October, 2014 Fall Issue Arizona’s Economy Economic and business research center A Long and Winding Road: The Arizona 30-Year Outlook By George W. Hammond, Ph.D., EBR Director and Research Professor A rizona’s economic growth slowed during the spring of 2014, with job growth falling back to the U.S. average. Nonetheless, the state economy continues to expand and growth is likely to continue as long as the nation avoids recession. Indeed, the forecast calls for Arizona’s growth to pick up speed during the 2015-2017 period, with gains across most indicators far exceeding national results. The near-term acceleration is eventually replaced by long-term deceleration, as the aging of the baby boom generation weighs down gains. Again, it is important to keep in mind that Arizona is likely to continue to outpace the nation. The long-term projections call for the state’s population to rise by 3.9 million during the next 30 years, accompanied by an additional 1.8 million jobs. September 1, 2014 Arizona Recent Developments in the state and local sector (particularly in education), as well as fewer federal employees. Arizona’s year-over-year job growth softened in the spring of 2014, falling from 2.4% in the first quarter to 1.9% in the second. Statewide job growth in the second quarter fell back to the national rate, something we have not seen since early 2012 (Exhibit 1). The recent weakness in construction job growth is a continuation of a trend that emerged during the second half of 2013 and reflects slowing growth in residential construction activity. Housing permits in Arizona increased by 57.5% between the second half of 2011 and the second half of 2012. However, by the second half of 2013 that growth rate had dropped to -2.5%. This was driven by a decline in multi-family permits, although singlefamily permit growth slowed as well. The slowdown in the second quarter was driven by slower over-the-year job gains across most of the service-providing sectors combined with a sharp drop in government jobs and a modest decline in construction employment. The decline in government jobs reflected a large drop There is some hopeful news in the housing permit data in the first half of 2014, Exhibit 1: Arizona’s Job Growth Decelerated in the Spring Over-the-Year Job Growth percent 3 2 1 0 -1 U.S. Arizona -2 -3 -4 -5 10 11 12 13 14 -6 In this issue A Long and Winding Road: The Arizona 30-Year Outlook. . . . . 1 The Changing Face of Agriculture in Arizona . . . . . . . . . . . . . . . 5 MAP: Making Action Possible for Southern Arizona. . . . . . . . . . 9 2014 Annual Economic Outlook Luncheon Coming Soon.. . . . . 9 Real-time Economic Data for Arizona in a New UA App!. . . . . 10 Forecast Tables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arizona Economic Indicators: AZ and US. . . . . . . . . . . . . . . . . . Arizona Economic Indicators: Metro Areas . . . . . . . . . . . . . . . . Arizona Economic Indicators: Counties . . . . . . . . . . . . . . . . . . . 11 12 14 16 Arizona’s Economy Exhibit 2: Arizona Long-Run Forecast Summary 2004 2014 2024 2034 2044 Population (000s) 5,726 6,669 7,975 9,254 10,515 Nonfarm Jobs (000s) 2,385 2,570 3,302 3,871 4,382 171 254 446 738 1,210 66 89 138 207 313 Personal Income ($Bil) Retail Sales ($Bil) Personal income increases in the next 30 years reflecting a rising standard of living. with a rebound in the volatile multi-family sector. This primarily reflects increased activity in the Phoenix MSA. In contrast, single family permits have continued to weaken statewide. Overall, the recovery in housing permit activity during the first half of 2014 suggests that related construction employment should recover modestly as building activity begins on permitted projects. Arizona Outlook in the Long Run The long-run forecast, which extends to 2044, calls for the state to add jobs and residents at a faster pace than the nation. As Exhibit 2 shows, Arizona’s population is forecast to rise by 3.9 million during the next 30 years, to 10.5 million residents. That translates into an increase of 57.7% during the 30-year period. Similarly, state jobs rise by 1.8 million, reaching 4.4 million in 2044. Personal income also increases during the next 30 years, reflecting both the impact of inflation and a rising standard of living. By 2044, nominal personal income is expected to exceed $1.2 trillion dollars. Rising income translates into rising retail sales, which reach $313 billion by the end of the forecast period. Exhibit 3 shows the outlook for job growth in Arizona, compared to the nation. As the exhibit shows, Arizona’s job growth accelerates in the near term. However, after peaking in 2017, job growth gradually decelerates during the remaining years of the forecast. This