,
computers and electronic products accounts
for 4400 of the losses, aerospace 1300,
fabricated metals 700, and nondurable
goods 300. Today there are only 8,400
miners in Arizona, accounting for less than
four-tenths of one percent.
Financial activities and professional &
business services both are recovering, but
job counts remain below their pre-recession
peaks. Neither industry has shown much
growth in the past six months. However,
these sectors could see significant upwardrevisions next winter when the estimates are
revised in the annual “rebenchmarking”
process.
All remaining sectors report employment
at record levels. Education and health
services, which accounts for 10.5% of all
jobs, has created the largest number of new
jobs during the past year, 13,800.
(Educational services represents private
companies such as the University of Phoenix,
Sylvan Learning Center, Embry Riddle
Aeronautical University, private schools and
many other non tax-supported entities.
Public education is a component of
government.) The construction industry
added 5600 jobs, and trade, transportation
& utilities (TTU) added 3500. Government
payrolls increased by only 1600 during the

past year and virtually none over the past six
months, reflecting budget challenges at state
and local levels. Other services accounts for
1300 and leisure & hospitality for 900 new
jobs. The latter category, which reflects
tourism activity, just recently regained all the
jobs lost in the wake of terrorist attacks at
WTC and Pentagon nearly two years ago and
its pre-recession peak established in the first
quarter of 2001.

THE OUTLOOK FOR ARIZONA
Educational and health services,
construction, retail sectors related to
homebuilding, the federal government and
public education will lead the expansion
going forward. Recent positive news for
manufacturing means that a turnaround is
near, and losses in the information sector
also appear to be moderating. Both should
contribute to job creation soon. Travel and
tourism will continue to improve and
business services will soon be growing
robustly again. Population growth will
continue at high levels and support
residential construction, helping offset rising
interest rates and declining affordability.
Remaining sectors will strengthen so that by
year end, the stage will be set for solid
expansion.
For all of 2003, Arizona will create nearly
30,000 jobs. In 2004, look for 63,000 new

EDUCATIONAL AND HEALTH
SERVICES, CONSTRUCTION,
RETAIL SECTORS RELATED
TO HOMEBUILDING, THE
FEDERAL GOVERNMENT AND
PUBLIC EDUCATION WILL
LEAD THE EXPANSION
GOING FORWARD.

jobs, and over 90,000 the following year.
(Exhibit 2).
Personal income growth will improve
from roughly four percent in 2003 to 5.4%
next year and 6.6% in 2005. Corresponding
growth for retail sales shows improvement
from 2.2% to 3.7% to 6.8%. Residential
construction will backtrack but remain at
lofty levels compared to prior cycles. A
pullback of 10-15% next year is expected.
Forecast for selected measures are shown
in the table on page 7.
The nation’s economists are increasingly
agreeing that the economy will strengthen
significantly in coming months. Our new
models show that we can expect the same
for Arizona. ■

EXHIBIT 1
The Expansion Phase Begins

EXHIBIT 2
Trend-line Growth Expected

Nonfarm Employment, AZ (seasonally adjusted)

Nonfarm Employment, AZ (seasonally adjusted)

PAGE 8

ARIZONA'S ECONOMY

A R I Z O N A

APACHE COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Service-Providing
Trade, Transportation, and Utilities
Other Private Service-Providing
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel
New Housing Units Authorized, Census C-40
Total Units
Single Family Units
NAVAJO COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Natural Resources and Mining
Construction
Manufacturing
Service-Providing
Trade, Transportation, and Utilities
Information
Financial Activities
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel
New Housing Units Authorized, Census C-40
Total Units
Single Family Units

E C O N O M I C

I N D I C A T O R S

% change versus year ago
for most recent:
month
12-months

MAR
2003

APR
2003

MAY
2003

JUN
2003

JUL
2003

21,200
18,300
2,900
13.7

21,275
18,425
2,850
13.4

21,450
18,750
2,700
12.6

22,375
18,425
3,950
17.7

21,975
17,800
4,175
19.0

-2.7
-3.4
0.6
3.3

0.7
-1.0
12.7
12.2

19,025
6,125
725
18,300
1,425
3,975
12,900
2,825
10,075

19,100
6,225
725
18,375
1,425
4,075
12,875
2,800
10,075

19,375
6,400
750
18,625
1,450
4,200
12,975
2,900
10,075

18,800
6,425
750
18,050
1,500
4,175
12,375
2,975
9,400

18,000
6,300
750
17,250
1,500
4,050
11,700
2,575
9,125

-2.3
-6.7
-3.2
-2.3
-16.7
-3.0
0.2
1.0
0.0

-1.2
-3.3
-1.7
-1.2
-3.7
-3.5
-0.1
-0.7
0.1

9,451
4,337
631
4,483
2,244
3,747
731

9,329
4,130
620
4,579
2,385
8,647
731

10,702
4,899
861
4,942
2,879
4,656
1,118

11,584
6,042
966
4,576
2,761
7,637
1,230

...
...
...
...
...
...
...

-0.9
-10.0
-3.6
15.3
1.1
9.4
9.9

6.6
-1.7
-2.3
20.4
-0.1
11.6
4.0

4
4

8
8

13
13

9
9

...
...

28.6
28.6

5.6
5.6

34,350
30,625
3,725
10.8

34,225
30,850
3,375
9.9

34,525
31,100
3,425
9.9

35,725
31,075
4,650
13.0

35,700
30,700
5,000
14.0

-2.1
-1.5
-5.7
-3.6

0.1
-0.6
6.3
6.4

27,550
16,500
3,125
875
1,425
825
24,425
5,500
550
625
925
2,550
2,425
800
11,050
1,425
9,625

27,650
16,675
3,175
900
1,450
825
24,475
5,475
575
625
900
2,550
2,625
750
10,975
1,450
9,525

27,775
17,050
3,225
925
1,475
825
24,550
5,575
550
625
875
2,575
2,850
775
10,725
1,525
9,200

27,375
17,125
3,325
975
1,500
850
24,050
5,600
575
625
850
2,375
3,000
775
10,250
1,600
8,650

26,775
17,100
3,325
950
1,525
850
23,450
5,600
600
575
850
2,350
3,025
775
9,675
1,425
8,250

-0.5
0.6
-2.9
0.0
-6.2
0.0
-0.1
4.2
14.3
0.0
-2.9
-5.1
3.4
-6.1
-2.3
-12.3
-0.3

-0.8
0.5
-3.6
-6.7
-4.1
1.0
-0.5
4.2
4.0
-4.5
9.7
-1.7
-0.4
-3.1
-2.9
-9.5
-1.8

54,964
41,797
4,991
8,176
4,093
8,704
2,064

59,580
44,972
5,085
9,523
4,961
10,263
2,064

67,393
50,080
6,256
11,057
6,443
12,040
2,553

70,639
53,617
6,845
10,177
6,140
14,948
3,045

...
...
...
...
...
...
...

16.2
13.5
-2.5
55.0
35.9
19.8
11.9

9.9
7.9
3.5
32.7
9.3
1.4
-1.0

22
22

39
39

28
28

40
40

...
...

-4.8
8.1

-9.4
-7.2

See sources and abbreviations at the bottom of Page 16.
ARIZONA'S ECONOMY

PAGE 9

A R I Z O N A

GRAHAM COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Service-Providing
Trade, Transportation, and Utilities
Other Private Service-Providing
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting

COCONINO COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Natural Resources and Mining
Construction
Manufacturing
Service-Providing
Trade, Transportation, and Utilities
Information
Financial Activities
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel
New Housing Units Authorized, Census C-40
Total Units
Single Family Units

E C O N O M I C

I N D I C A T O R S

JUL
2003

% change versus year ago
for most recent:
month
12-months

MAR
2003

APR
2003

MAY
2003

JUN
2003

10,150
9,375
775
7.6

10,050
9,350
700
7.0

10,050
9,325
725
7.2

10,100
9,300
800
7.9

9,900
9,025
875
8.8

-10.8
-10.4
-14.6
-4.3

-6.9
-7.4
-1.0
6.1

6,475
4,200
425
6,050
1,475
2,300
2,275
325
1,950

6,475
4,225
425
6,050
1,475
2,325
2,250
325
1,925

6,450
4,300
450
6,000
1,450
2,400
2,150
325
1,825

6,300
4,350
450
5,850
1,500
2,400
1,950
375
1,575

6,025
4,125
425
5,600
1,450
2,250
1,900
400
1,500

-9.4
-6.3
-10.5
-9.3
-1.7
-8.2
-15.6
0.0
-18.9

-8.6
-1.9
-3.2
-9.0
1.3
-3.6
-19.4
4.3
-22.8

15,128
11,599
1,398
2,131
1,067
2,058

15,592
12,072
1,696
1,824
950
3,874

16,246
12,779
1,777
1,690
985
3,308

14,440
11,723
1,439
1,278
771
3,713

...
...
...
...
...
...

7.2
7.8
17.8
-7.5
-18.9
4.8

4.6
2.1
5.2
27.4
4.7
-13.7

64,100
59,950
4,150
6.5

64,400
60,825
3,575
5.6

65,375
61,600
3,775
5.8

68,450
63,450
5,000
7.3

70,050
64,575
5,475
7.8

-2.9
-4.3
15.9
19.4

-1.1
-1.7
8.2
9.4

56,800
38,225
5,475
125
2,175
3,175
51,325
9,500
425
1,400
2,500
6,525
10,675
1,725
18,575
3,075
15,500

57,275
38,625
5,425
125
2,125
3,175
51,850
9,575
425
1,375
2,500
6,550
11,000
1,775
18,650
3,150
15,500

57,200
39,375
5,525
125
2,200
3,200
51,675
9,600
425
1,400
2,550
6,625
11,450
1,800
17,825
3,375
14,450

58,175
40,225
5,575
125
2,250
3,200
52,600
9,725
425
1,425
2,625
6,675
11,950
1,825
17,950
3,600
14,350

58,675
40,750
5,525
125
2,225
3,175
53,150
9,850
425
1,425
2,650
6,775
12,250
1,850
17,925
3,625
14,300

-3.8
0.8
-5.6
0.0
-16.8
4.1
-3.6
0.3
-10.5
-6.6
-5.4
8.0
2.9
4.2
-12.8
-5.2
-14.5

-1.8
2.1
-1.1
-6.3
-13.6
10.9
-1.9
5.5
-11.0
-1.7
-0.6
2.4
1.6
8.2
-9.2
-2.0
-10.7

103,164
66,889
20,433
15,842
7,930
20,622
12,119

106,206
69,471
20,876
15,859
8,261
21,591
12,119

116,644
78,637
23,260
14,747
8,593
23,860
16,515

125,362
83,742
25,426
16,194
9,771
27,336
20,539

...
...
...
...
...
...
...

-14.8
-17.5
-1.4
-18.1
-28.2
9.9
4.1

0.4
-0.3
0.7
3.5
-12.8
7.8
0.4

57
42

79
79

62
62

104
70

...
...

92.6
40.0

-8.1
-14.3

See sources and abbreviations at the bottom of Page 16.
PAGE 10

ARIZONA'S ECONOMY

A R I Z O N A

GREENLEE COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Service-Providing
Trade, Transportation, and Utilities
Other Private Service-Providing
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel*

E C O N O M I C

I N D I C A T O R S

JUL
2003

% change versus year ago
for most recent:
month
12-months

MAR
2003

APR
2003

MAY
2003

JUN
2003

3,775
3,500
275
7.3

3,800
3,525
275
7.2

3,800
3,525
275
7.2

3,900
3,600
300
7.7

3,925
3,600
325
8.3

-2.5
-2.0
-7.1
-4.8

-5.0
-3.1
-22.9
-18.8

3,550
3,025
2,375
1,175
275
375
525
50
475

3,575
3,025
2,375
1,200
275
375
550
50
500

3,550
3,000
2,375
1,175
275
350
550
50
500

3,575
3,050
2,400
1,175
275
375
525
50
475

3,550
3,025
2,375
1,175
275
375
525
50
475

-0.7
-0.8
0.0
-2.1
0.0
-6.3
0.0
0.0
0.0

-3.3
-3.8
-4.8
0.0
-1.5
1.7
-0.4
17.6
-1.7

7,204
6,594
260
350
175
2,735
374

6,898
6,276
218
404
210
1,218
374

6,502
5,931
242
329
192
647
376

5,879
5,414
222
243
146
1,626
421

...
...
...
...
...
...
...