reflects the aging of the baby-boom generation, which will reduce growth across a range of indicators in coming years. Indeed, the forecast calls for job growth to average 1.8% per year from 2014-2044, which is less than half the state’s average growth rate during the 30 years before the Great Recession (4.1% per Exhibit 3: Arizona Outpaces U.S. Job Growth in the Long Run Arizona and U.S. Job Growth Rates percent 8 6 4 Arizona 2 0 U.S. -2 -4 -6 90 2 95 00 05 10 15 20 25 30 Economic and Business Research Center, Eller College of Management, The University of Arizona 35 40 -8 October, 2014 Fall Issue Exhibit 4: Improved Net Migration Boosts Arizona’s Population Growth Net Migration and Natural Increase persons 160,000 120,000 Net Migration 80,000 Natural Increase 40,000 0 00 05 10 15 20 year). Nonetheless, Arizona’s job growth is expected to outpace the national average by a substantial margin. Steady job gains will contribute to personal income growth by generating gains in wages and fringe benefits. The state’s income growth will also receive a boost from increased asset income (dividends, interest, and rent) as well as transfer payments. The forecast calls for transfer payments, which include Social Security, Medicare, Medicaid, and other welfare transfers, to account for 30.9% of personal income by 2044, up from 20.4% in 20.3% in 2014. The forecast calls for Arizona’s population to rise at an average rate of 1.5% per year during the next 30 years. Growth is stronger in the near term, as accelerating net migration and a modest improvement in natural increase (births minus deaths) 25 30 35 40 -40,000 both contribute to growth (Exhibit 4). However, after 2018 net migration plateaus and natural increase loses steam, pulling Arizona’s population growth down with it. Declining natural increase reflects the coming demographic aging, which drags down births and boosts deaths. Even with slowing growth during the long-run, Arizona will continue to outpace national population growth. Arizona’s population growth accelerates in the near term. This reflects faster national growth and rising house prices, which boosts residential mobility across the U.S., and net migration into the state. Rising population growth drives up residential construction activity, with housing permits increasing to 55,000 by 2018, from the 28.000 range in 2014. (For more forecast data please turn to page 11.......) Arizona’s population growth accelerates. Faster national growth and rising house prices boost residential mobility across the U.S. and net migration into the state. Rising population growth drives up residential construction activity, with housing permits increasing to 55,000 by 2018. ebr.eller.arizona.edu 3 Arizona’s Economy The Changing Face of Agriculture in Arizona By Valorie H. Rice, Senior Business Information Specialist larger when compared to the nation. The average farm size in the U.S. in 2012 was 424 acres. Thus, when compared to the nation, farm size in Arizona is still relatively large, in fact, Arizona is 6th in terms of average farm size, behind only Wyoming, Montana, New Mexico, Nevada and South Dakota. The number of acres being farmed in Arizona has remained essentially unchanged but both the number of farmers and the number farms in Arizona grew by a startling 28% between 2007 and 2012. T he U.S. Department of Agriculture released the 2012 Census of Agriculture in May. Much like the economic census conducted by the Census Bureau, the U.S. Department of Agriculture (USDA) produces an agricultural census every five years (those ending in 2 or 7), allowing us a look at the demographics, economics, and production practices of our nation’s farms. The Census Bureau conducted the Census of Agriculture from 1840 to 1996 at which time the responsibility was transferred to the National Agricultural Statistics Service within the USDA. Highlights There were 33,613 farmers in Arizona operating 20,005 farms on 26.2 million acres in 2012. While the number of acres being farmed in Arizona has remained essentially unchanged during this time frame, both the number of farmers and the number farms in Arizona grew by a startling 28% between 2007 and 2012 while the total number of farmers in the U.S. actually declined by 3% and the number of farms decreased 4%. This interesting result is driven by the fact that average farm size in Arizona has been shrinking. The average farm in Arizona was 3,645 acres in 2002, and by 2012 this figure had declined by 64% to 1,312 acres. Farms and ranches in most western states are typically much 4 The demographics of farm ownership in Arizona also differ remarkably from national trends. Nearly 40% of farms in Arizona now have a principal operator who is female compared to 