27.1
30.7
2.8
-9.4
-20.6
164.4
-25.5

18.8
21.0
-9.7
7.2
-11.8
72.4
-3.7

81,050
78,325
2,725
3.4

82,275
79,575
2,700
3.3

83,050
80,375
2,675
3.2

82,575
79,800
2,775
3.4

82,800
79,875
2,925
3.5

1.2
1.4
-4.1
-5.3

4.3
4.4
-0.4
-4.4

54,000
43,350
9,450
850
5,400
3,200
44,550
10,250
700
1,800
4,525
7,600
7,325
1,700
10,650
1,250
9,400

54,325
43,625
9,475
850
5,425
3,200
44,850
10,375
700
1,825
4,700
7,625
7,325
1,600
10,700
1,275
9,425

54,750
43,900
9,550
850
5,525
3,175
45,200
10,400
700
1,825
4,700
7,625
7,475
1,625
10,850
1,275
9,575

54,050
44,150
9,675
875
5,600
3,200
44,375
10,225
675
1,850
4,975
7,550
7,525
1,675
9,900
1,300
8,600

53,425
44,200
9,775
875
5,675
3,225
43,650
10,275
675
1,900
4,975
7,475
7,550
1,575
9,225
1,300
7,925

1.7
2.1
-0.8
-5.4
0.0
-0.8
2.3
1.2
3.8
5.6
11.8
0.3
4.5
-8.7
0.0
6.1
-0.9

3.6
4.3
1.8
-10.5
3.6
2.4
4.1
2.8
9.0
4.8
16.6
3.4
5.5
-5.5
1.2
4.8
0.7

125,338
93,915
16,954
14,469
7,243
33,761
6,736

126,842
96,618
16,269
13,955
7,269
41,260
6,736

132,698
101,308
17,689
13,701
7,983
39,654
7,300

133,720
103,573
17,658
12,489
7,535
44,656
7,019

...
...
...
...
...
...
...

9.6
13.0
-13.5
25.2
9.8
12.2
6.1

6.1
6.0
-0.6
18.9
-4.0
6.3
-1.9

222
202

222
188

233
217

256
238

...
...

7.1
12.3

31.9
16.3

* Includes Graham County data.
YAVAPAI COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Natural Resources and Mining
Construction
Manufacturing
Service-Providing
Trade, Transportation, and Utilities
Information
Financial Activities
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel
New Housing Units Authorized, Census C-40
Total Units
Single Family Units

See sources and abbreviations at the bottom of Page 16.
ARIZONA'S ECONOMY

PAGE 11

A R I Z O N A

GILA COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Service-Providing
Trade, Transportation, and Utilities
Other Private Service-Providing
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel

MOHAVE COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Natural Resources and Mining
Construction
Manufacturing
Service-Providing
Trade, Transportation, and Utilities
Information
Financial Activities
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel
New Housing Units Authorized, Census C-40
Total Units
Single Family Units

E C O N O M I C

I N D I C A T O R S

% change versus year ago
for most recent:
month
12-months

MAR
2003

APR
2003

MAY
2003

JUN
2003

JUL
2003

17,850
16,250
1,600
9.0

17,700
16,250
1,450
8.2

18,025
16,575
1,450
8.0

18,025
16,525
1,500
8.3

18,225
16,675
1,550
8.5

-6.5
-6.5
-7.5
-1.0

-4.3
-5.2
7.1
12.1

13,125
8,550
2,050
11,075
2,050
4,450
4,575
450
4,125

13,050
8,375
2,000
11,050
1,950
4,425
4,675
475
4,200

13,300
8,550
2,000
11,300
2,000
4,550
4,750
525
4,225

13,125
8,650
1,975
11,150
1,975
4,700
4,475
550
3,925

13,075
8,700
1,950
11,125
1,950
4,800
4,375
550
3,825

-5.4
-5.7
-16.1
-3.3
-11.4
2.1
-4.9
-15.4
-3.2

-5.4
-6.0
-14.8
-3.4
-6.8
-1.0
-4.3
-14.1
-2.9

27,267
18,561
3,616
5,090
2,548
5,874
687

27,569
18,956
3,366
5,247
2,733
6,753
687

29,949
20,903
4,363
4,683
2,728
7,439
895

29,711
21,478
4,348
3,885
2,344
8,897
990

...
...
...
...
...
...
...

8.6
8.0
-1.8
27.5
11.8
-12.0
25.5

0.6
-1.6
-2.7
19.8
-2.9
0.8
-10.4

73,850
70,225
3,625
4.9

74,250
70,850
3,400
4.6

74,950
71,525
3,425
4.6

75,775
71,975
3,800
5.0

76,525
72,450
4,075
5.3

0.5
0.8
-5.8
-6.2

1.8
1.9
0.3
-1.5

45,450
37,275
8,875
75
5,800
3,000
36,575
9,775
925
1,475
3,350
5,650
4,975
2,250
8,175
500
7,675

45,725
37,550
8,825
75
5,725
3,025
36,900
9,850
900
1,525
3,375
5,700
5,150
2,225
8,175
500
7,675

45,900
37,875
8,800
75
5,675
3,050
37,100
9,800
900
1,550
3,525
5,750
5,325
2,225
8,025
475
7,550

45,300
37,650
8,625
75
5,475
3,075
36,675
9,775
925
1,575
3,550
5,675
5,275
2,250
7,650
500
7,150

44,925
37,725
8,750
75
5,525
3,150
36,175
9,750
900
1,575
3,525
5,775
5,225
2,225
7,200
500
6,700

3.4
3.1
0.0
-25.0
-1.3
3.3
4.3
-1.5
0.0
1.6
8.5
9.0
7.7
6.0
5.1
-4.8
5.9

2.8
2.0
0.2
-14.0
0.7
-0.2
3.4
-0.3
0.2
1.4
7.3
6.5
0.3
7.0
6.5
-4.0
7.2

126,726
93,929
14,075
18,722
9,372
29,433
3,450

126,976
95,163
14,255
17,558
9,146
35,539
3,450

127,300
97,044
13,805
16,451
9,586
8,600
3,843

122,586
94,222
13,130
15,234
9,191
34,539
3,894

...
...
...
...
...
...
...

3.6
3.1
2.9
7.1
-6.1
11.2
24.6

10.8
9.7
3.6
27.6
4.9
2.3
4.8

318
262

272
262

304
246

338
326

...
...

47.6
48.9

26.7
19.7

See sources and abbreviations at the bottom of Page 16.
PAGE 12

ARIZONA'S ECONOMY

A R I Z O N A

LA PAZ COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Service-Providing
Trade, Transportation, and Utilities
Other Private Service-Providing
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel

YUMA METROPOLITAN REGION
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Natural Resources and Mining
Construction
Manufacturing
Service-Providing
Trade, Transportation, and Utilities
Information
Financial Activities
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel
New Housing Units Authorized, Census C-40
Total Units
Single Family Units

E C O N O M I C

I N D I C A T O R S

JUL
2003

% change versus year ago
for most recent:
month
12-months

MAR
2003

APR
2003

MAY
2003

JUN
2003

6,700
6,275
425
6.3

6,600
6,200
400
6.1

6,575
6,150
425
6.5

6,975
6,475
500
7.2

7,175
6,625
550
7.7

0.0
-1.9
29.4
29.4

3.8
3.0
17.3
13.0

4,925
2,550
300
4,625
1,250
1,000
2,375
175
2,200

4,900
2,550
325
4,575
1,275
950
2,350
150
2,200

4,875
2,525
325
4,550
1,250
950
2,350
175
2,175

4,975
2,600
350
4,625
1,250
1,000
2,375
175
2,200

5,000
2,525
325
4,675
1,200
1,000
2,475
125
2,350

-0.5
-5.6
-13.3
0.5
-4.0
-4.8
5.3
-16.7
6.8

1.8
-3.0
-6.6
2.4
1.5
-7.2
7.6
6.9
7.6

17,537
9,590
2,274
5,673
2,840
1,637
469

14,745
7,864
1,700
5,181
2,699
2,146
469

14,319
7,947
1,808
4,564
2,659
2,552
432

13,201
7,268
1,849
4,084
2,464
714
500

...
...
...
...
...
...
...

9.4
4.1
16.8
16.4
2.1
-65.8

4.7
-1.0
-1.3
22.7
-1.1
-25.5
-1.4

66,175
56,000
10,175
15.4

68,575
53,575
15,000
21.9

75,025
52,050
22,975
30.6

75,975
52,350
23,625
31.1

77,675
51,775
25,900
33.3

-1.3
-2.5
1.3
2.6

4.8
3.2
10.3
5.7

46,000
32,750
5,750
25
3,600
2,125
40,250
9,775
1,050
1,400
2,875
5,650
4,750
1,500
13,250
2,750
10,500

44,175
30,675
5,475
25
3,600
1,850
38,700
8,250
1,050
1,375
2,825
5,525
4,700
1,475
13,500
2,725
10,775

42,725
29,250
5,350
25
3,600
1,725
37,375
7,375
1,100
1,350
2,700
5,400
4,550
1,425
13,475
2,725
10,750

41,500
29,000
5,350
25
3,625
1,700
36,150
7,400
1,100
1,350
2,650
5,400
4,350
1,400
12,500
2,725
9,775

40,550
28,925
5,375
25
3,725
1,625
35,175
7,400
1,100
1,325
2,675
5,400
4,350
1,300
11,625
2,725
8,900

-0.6
-0.3
2.4
0.0
8.8
-9.7
-1.1
-7.5
10.0
3.9
0.0
5.9
0.0
-3.7
-1.5
-0.9
-1.7

2.5
1.1
2.6
0.0
11.2
-10.7
2.5
-2.9
9.9
4.7
1.0
8.6
-2.5
-3.1
6.1
2.2
7.2

123,118
92,015
13,883
17,220
8,620
14,924
3,366

105,128
80,968
10,208
13,952
7,268
27,048
3,366

89,870
66,891
10,527
12,452
7,255
24,681
2,487

94,080
72,390
10,388
11,302
6,819
22,753
1,618

...
...
...
...
...
...
...

1.4
0.1
7.6
4.2
-8.6
13.3
-9.2

7.7
5.8
5.1
24.8
1.4
9.1
9.8

134
134

162
162

179
176

181
181

...
...

63.1
63.1

35.1
28.6

See sources and abbreviations at the bottom of Page 16.
ARIZONA'S ECONOMY

PAGE 13

A R I Z O N A

SANTA CRUZ COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Service-Providing
Trade, Transportation, and Utilities
Other Private Service-Providing
Government
Federal Government
State and Local Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel
New Housing Units Authorized, Census C-40
Total Units
Single Family Units
COCHISE COUNTY
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Total Private
Goods-Producing
Natural Resources and Mining
Construction
Manufacturing
Service-Providing
Trade, Transportation, and Utilities
Information
Financial Activities
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Federal Government
State and Local Government
Sales ($000) ADOR
Gross Retail
Retail
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Hotel/Motel
New Housing Units Authorized, Census C-40
Total Units
Single Family Units

E C O N O M I C

I N D I C A T O R S

% change versus year ago
for most recent:
month
12-months

MAR
2003

APR
2003

MAY
2003

JUN
2003

JUL
2003

13,950
12,675
1,275
9.1

13,975
12,675
1,300
9.3

13,925
12,575
1,350
9.7

14,475
12,675
1,800
12.4

14,525
12,150
2,375
16.4

-2.2
-1.0
-7.8
-5.7

1.7
2.2
-1.2
-3.2

12,600
9,450
1,325
11,275
5,275
2,850
3,150
1,075
2,075

12,550
9,400
1,350
11,200
5,225
2,825
3,150
1,100
2,050

12,425
9,250
1,350
11,075
5,125
2,775
3,175
1,125
2,050

12,275
9,100
1,350
10,925
4,975
2,775
3,175
1,100
2,075

11,650
9,025
1,325
10,325
4,900
2,800
2,625
1,175
1,450

0.4
5.9
0.0
0.5
12.0
-0.9
-14.6
0.0
-23.7

1.8
3.0
-0.8
2.1
7.3
-2.1
-1.6
0.4
-2.6

32,983
24,846
3,105
5,032
2,519
4,013
1,091

31,730
23,733
2,951
5,046
2,628
5,960
1,091

32,893
24,511
3,254
5,128
2,988
5,551
835

30,716
23,874
2,850
3,992
2,408
7,760
666

...
...
...
...
...
...
...

13.8
11.4
10.6
34.0
17.5
48.3
-8.6

8.0
5.2
5.0
35.2
8.5
12.0
7.3

51
45

54
51

41
41

38
38

...
...