14% nationally. Also, the percentage of farms in Arizona headed by American Indian or Alaska Natives is vastly larger than the national figure - while only 2% of farms in the U.S. have a principal operator who is American Indian, this group comprises 56% of farm operators in Arizona. Apache County has the largest number of farms in the state with 5,591 farms, followed by Navajo (3,846), Maricopa (2,479), and Coconino (2,239). Taken together, the counties of Apache, Navajo and Coconino make up just over half of the number of farms in the state and consist primarily of small farms. Indeed, more than 90% of the farms in Coconino and Navajo counties are less than 50 acres. Statewide, the number of farms with 1 to 9 acres and 10 to 49 acres increased considerably between 2002 and 2012, growing 411% and 115%, respectively. The counties with the highest percentage of farms or ranches over 1,000 acres are Cochise and La Paz. Land in farms includes cropland, pasture, grazing, woodland and other (table 1). Economics: Production, Sales and Workforce Cattle, cotton and citrus have traditionally been important products for Arizona, making up three of the “Five C’s” of Arizona’s economy. They are still important, but now so are cantaloupe and cauliflower. The vegetables, melons, potatoes and Economic and Business Research Center, Eller College of Management, The University of Arizona October, 2014 Fall Issue sweet potatoes category of products rank highest in the state based on market value of agricultural products sold for 2012. Rounding out the top five products for the state: 2) milk from cows, 3) cattle and calves, 4) other crops and hay, and 5) nursery, greenhouse, floriculture, and sod. The top five commodities for the U.S. by market value are 1) grains, oilseeds, dry bean, and dry peas, 2) cattle and calves, 3) poultry and eggs, 4) milk from cows, and 5) fruits, tree nuts, and berries (table 2). The vegetables, Yuma ranks fourth out of all U.S. counties producing vegetable crops and second for lettuce crops when comparing both acreage and value of sales (table 3). melons, potatoes and sweet potatoes category Of the $3,732,113,000 in farm sales for Arizona in 2012, 56% is from crop sales and 44% from livestock. While the market value of products sold increased for the state as a whole by 15% between 2007 and 2012, the average per farm declined from $206,852 in 2007 to $186,559 in 2012. Once production expenses are factored in, the average net cash income per farm is $30,012 in Arizona, down from $37,344 in 2007. The county in Arizona with the highest total market value of agricultural products sold in the state is Maricopa followed closely by Yuma and Pinal. These three counties together comprise 78% of the $3,732,113,000 total value of agricultural products sold in the state. Milk from cows is the top commodity group for Maricopa by value of sales while for Pinal it is cattle and calves. Yuma County has the largest value of sales for vegetables as well as the most acreage in vegetable crops. In fact, of products rank highest in the state based on market value of agricultural products sold for 2012. Farm workers make up a miniscule percentage of all U.S. employment and are not counted in most employment reports. Farm labor comprises total hired farm workers, including paid family members. Employment data are broken out by the number of days worked. There were 2,736,417 hired farm workers in the U.S. in 2012, the majority of which were found in California, Washington, and Texas. Arizona Table 1: Arizona Farms by Size Arizona Total farms 1 to 9 acres 10 to 49 acres 20,005 11,911 4,082 50 to 179 180 to 499 500 to 999 acres acres acres 1,517 882 513 1,000 or more acres 1,100 chg from 2002 12711 9580 2182 403 218 66 262 % chg from 2002 174.3 411.0 114.8 36.2 32.8 14.8 31.3 Apache 5,591 3,531 1,257 372 196 55 180 Cochise 1,093 182 297 232 137 56 189 Coconino 2,239 1,803 257 72 22 16 69 Gila 195 73 55 33 8 7 19 Graham 412 162 91 57 37 24 41 Greenlee 159 22 62 30 21 17 7 La Paz Maricopa Mohave Navajo 125 17 27 35 10 11 25 2,479 1,495 601 147 94 66 76 335 130 68 35 22 30 50 3,846 3,094 416 124 81 42 89 Pima 855 431 248 66 30 26 54 Pinal 938 348 182 105 89 95 119 Santa Cruz 236 41 84 42 23 8 38 Yavapai 940 399 258 115 45 33 90 Yuma 562 183 179 52 67 27 54 ebr.eller.arizona.edu 5 Arizona’s Economy Table 2: Market Value of Agricultural Products Sold for Arizona, Ranked by Sales Item Total Sales Vegetables, melons, potatoes, and sweet potatoes Milk from cows 20,005 3,732,113 1,750 765,062 Rank by Sales Percent of Total Sales 100.0 1 20.5 104 762,957 2 20.4 Cattle and calves 3,364 700,307 3 18.8 Other crops and hay 1,287 425,203 4 11.4 453 315,548 5 8.5 Nursery, greenhouse, floriculture, and sod Grains, oilseeds, dry