2.7
8.6

12.7
30.0

46,125
43,450
2,675
5.8

46,325
43,725
2,600
5.6

46,675
44,100
2,575
5.5

46,250
43,600
2,650
5.7

46,025
43,275
2,750
6.0

-1.8
-2.0
0.9
2.8

3.6
3.3
7.3
3.8

34,325
22,725
3,100
25
2,125
950
31,225
5,900
500
850
3,500
3,575
4,200
1,100
11,600
4,500
7100

34,350
22,825
3,125
25
2,125
975
31,225
5,925
500
900
3,500
3,600
4,150
1,125
11,525
4,500
7025

34,550
22,950
3,125
25
2,125
975
31,425
5,950
500
875
3,600
3,600
4,175
1,125
11,600
4,525
7075

33,825
22,675
3,075
50
2,100
925
30,750
5,950
500
875
3,450
3,600
4,075
1,150
11,150
4,600
6550

33,225
22,800
3,050
50
2,075
925
30,175
5,950
500
875
3,575
3,650
4,050
1,150
10,425
4,625
5800

-0.9
0.9
0.0
100.0
-4.6
8.8
-1.0
0.0
5.3
0.0
-0.7
0.0
5.2
0.0
-4.6
1.6
-9.0

2.8
3.5
4.8
16.7
2.6
10.0
2.6
1.7
1.7
8.0
0.5
1.8
8.7
4.4
1.4
2.6
0.6

72,209
55,087
8,584
8,538
4,274
13,442
2,729

61,516
50,974
2,655
7,887
4,108
22,162
2,729

69,969
54,880
7,762
7,327
4,269
14,994
2,363

67,808
54,420
8,172
5,216
3,147
17,043
1,734

...
...
...
...
...
...
...

14.0
21.1
2.7
-21.1
-30.8
33.1
-14.2

6.7
6.3
-3.8
24.2
2.4
18.6
1.8

72
72

70
70

56
56

68
68

...
...

6.3
6.3

10.0
9.6

See sources and abbreviations at the bottom of Page 16.
PAGE 14

ARIZONA'S ECONOMY

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
Natural Resources and Mining
Construction
Manufacturing
Computer and Electronic Prod.
Aerospace Products and Parts
Wholesale Trade
Retail Trade
Transp., Warehousing, and Utilities
Information
Financial Activities
Professional and Business Services
Educational and Health Services
Arts, Entertainment, and Recreation
Accommodation
Food Svcs and Drinking Places
Other Services
Federal Government
State and Local Government
State and Local Government Education
Sales ($000s) ADOR
Aggregate Retail Sales
Retail
Food, EBR
Restaurants & Bars
Gasoline, EBR
Contracting
Hotel/Motel
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
2003

APR
2003

MAY
2003

JUN
2003

426.2
407.2
19.0
4.6

428.3
410.3
18.0
4.6

429.7
411.2
18.5
4.6

425.9
406.4
19.5
4.5

424.4
403.3
21.1
4.8

6.7
6.6
9.3
2.1

4.4
4.4
6.4
0.2

349.5
1.4
22.9
29.2
5.6
12.0
7.3
40.2
7.7
7.5
14.6
40.2
44.6
5.6
7.7
25.5
14.7
9.5
70.9
47.2

350.8
1.4
22.9
29.2
5.6
12.0
7.2
40.1
7.7
7.4
14.7
40.3
45.1
5.7
7.6
26.0
14.8
9.5
71.2
47.6

350.8
1.4
23.5
29.2
5.5
11.9
7.2
40.3
7.8
7.3
14.8
40.0
45.1
5.4
7.6
25.5
15.0
9.5
71.2
47.4

343.5
1.4
24.0
29.2
5.6
11.9
7.2
40.7
7.8
7.3
14.8
40.1
45.2
5.5
7.4
24.7
15.1
9.6
63.5
38.9

337.5
1.4
23.7
29.1
5.5
11.9
6.9
40.6
7.7
7.3
14.8
39.8
45.5
5.2
7.3
24.3
14.9
9.7
59.3
34.6

1.0
-6.7
5.8
-4.9
-5.2
-6.3
-4.2
3.8
1.3
-6.4
3.5
-3.2
3.9
-3.7
-2.7
1.7
2.8
4.3
2.2
3.9

0.4
-13.1
2.3
-6.6
-5.6
-8.2
-1.6
3.3
-6.3
-3.9
1.5
-0.4
3.9
0.9
-4.0
1.7
2.1
3.5
0.3
0.8

789,495
526,526
100,436
95,343
67,190
131,565
34,158

766,697
518,242
102,078
85,822
60,555
138,444
34,158

768,370
519,114
100,366
93,390
55,500
139,913
21,021

741,660
513,706
98,228
79,127
50,599
137,597
16,408

...
...
...
...
...
...
...

-7.1
-10.7
5.8
-4.4
5.9
5.1
-10.9

0.9
-0.7
1.6
0.2
21.6
3.7
3.3

651
643
8

869
779
90

515
514
1

786
689
98

...
...
...

29.7
17.2
425.0

2.2
5.6
-14.0

189,194
1,102
171,683

226,515
1,249
181,357

242,604
1,336
181,590

254,199
1,299
195,688

239,870
1,300
184,515

20.4
11.5
8.0

18.2
10.4
7.1

345,308
22,864

305,450
22,053

303,438
24,261

281,737
20,573

286,022
18,454

2.7
-15.0

3.3
3.3

II
2002

III
2002

IV
2002

I
2003

II
2003

888.1
1.1
3.0
1.9
3.4

892.4
1.1
3.1
1.9
3.1

896.3
1.2
3.1
1.9
2.8

900.4
1.2
3.1
1.9
2.9

904.6
1.2
3.2
2.0
3.1

1.9
6.7
3.5
1.6
-8.3

2.0
-0.3
1.7
3.0
-23.0

22,236
13,514
824
110
5,342
4,094
25,036

22,430
13,642
833
111
5,339
4,172
25,135

22,629
13,798
844
113
5,335
4,228
25,247

22,726
13,813
848
113
5,313
4,334
25,240

22,973
14,025
862
115
5,318
4,376
25,395

3.3
3.8
4.5
4.9
-0.4
6.9
1.4

3.7
2.8
3.7
3.2
0.4
11.5
1.7

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 recent:
month
12-months

MAR
2003

% change versus year ago
for most recent:
quarter
4-quarters

See sources and abbreviations at the bottom of Page 16.
ARIZONA'S ECONOMY

PAGE 15

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
Natural Resources and Mining
Construction
Durable Goods
Fabricated Metal Products
Computer and Electronic Prod.
Aerospace Products and Parts
Non-Durable Goods
Wholesale Trade
Retail Trade
Utilities
Transportation and Warehousing
Information
Finance and Insurance
Real Estate, Rental, and Leasing
Professional and Business Services
Educational Services
Health Care and Social Assistance
Arts, Entertainment, and Recreation
Accommodation
Food Svcs and Drinking Places
Other Services
Federal Government
State and Local Government
State and Local Government Education
Sales ($000s) ADOR
Aggregate Retail Sales
Retail
Food, EBR
Restaurants & Bars
Gasoline, EBR
Contracting
Hotel/Motel
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