beans and dry peas 2,015 (D) 6 (D) Cotton and cottonseed 388 224,486 7 6.0 Fruits, tree nuts, and berries 966 (D) 8 (D) Poultry and eggs 922 (D) 9 (D) Hogs and pigs 354 (D) 10 (D) Horses, ponies, mules, burros, and donkeys 1,954 31,801 11 0.9 Sheep, goats, wool, mohair, and milk 4,250 11,276 12 0.3 Table 3: Arizona Farms by County - Acreage and Sales Number of Farms Total Acres Sales ($1,000) Arizona 20,005 26,249,195 3,732,114 Apache 5,591 5,597,672 24,194 Cochise 1,093 916,672 149,998 Coconino 2,239 5,815,557 25,812 Gila 195 1,189,016 3,752 Graham 412 1,251,228 170,885 Greenlee 159 52,358 9,737 La Paz 125 (D) 183,243 2,479 475,898 1,003,475 335 1,244,343 30,184 3,846 4,323,178 64,515 Pima 855 (D) 97,287 Pinal 938 1,174,727 927,737 Santa Cruz 236 214,930 14,658 Yavapai 940 824,506 41,628 Yuma 562 214,675 985,009 Maricopa Mohave Navajo 6 Sales ($1,000) Farms has 29,245 hired farm workers, 45% of which work fewer than 150 days in the year. Demographics: Who are the Farmers? The number of farmers declined by 3% nationally between 2007 and 2012, while in Arizona the number grew by 28% in the same time frame. This result is most likely driven by the rising number of smaller farms. Along with the rise in the number of farmers, the demographics of farm operators in Arizona differs from the nation as a whole. The average age of the principal operator on farms in Arizona is 61, three years older than the U.S. average of 58 and they have been in the farming business an average of 27 years compared to 25 years nationally. Aside from being more experienced, farmers in Arizona are more likely to be female and American Indian. Nearly 40% of farms in Arizona have a principal operator who was female compared to 14% nationally. The percentage of farms in Arizona headed by American Indian or Alaska Natives is vastly larger than the nation - while only Economic and Business Research Center, Eller College of Management, The University of Arizona October, 2014 Fall Issue In 2012, nearly report having no days of work off the farm for Arizona went from 43% in 2007 to 46% in 2012. Many times, farms do not produce enough income for households to depend solely on earnings from farm operation, so fewer farmers and ranchers having to work off the farm may speak to an increased ability on the part of operators to make a living at farming. 2% of farms in the U.S. have a principal operator who are American Indian, 56% of farms in Arizona have operators from this demographic. The number of Hispanics as principal operators of farms in Arizona is 4%, similar to the 3% found nationally (table 4). Arizona followed the same pattern as the nation where farming is now a primary occupation for the person chiefly responsible for the operation of a farm or ranch business. Interestingly, the number of farm operators listing farming as their primary occupation, meaning the number of primary operators who spend 50% or more of their work time farming or ranching, rose between 2007 and 2012 for both Arizona and the U.S. The percent of operators who 40% of Arizona’s farms had a female principal operator compared to 14% nationally, while 56% Trends and Practices had principle operators The 2012 Census of Agriculture examines many varied aspects of farming and ranching. Here are a few of the interesting trends and practices which emerged. The use of renewable energy producing systems in 2012 is up by 144% nationally compared to 2007. Arizona has 794 farms with who were American Indian compared to 2% nationally. Table 4: Arizona Farms by Operator Demographic Farms with female Total farm principal operations operators US Farms with male principal operators Percent female principal operators Percent Hispanic principal operators Percent American Indian principal operators Average years in farming business 2,109,303 288,264 1,821,039 13.7 3.2 1.8 25.0 Arizona 20,005 7,835 12,170 39.2 3.6 55.9 26.5 Apache 5,591 2,806 2,785 50.2 0.5 95.5 29.6 Cochise 1,093 251 842 23.0 9.9 0.8 20.4 Coconino 2,239 1,127 1,112 50.3 0.5 89.2 29.9 Gila 195 46 149 23.6 5.1 19.0 27.6 Graham 412 49 363 11.9 4.1 14.3 25.3 Greenlee 159 17 142 10.7 8.2 - 23.9 La Paz Maricopa 125 12 113 9.6 26.4 32.0 20.6 2,479 747 1,732 30.1 6.8 2.8 22.9 335 99 236 29.6 3.6 12.8 22.1 3,846 1,791 2,055 46.6 0.7 90.0 29.1 Mohave Navajo Pima 855 307 548 35.9 7.5 6.0 22.2 Pinal 938 208 730 22.2 8.6 6.7 21.5 Santa Cruz 236 58 178 24.6 14.4 0.4 18.7 Yavapai 940 262 678 27.9 2.2 1.7 22.3 Yuma 562 55 507 9.8 16.0 0.7 24.2 U.S. Arizona 58.3 61.1 Average age of principal operator: ebr.eller.arizona.edu 7 Arizona’s Economy The use of renewable energy producing systems in 2012 is up by 144% nationally compared to 2007. Arizona has 794 farms with renewable energy producing systems, 739 