% change versus year ago
for most recent:
month
12-months

MAR
2003

APR
2003

MAY
2003

JUN
2003

JUL
2003

1,777.1
1,685.8
91.3
5.4

1,787.3
1,695.7
91.6
5.5

1,792.5
1,699.9
92.6
5.4

1,794.4
1,699.3
95.1
5.2

1,796.5
1,696.1
100.4
5.5

-0.4
-0.1
-4.2
-3.5

0.9
0.9
0.9
-0.2

1,606.6
2.3
124.6
103.6
12.6
39.2
15.2
27.3
76.9
189.5
7.5
52.0
36.6
95.9
34.1
254.9
23.7
136.3
21.6
26.4
111.5
62.7
22.1
197.1
103.0

1,610.9
2.3
126.3
103.4
12.5
39.1
15.3
27.4
76.6
189.2
7.5
51.9
36.9
95.9
34.2
255.9
24.0
136.9
21.9
26.2
112.2
63.0
22.0
197.2
102.4

1,610.9
2.3
127.7
102.5
12.5
38.5
15.3
27.2
77.0
189.1
7.4
51.9
36.3
95.6
34.2
256.7
24.0
137.4
21.7
26.0
111.8
63.5
21.9
196.7
101.7

1,594.6
2.4
128.5
102.6
12.4
38.5
15.4
27.3
76.8
188.7
7.4
52.4
36.1
95.8
34.5
257.3
23.1
138.6
20.8
25.1
110.1
64.1
21.8
181.2
84.8

1,576.6
2.3
129.5
102.7
12.5
38.3
15.3
27.2
76.4
187.9
7.4
52.5
36.0
95.8
34.8
259.2
23.1
138.9
20.0
24.6
106.8
63.2
21.8
166.5
70.2

0.8
-4.2
2.9
-7.3
-3.8
-11.1
-0.6
-2.2
-1.7
0.8
-6.3
2.3
-6.3
-0.7
2.7
1.4
12.1
6.7
3.6
1.7
0.8
3.4
5.3
-0.7
0.0

0.6
-0.7
0.3
-8.4
-5.5
-12.0
-1.8
-2.3
-1.3
1.9
-3.3
3.0
-8.3
-1.7
2.0
0.9
10.4
5.8
3.3
-1.1
1.5
2.6
5.2
1.9
3.5

3,573,148
2,396,992
429,011
471,915
275,230
668,026
151,926

3,404,501
2,306,796
436,026
402,955
258,723
671,656
151,926

3,461,160
2,387,987
428,712
410,773
233,688
724,978
81,895

3,431,645
2,406,089
419,580
391,629
214,347
780,166
63,658

...
...
...
...
...
...
...

7.6
6.7
9.3
5.3
20.8
10.8
0.3

4.5
2.7
4.4
4.6
29.7
-3.1
9.1

3,885
3,714
23
148

4,078
3,835
64
179

4,384
3,933
17
434

5,633
4,482
47
1,104

...
...
...
...

13.9
24.2
51.6
-15.5

16.0
17.3
-18.1
11.4

1,186,792
6,167
192,442

1,331,555
6,960
191,315

1,431,514
7,073
202,391

1,464,303
7,134
205,257

1,473,411
7,341
200,710

32.5
26.0
5.2

22.4
14.7
6.7

3,430,332
46,898

3,129,194
45,666

3,218,378
45,695

3,299,320
44,698

...
...

4.1
-2.6

7.1
2.9

See sources and abbreviations below.
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
ASPB: Arizona State Parks Board
BEA: Bureau of Economic Analysis, U.S. Department
of Commerce
PAGE 16

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
NPS: National Park Service, U.S. Department
of the Interior

PSIA: Phoenix Skyharbor International Airport
SAAR: Seasonally adjusted at annual rates
TAA: Tucson Airport Authority
TAR: Tucson Association of Realtors
USBCBP: U.S. Bureau of Customs and Border Protection,
U.S. Department of Homeland Security
U.S. Bankruptcy Court, District of Arizona

ARIZONA'S ECONOMY

A R I Z O N A

E C O N O M I C

II
2002

III
2002

PHOENIX-MESA METROPOLITAN REGION (MARICOPA AND PINAL) - QUARTERLY DATA
Demographics & Vital Statistics (000s, seas adj) ADHS & EBR
Population
3,475.2
3,501.8
Natural Increase
8.3
8.2
Births
14.6
14.6
Deaths
6.2
6.3
Net Migration
18.8
18.3
Personal Income by Source ($mil, SAAR) EBR
Total Personal Income
97,864
98,619
Earnings by Place of Work
72,823
73,440
Less: Contributions for Social Insurance
4,616
4,662
Plus: Adjustment for Residence
-56
-55
Plus: Dividends, Interest & Rents
17,298
17,194
Plus: Transfer Payments
12,414
12,701
Per Capita Personal Income ($, SAAR) EBR
28,160
28,163
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 EBR
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

I
2003

II
2003

3,529.7
8.2
14.5
6.4
19.7

3,555.9
8.0
14.5
6.4
18.2

3,581.1
8.0
14.5
6.5
17.2

3.0
-4.1
-0.6
4.1
-8.4

3.1
-3.4
-0.2
4.1
-3.4

99,488
74,203
4,715
-54
17,091
12,963
28,186

99,691
74,230
4,731
-53
16,941
13,305
28,035

100,836
75,288
4,799
-52
16,860
13,539
28,158

3.0
3.4
4.0
7.4
-2.5
9.1
-0.0

2.7
2.5
3.3
3.6
-2.0
11.0
-0.5

5,453.6
11.2
21.9
10.6
27.1

5,491.1
11.5
22.0
10.4
25.2

5,529.0
11.8
21.9
10.1
27.1

5,569.4
12.5
21.8
9.3
29.4

5,610.8
12.0
21.8
9.8
28.9

2.9
6.8
-0.2
-7.5
6.4

2.8
9.3
1.7
-6.1
1.9

142,161
99,242
6,220
598
27,369
21,176

143,401
100,236
6,298
602
27,326
21,537

144,580
101,151
6,358
606
27,178
22,005

146,116
102,418
6,494
612
27,084
22,497

147,301
103,200
6,540
615
26,989
23,039

3.6
4.0
5.2
2.9
-1.4
8.8

4.1
3.7
5.2
17.5
0.7
10.2

79,824
9,077
10,339
286
10,053
26,067
34,770

80,381
9,311
10,609
446
10,163
26,115
34,820

80,884
9,514
10,964
607
10,357
26,149
35,158

81,821
9,660
11,023
506
10,518
26,235
35,395

82,243
9,752
...
...
...
26,253
...

3.0
7.4
1.3
-49.2
6.4
0.7
2.7

2.6
9.8
5.1
-9.9
5.9
1.2
1.9

MAR
2002

APR
2003

MAY
2003

JUN
2003

JUL
2003

TRAVEL AND TOURISM - MONTHLY DATA

Recreational Areas, NPS & ASPB
Northern Arizona
Historical
Scenic
Water Based Recreation
Southern Arizona
Historical
Scenic
Water Based Recreation
International Border Crossings, USBCBP
U.S. Citizens
Aliens

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 recent:
quarter
4-quarters

IV
2002

% change versus year ago
for most recent:
month
12-months

1,186,004
137,418
411,482
637,104
420,241
60,572
314,280
45,389

1,525,639
164,023
505,138
856,478
293,934
42,678
206,294
44,962

1,935,798
156,556
588,129
1,191,113
215,112
28,258
145,076
41,778

2,196,131
156,177
768,363
1,271,591
163,277
21,215
96,026
46,036

2,332,444
155,995
836,502
1,339,947
155,287
20,235
99,009
36,043

3.1
0.0
4.9
2.4
-13.4
-16.8
-11.0
-17.7

-1.4
-1.6
0.3
-2.4
-6.3
-10.1
-3.7
-14.0

757,747
1,939,893

696,639
1,840,499

796,528
2,069,786

748,492
1,952,487

722,073
1,512,451

-15.9
-33.7

4.1
2.0

184.2
180.3

183.8
179.8

183.5
179.4

183.7
179.6

183.9
179.6

2.1
2.0

2.3
2.2

See sources and abbreviations at the bottom of Page 16.
ARIZONA'S ECONOMY

PAGE 17

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
Natural Resources and Mining
Construction
Durable Goods Manufacturing
Fabricated Metal Products
Computer and Electronic Prod.
Aerospace Products and Parts
Non-Durable Goods Manufacturing
Wholesale Trade
Retail Trade
Utilities
Transportation and Warehousing
Information
Finance and Insurance
Real Estate, Rental, and Leasing
Professional and Business Services
Educational Services
Health Care and Social Assistance
Arts, Entertainment, and Recreation
Accommodation
Food Svcs and Drinking Places
Other Services
Federal Government
State and Local Government
State and Local Government Education
Hours Worked Per Week, Manufacturing, ADES
Average Hourly Earnings ($) ADES
Construction
Manufacturing
Trade, Transportation, 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
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 recent:
month
12-months

MAR
2003

APR
2003

MAY
2003

JUN
2003

JUL
2003

2,642.7
2,498.0
144.7
5.9

2,659.1
2,511.8
147.3
6.0

2,675.6
2,518.8
156.8
5.9

2,680.9
2,514.9
166.0
5.9

2,685.3
2,507.9
177.4
6.1

-0.5
-0.3
-2.7
-3.2

1.0
0.9
2.4
1.1

2,286.7
8.4
172.7
140.1
16.8
45.6
27.3
35.8
94.7
274.3
10.8
65.9
49.2
109.3
44.4
315.6
34.0
209.3
30.6
42.9
162.3
87.6
49.9
348.9
190.2
40.1

2,292.1
8.5
174.8
140.1
16.6
45.5
27.3
35.8
93.4
273.4
10.8
65.6
49.3
109.0
44.6
316.5
34.2
210.5
31.0
42.9
163.6
88.0
50.2
349.9
190.5
40.4

2,291.5
8.5
176.8
139.3
16.7
45.0
27.3
35.5
93.3
273.7
10.8
65.7
48.7
108.9
44.7
316.6
34.1
211.1
30.9
42.9
163.0
88.5
50.8
347.7
188.4
40.6

2,263.1
8.6
178.0
139.5
16.7
44.9
27.4
35.7
92.9
273.5
10.8
66.2
48.5
109.1
44.9
317.4
32.3
212.4
30.1
42.0
160.4
89.4
51.4
320.0
157.4
40.7

2,234.8
8.6
178.8
139.6
16.7
44.7
27.4
35.7
92.2
272.0
10.9
66.1
48.5
108.9
45.2
319.6
32.2
213.0
29.2
41.5
156.3
87.9
51.0
297.6
134.6
40.1

0.6
-4.4
3.4
-5.9
-1.8
-9.7
-3.9
-0.8
-1.4
0.9
-3.5
1.7
-5.1
-0.9
1.3
0.6
7.7
6.0
0.3
-0.5
0.6
2.3
3.2
-0.8
-0.3
-0.5

0.7
-5.5
1.5
-7.4
-4.5
-10.8
-5.9
-1.8
-0.8
2.3
-2.2
2.3
-6.1
-1.5
0.8
0.9
8.7
5.7
2.8
-2.5
1.1
1.0
3.0
0.9
1.7
-0.8

14.97
14.28
13.50
11.55
16.48

15.02
14.23
13.31
11.52
16.32

15.13
14.32
13.43
11.58
16.65

15.40
14.33
13.49
11.56
17.15

15.51
14.57
13.47
11.58
16.99

8.3
2.8
2.9
4.2
2.5

3.6
1.6
1.9
1.0
6.8

5,199,682
3,442,677
651,396
657,462
448,148
224,332
406,576
249,942
86,019
300,696
940,541
26,573
219,899

4,987,252
3,336,235
662,048
568,676
420,293
218,937
407,651
216,830
67,650
270,281
996,561
20,316
167,866

5,065,878
3,432,911
650,942
595,767
386,258
225,066
439,315
210,719
65,125
256,637
1,012,873
26,230
141,634

5,011,760
3,457,558
637,076
563,509
353,616
213,356
602,471
323,569
62,836
283,796
1,109,385
32,526
121,722

...
...
...
...
...
...
...
...
...
...
...
...
...