of which report having solar panels. renewable energy producing systems, 739 of which report having solar panels. Other renewable energy systems Arizona farmers report using are wind turbines (135), biodiesel (17), and other (38). When it comes to computer use by farmers and ranchers, Arizona is the least wired state. Only 45% of farms in the state have internet access compared to 70% nationwide. Alaska has the smallest number of farms but the highest percentage of internet access at 85%, a full 40 percentage points higher than Arizona. Of the Arizona farms which have internet, most use DSL or satellite services. In 2012, 6% of farms in Arizona sold products directly to individuals for human consumption, by means of farmers markets and pick-your-own sites and the like. Two percent marketed products directly to retailers. The number of farms producing and selling value-added products (such as fruit jams, cider, and wine) increased by 32% rising from 326 in 2007 to 429 in 2012. consumer in recent years. In 2012, Arizona had 75 farms producing commodities in accordance with the USDA’s National Organic Program; most of these farms are found in Pima and Maricopa counties. These farms had total organic product sales of $54,503,000 in 2012, accounting for almost 2% of total farm sales for the state. California is the state with the largest number of organic farms, with 3,008, out of the U.S. total of 14,326. The state with the highest percentage of total sales coming from certified or exempt organically produced commodities is New Hampshire, with 8%. California is seventh with 3% and Arizona is in ninth place. Organically grown commodities account for less than one percent of agricultural commodities nationally. Unfortunately, the methodology for reporting organic commodity production in 2012 is different than it was in 2007, and so the results are not directly comparable. This makes it difficult to estimate growth in this market since the 2007 Census of Agriculture. The availability of organic produce has become increasingly important to the Between 2007 and 2012, the number of farmers declined by 3% nationally while in Arizona the number grew by 28% as the number of smaller farms rose. The demographics of Arizona’s farm operators shows an average age of 61 compared to the national age of 58, with 27 years of experiece compared to the national average of 25. Forty percent of Arizona’s principle operators are women, and 56% are American Indian compared to the national average of 14% and 2% respectively. Arizona’s farmers are turning to renewalble energy and getting wired. Organic produce now accounts for over $54 million in sales. 8 Economic and Business Research Center, Eller College of Management, The University of Arizona October, 2014 Fall Issue MAP: Making Action Possible for Southern Arizona By Jennifer Pullen, Research Economist The MAP Dashboard, set to come online this December, aims to measurably improve Southern Arizona through data driven collective civic action and education. MAP provides users with indicators on our region’s progress, as well as access to the latest information and research. Specifically, MAP measures how Southern Arizona is performing across six key areas of interest: Economy, Education, Health & Social Well-Being, Infrastructure, Quality of Place, and Workforce & Demographics. Southern Arizona’s performance in these areas is then compared to trends in key cities and states across the Western region. MAP will measure progress and inspire action by putting reliable local and regional data at your fingertips, even more it is powered by the University of Arizona’s Economic and Business Research Center. 2014 Annual Economic Outlook Luncheon Friday, December 12, 2014 Save the date for the Annual Economic Outlook Luncheon at the Westin La Paloma in Tucson! Join us for lunch as EBRC Director George W. Hammond and Chase Chief Economist Anthony Chan serve up the latest forecast for Arizona and the nation for 2015 and beyond... Registration and details coming soon. ebr.eller.arizona.edu 9 Arizona’s Economy New University of Arizona App Real-time Economic Data for Arizona in a New UA App! Search on “Arizona’s Economy” in the iTunes App Store or Google Play and download the new Arizona’s Economy mobile app for your iphone, ipad, or android phone today. >>Keeping Current Arizona’s Economy is published quarterly by the Economic and Business Research Center in the Eller College of Management. For continuous updates of Arizona’s economic indicators, check out our website’s Indicators page: http://azeconomy.eller.arizona.edu/az_indicators/ There you can browse indicators by geography or topic and graph each series by clicking on the series title. If you wish to be notified each quarter when a new issue of Arizona’s Economy becomes available, please send an email to EBRPublications.eller.arizona.edu with your name and contact information. Please put “subscribe” in the header line. We do not share our mailing list. 10 Economic and Business Research Center, Eller College of Management, The University of Arizona October, 2014 Fall Issue Forecast Tables Arizona Personal Income ($ mil)   % Chg from Year Ago Retail Sales ($ mil)   % Chg from Year Ago Total Nonfarm Employment (000s)   % Chg from Year Ago Population, July 1st estimates   % Chg from Year Ago 2012 2013 2014 2015 2016 2017 237,513 244,004 253,833 266,487 281,910 301,327 3.6% 2.7% 4.0% 5.0% 5.8% 6.9% 81,339 85,918 88,954 92,418 96,986 102,230 4.7% 5.6% 3.5% 3.9% 4.9% 5.4% 2,463.4 2.1% 6,498,569.0 2,517.4 2.2% 6,581,054.0 2,569.7 2.1% 6,668,530.0 2,637.8 2.7% 6,770,467.0 2,726.0 3.3% 6,894,100.0 2,823.1 3.6% 7,032,308.0 0.9% 1.3% 1.3% 1.5% 1.8% 2.0% Residential Housing (units) 21,726 25,209 27,819 35,267 47,178 53,327   % Chg from Year Ago 67.0% 16.0% 10.4% 26.8% 33.8% 13.0% Phoenix-Mesa-Scottsdale MSA Personal Income ($mil)   % Chg from Year Ago Retail Sales ($mil)   % Chg from Year Ago Total Nonfarm Employment (000s)   % Chg from Year Ago Population (000s),July 1st estimates   % Chg from Year Ago 2012 2013 2014 2015 2016 2017 164,547 170,343 178,737 188,569 199,994 214,245 4.1% 3.5% 4.9% 5.5% 6.1% 7.1% 55,825 59,769 62,495 65,460 69,197 72,998 4.5% 7.1% 4.6% 4.7% 5.7% 5.5% 1,762.9 1,813.1 1,863.4 1,917.6 1,984.4 2,060.7 2.6% 2.8% 2.8% 2.9% 3.5% 3.8% 4,273.9 4,338.7 4,405.9 4,481.1 4,565.6 4,673.7 1.1% 1.5% 1.6% 1.7% 1.9% 2.4% Residential Permits (units) 15,967 18,737 21,806 28,531 39,739 42,829   % Chg from Year Ago 75.8% 17.3% 16.4% 30.8% 39.3% 7.8% Tucson MSA 2012 2013 2014 2015 2016 2017 Personal Income ($ mil) 36,059 36,626 37,867 39,469 41,549 44,115   % Chg from Year Ago 3.2% 1.6% 3.4% 4.2% 5.3% 6.2% 12,069 12,389 12,624 12,887 13,392 14,025   % Chg from Year Ago Retail Sales ($ mil) 5.2% 2.7% 1.9% 2.1% 3.9% 4.7% Total Nonfarm Employment (000s) 358.8 361.4 365.0 370.9 378.8 388.8   % Chg from Year Ago 1.5% 0.7% 1.0% 1.6% 2.1% 2.6% Population (000s), July 1st estimates 990.4 996.0 1,002.7 1,012.3 1,024.2 1,039.7   % Chg from Year Ago 0.4% 0.6% 0.7% 1.0% 1.2% 1.5% Residential Permits (units)   % Chg from Year Ago 2,841 3,491 3,362 4,027 5,214 5,768 26.7% 22.9% -3.7% 19.8% 29.5% 10.6% >>Need More? Do you need more detailed and comprehensive forecast data and analysis? Learn about the benefits of becoming a Forecasting Project sponsor. Forecasting Project sponsorship allows your company or organization to access an in-depth menu of economic forecasting and consulting services, as well as, quarterly forecast update meetings. Contact Marshall Vest at mvest@eller.arizona.edu or call 520.621.4075. The Forecasting Project is a community-sponsored research unit within the Economic and Business Research Center producing quarterly economic forecasts for Arizona and its metro areas. These forecasts are recognized as among the most accurate in the Western states. ebr.eller.arizona.edu 11 Arizona’s Economy Arizona Economic Indicators Arizona Summary - Monthly Civilian Labor Force (seas. adj.), BLS Unemployment Rate (seas. adj.), BLS Total Nonfarm Employment (000s, Seas. Adj.), BLS Private Government Average Hourly Earnings - Total Private, BLS Gross Taxable Sales ($, accrual)* New Residential Permits (units), Census C-40 Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 3,034,709 3,038,256 3,039,788 3,039,099 3,033,385 6.9 6.8 6.9 7.0 7.1 2,550 2,540 2,559 2,575 2,570 2,147.9 2,146.5 2,143.9 2,145.3 2,155.4 421.2 406.7 374.3 365.0 394.4 22.86 22.78 22.98 22.87 22.90 8,668,287,481 8,424,048,384 8,689,987,151 2,687 2,474 2,484 2,324 *This figure does not include food or gasoline sales. Previous to this issue, EBRC published “Aggregate Retail Sales,” a figure which did include EBRC’s estimate of food sales and added in gasoline sales. “Gross Taxable Sales” covers all categories included in Arizona’s “Transaction Privilege Tax.” Arizona Summary - Quarterly 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 Population*(seas. adj.), ADOA & EBR 6,550,122 6,570,743 6,592,820 6,616,005 6,637,695   % Chg from Year Ago 1.2% 1.2% 1.3% 1.3% 1.3% Natural Increase, ADHS & EBR 6,714 8,041 10,914 10,171 7,652 12.6 12.2 13.5 12.8 12.2 Resident Birth Rate (per 1,000), ADHS & EBR Net Migration, ADHS & EBR Total Personal Income ($ mil, SAAR), BEA & EBR   % Chg from Year Ago Per Capita Pers. Income ($, SAAR), BEA & EBR   % Chg from Year Ago Civilian Nonag Wage Rate ($, SAAR) 13,906 12,572 12,618 12,666 12,891 239,549 244,378 245,280 246,811 249,027 2.5% 3.1% 4.0% 1.3% 4.0% 36,572 37,192 37,204 37,305 37,517.10 1.4% 1.8% 