4.0
3.2
4.0
2.6
14.6
0.5
9.0
13.6
-2.0
-2.6
10.4
17.5
0.1

4.0
2.6
2.4
3.3
26.1
3.1
1.4
-2.9
4.5
-7.1
-0.7
53.4
3.1

5,260
4,983
67
210

5,642
5,282
105
255

5,702
5,172
80
450

7,263
5,973
133
1,157

...
...
...
...

17.0
23.9
129.3
-12.9

15.0
14.5
4.1
20.5

2,773
2,202
44
527

2,944
2,336
22
586

2,804
2,302
13
489

2,897
2,344
27
526

2,760
2,268
43
449

9.2
9.7
48.3
4.4

14.5
15.1
-10.1
13.7

See sources and abbreviations at the bottom of Page 16.
PAGE 18

ARIZONA'S ECONOMY

A R I Z O N A

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 (1996=100) BEA
Gross Domestic Product
Personal Consumption Expenditures

E C O N O M I C

I N D I C A T O R S

III
2002

IV
2002

I
2003

184.8
179.8
175.8

185.2
180.6
176.6

185.7
181.2
177.2

188.0
183.0
179.1

188.5
183.7
179.6

2.0
2.1
2.1

2.1
2.2
2.2

110.5
110.9

110.8
111.4

111.2
111.9

111.9
112.6

112.1
112.7

1.5
1.7

1.3
1.8

CHANGE OF ADDRESS

Attach old label or fill in old address in shaded box below.

NEW Address:

Mail to: Economic and Business

Name: __________________________________________________________
Organization:______________________________________________________
Title: ____________________________________________________________
Address: ________________________________________________________
City: ____________________________________________________________
State: ____________________________________

II
2003

% change versus year ago
for most recent:
quarter
4-quarters

II
2002

Research Publications
McClelland Hall 103
The University of Arizona
PO Box 210108
Tucson, Arizona 85721-0108

Zip: ________________

Telephone: ________________ E-mail: ________________________________

Name: ____________________________________________________________
Organization: ______________________________________________________
Title: ____________________________________________________________
Address: __________________________________________________________
City:______________________________________________________________
State: ________________________________________

Zip: _______________

Telephone: ________________________________________________________

10/03
TO ORDER
Check the appropriate box below and include a check or money order, where applicable.

Arizona’s Economy—now also available on-line!
❑ Electronic subscription (Please notify me via e-mail when each new quarterly issue is posted
on your Web site. Do not send hard copy.)
❑ Printed subscription only, please:
❑ free of charge in the United States ❑ $12.00 (U.S.) international subscription
❑ Both of the above
Arizona Economic Indicators
❑ $19.00 in the U.S. (Fall 2003 and Spring 2004)
❑ $25.00 (U.S.) international subscription (Fall 2003 and Spring 2004)
❑ $10.00 single issue U.S. (specify issue) ❑ $13.00 single issue international (specify issue)
2003 Arizona Statistical Abstract (prices include shipping and handling)
❑ $54.95 in the U.S.
❑ $70.00 international

CLIP & MAIL

1993 Arizona Statistical Abstract (prices include shipping and handling)
❑ $27.95 in the U.S.
❑ $36.00 international

ARIZONA’S ECONOMY IS PUBLISHED QUARTERLY BY THE
ELLER COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION,
THE UNIVERSITY OF ARIZONA, TUCSON, ARIZONA 85721.
520-621-2155.
COPYRIGHT 2003 BY THE UNIVERSITY OF ARIZONA.
REQUESTS FOR COPIES, PERMISSION TO REPRINT AND CHANGE
OF ADDRESS NOTICES SHOULD BE DIRECTED TO THE STAFF.
DEAN ...............................................................MARK ZUPAN
DIRECTOR, ECONOMIC
AND BUSINESS RESEARCH .........................MARSHALL J. VEST
PUBLICATIONS COORDINATOR......................MARSHA DEAN

Name: _________________________________________E-mail: ________________________________________
Title: __________________________________________Organization: ___________________________________
Address: _____________________________________________________________________________________

ECONOMIC AND BUSINESS
RESEARCH PROGRAMS
520-621-2155

City: __________________________________________State: ____________Zip:________________- _________
Country: _____________________Telephone: ( )_______________________Fax: ( ) ______________________
Total amount enclosed: $ __________________________

Please make check or money order payable to: Economic and Business Research
Mail to: Economic and Business Research Publications, McClelland Hall 103,
The University of Arizona, PO Box 210108, Tucson, Arizona 85721-0108

Visit our Web site! ebr.eller.arizona.edu
Made possible through the support of Bank One

ARIZONA'S ECONOMY

ECONOMIC IMPACT
& FISCAL ANALYSIS ......................ALBERTA CHARNEY
621-2291
FORECASTING PROJECT .................MARSHALL J. VEST
621-4075
STATE DATA CENTER...........................PIA MONTOYA
621-2523
DATA REFERENCE..................................VALORIE RICE
621-2109
EBR WEBMASTER .......................MAILE NADELHOFFER
621-4050

PAGE 19

GOOD DECISIONS NEED
GOOD INFORMATION
Your Input Counts!

Printing and mailing

Don't guess when it comes to emerging
economic trends. Register your views with the
Arizona Business Leaders Confidence Index®,
and you'll get a clearer picture of what's in
store for the local economy and your business.

for this issue of
Arizona’s Economy
made possible by

Go to www.blcindex.com and take a few
minutes to register. You’ll be notified by
e-mail when the next survey opens (the last
month of each quarter).
All information provided remains confidential.
Your participation ensures access to survey
results before they're made public. This
enables you to base your business decisions
on the most current information available.
Register today!

PRSRT. STD.
U.S. POSTAGE
P A I D
TUCSON, ARIZONA

PUBLICATIONS OFFICE
ELLER COLLEGE OF BUSINESS
AND PUBLIC ADMINISTRATION
MCCLELLAND HALL 103
PO BOX 210108
TUCSON, ARIZONA 85721-0108

ADDRESS SERVICE REQUESTED

PERMIT NO. 190