2.7% 0.0% 2.6% 48,380 49,045 48,774 48,745 48,914.50   % Chg from Year Ago 1.0% 1.7% 1.8% -0.1% 1.1% Arizona All Transactions House Price Index, FHFA 263.7 275.8 285.2 294.1 301.2   % Chg from Year Ago 11.4% 15.0% 14.4% 14.3% 14.2% *Population numbers are based on ADOA annual estimates through July 2012 EBR then makes quarterly middle of quarter estimates and projections. **EBR uses BEA income estimates combined with population numbers from ADOA to calculate per capita personal income. Note: this differs from per capita personal income as calculated by BEA which uses Census population counts. SAAR: seasonally adjusted annual rate Inflation and Prices Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 236.25 237.08 237.69 237.91 237.43 U.S. Consumer Price Indices (seas. adj.), BLS All Urban Consumers: All Items   % Chg from Year Ago Western States - All Urban Consumers: All items   % Chg from Year Ago U.S. Producer Price Index: All Commodities (seas. adj.), BLS   % Chg from Year Ago 12 2.0% 2.1% 2.1% 2.0% 1.7% 239.81 241.35 241.62 241.85 241.66 1.8% 2.3% 2.3% 2.3% 2.1% 208.30 208.00 208.30 208.00 206.80 2.4% 1.9% 2.0% 1.8% 1.3% Economic and Business Research Center, Eller College of Management, The University of Arizona October, 2014 Fall Issue Arizona Economic Indicators - MSAs Phoenix-Mesa-Glendale MSA Summary - Monthly Civilian Labor Force, ADOA Unemployment Rate, ADOA Total Nonfarm Employment (000s), BLS Private Government Average Hourly Earnings, Total Private, $, BLS Gross Taxable Sales ($, accrual)* Apr 2014 May 2014 Jun 2014 2,061,391 2,065,225 2,072,333 Jul 2014 Aug 2014 2,076,841 6.1 6.0 6.0 6.0 1,852.7 1,839.7 1,819.8 1,810.5 1,844.5 1,612.8 1,612.3 1,612.8 1,611.4 1,621.2 239.9 227.4 207.0 199.1 223.3 23.73 23.70 23.76 23.61 23.59 6,143,644,660 6,138,183,577 6,116,822,168 Total New Residential Permits (units), Census C-40 2,090 1,860 1,627 1,744 *This figure does not include food or gasoline sales. Previous to this issue, EBRC published “Aggregate Retail Sales,” a figure which did include EBRC’s estimate of food sales and added in gasoline sales. “Gross Taxable Sales” covers all categories included in Arizona’s “Transaction Privilege Tax.” Phoenix-Mesa-Glendale MSA Summary - Annual Population, ADOA*   % Chg from Year Ago Total Personal Income ($000), BEA   % Chg from Year Ago Per Capita Personal Income ($)**   % Chg from Year Ago Consumer Price Index (Phx-Mesa-Glndle MSA) All Urban Consumers: All items, BLS   % Chg from Year Ago 2009 2010 2011 2012 2013 4,186,131 4,200,427 4,227,601 4,273,897 4,338,672 0.5% 0.3% 0.7% 1.1% 1.5% 147,270,150 148,944,337 158,053,527 164,546,658 -4.8% 1.1% 6.1% 4.1% 35,456 35,384 37,171 38,006 -5.9% -0.2% 5.1% 2.3% 117.57 -1.4% 118.23 0.6% 121.48 2.8% 124.20 2.2% 125.78 1.3% *Population counts as of July 1st of each year. ADOA population estimates differ from the official Census Bureau estimates. EBR considers the ADOA counts to be the most accurate. ** BEA per capita personal income is calculated using Census Bureau population counts. Tucson MSA (Pima County) Summary - Monthly Civilian Labor Force Unemployment Rate Total Nonfarm Employment (000s), BLS Private Government Average Hourly Earnings, Total Private, $, BLS Gross Taxable Sales ($, accrual)* Total New Residential Permits (units), Census C-40 Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 452,530 453,403 450,940 452,676 447,600 5.4 5.8 6.9 6.6 6.6 368.1 367.0 357.1 357.5 360.5 288.4 288.3 286.4 287.4 289.5 79.7 78.7 70.7 70.1 71.0 22.05 21.76 21.67 21.71 21.50 1,182,443,270 1,193,049,016 1,172,430,908 313 294 344 309 *This figure does not include food or gasoline sales. Previous to this issue, EBRC published “Aggregate Retail Sales,” a figure which did include EBRC’s estimate of food sales and added in gasoline sales. “Gross Taxable Sales” covers all categories included in Arizona’s “Transaction Privilege Tax.” Tucson MSA (Pima County) Summary - Annual Population, ADOA*   % Chg from Year Ago Total Personal Income ($000), BEA   % Chg from Year Ago Per Capita Personal Income ($), BEA**   % Chg from Year Ago 2009 2010 2011 2012 2013 984,274 981,168 986,081 990,380 996,046 0.6% 0.0% -0.3% 0.5% 0.4% 33,573,864 33,766,590 34,931,620 36,058,871 -4.8% 0.6% 3.5% 3.2% 34,414 34,389 35,371 36,335 -5.5% -0.1% 2.9% 2.7% *Population counts as of July 1st of each year. ADOA population estimates differ from the official Census Bureau estimates. EBR considers the ADOA counts to be the most accurate. ** BEA per capita personal income is calculated using Census Bureau population counts. ebr.eller.arizona.edu 13 Arizona’s Economy Arizona Economic Indicators - MSAs Flagstaff MSA (Coconino County) Summary Monthly Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment (000s), ADOA Private Government Average Hourly Earnings, Total Private, $, BLS Gross Taxable Sales ($, accrual) Total New Residential Permits (units), Census C-40 Flagstaff MSA (Coconino County) Summary - Annual Population, ADOA*   % Chg from Year Ago Total Personal Income ($000), BEA   % Chg from Year Ago Per Capita Personal Income ($), BEA**   % Chg from Year Ago Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 71,030 70,651 73,035 73,086 71,828 6.2 6.5 7.6 7.5 7.1 63.6 63.0 63.6 63.4 63.8 43.5 44.2 44.9 45.1 45.1 20.1 18.8 18.7 18.3 18.7 16.34 16.10 15.90 16.57 17.23 208,121,048 226,976,122 252,030,268 22 19 255 63 2009 2010 2011 2012 2013 133,626 134,679 134,162 134,313 135,695 0.6% 0.8% -0.4% 0.1% 1.0% 4,514,396 4,523,918 4,617,232 4,735,934 -1.7% 0.2% 2.1% 2.6% 33,822 33,607 34,430 34,820 -2.84% -0.6% 2.5% 1.1% *Population counts as of July 1st of each year. ADOA population estimates differ from the official Census Bureau estimates. EBR considers the ADOA counts to be the most accurate. ** BEA per capita personal income is calculated using Census Bureau population counts. Lake Havasu City - Kingman MSA (Mohave County) Summary - Monthly Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment, (000s), BLS Private Government Average Hourly Earnings, Total Private, $, BLS Gross Taxable Sales ($, accrual) Total New Residential Permits (units), Census C-40 Lake Havasu City-Kingman MSA (Mohave County) Population, ADOA*   % Chg from Year Ago Total Personal Income ($000)   % Chg from Year Ago Per Capita Personal Income ($)** Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 83,459 83,906 85,042 85,270 84,170 7.6 7.6 8.6 8.3 8.2 45.4 45.5 45.3 45.7 46.0 37.7 37.6 37.3 37.2 37.4 8.2 8.2 7.9 8.1 8.5 19.74 19.62 19.09 19.62 19.66 213,389,121 219,447,916 212,662,027 32 59 41 55 2009 2010 2011 2012 2013 200,235 200,099 200,417 203,072 203,592 0.26%   0.09%   -0.07%   0.16%   1.32%   5,135,030 5,210,338 5,373,492 5,534,671 -3.08%   1.47%   3.13%   3%   25,714 26,002 26,524 27,220   % Chg from Year Ago -2.89%   1.12%   2.01%   2.62%   Average Wage per Job ($) 32,700 33,605 34,334 35,501   % Chg from Year Ago -1.55%   2.77%   2.17%   3.4%   *Population counts as of July 1st of each year. ADOA population estimates differ from the official Census Bureau estimates. EBR considers the ADOA counts to be the most accurate. ** BEA per capita personal income is calculated using Census Bureau population counts. 14 Economic and Business Research Center, Eller College of Management, The University of Arizona October, 2014 Fall Issue Arizona Economic Indicators - MSAs Prescott MSA (Yavapai County) Summary Monthly Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment (000s), ADOA Private Government Average Hourly Earnings, Total Private, $, BLS Gross Taxable Sales ($, accrual) Total New Residential Permits (units), Census C-40 Prescott MSA (Yavapai County) Summary - Annual Population, ADOA*   % Chg from Year Ago Total Personal Income ($000), BEA   % Chg from Year Ago Per Capita Personal Income ($)**   % Chg from Year Ago Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 91,700 91,289 91,611 91,468 91,332 5.9 6.0 7.1 6.8 6.7 58.5 58.1 57.1 56.7 57.9 47.5 47.5 47.1 47.0 47.3 11.0 10.6 10.0 9.7 10.6 18.32 17.68 17.86 17.92 17.46 264,895,137 271,532,066 277,988,493 74 70 78 62 2009 2010 2011 2012 2013 211,917 210,899 211,247 211,583 213,294 -0.3% -0.5% 0.2% 0.2% 0.8% 6,247,299 6,223,793 6,448,529 6,722,907 -5.0% -0.4% 3.6% 4.3% 29,584 29,602 30,543 31,617 -5.0% 0.1% 3.2% 3.5% *Population counts as of July 1st of each year. ADOA population estimates differ from the official Census Bureau estimates. EBR considers the ADOA counts to be the most accurate. ** BEA per capita personal income is calculated using Census Bureau population counts. Yuma MSA (Yuma County) Summary - Monthly Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 85,217 87,960 87,674 89,005 87,847 24.0 26.6 27.0 29.3 28.0 51.8 51.0 49.4 48.3 49.4 Private 36.6 36.0 35.1 34.8 34.9 Government 15.2 15.0 14.3 13.5 14.5 20.88 20.72 Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment (000s), BLS Average Hourly Earnings, Total Private, $, BLS Gross Taxable Sales ($, accrual), ADOR New Residential Permits (units), Census C-40 Yuma MSA (Yuma County) Summary - Annual Population, ADOA*   % Chg from Year Ago Total Personal Income ($000)   % Chg from Year Ago Per Capita Personal Income ($)**   % Chg from Year Ago 20.91 20.73 21.27 190,424,699 183,957,685 162,280,513 55 60 45 43 2009 2010 2011 2012 2013 194,737 196,160 200,431 205,174 209,323 2.0% 0.5% 0.7% 2.2% 2.4% 5,143,493 5,272,263 5,487,179 5,399,670 2.6% 2.5% 4.1% -1.6% 26,552 26,792 27,385 26,995 1.3% 0.9% 2.2% -1.4% *Population counts as of July 1st of each year. ADOA population estimates differ from the official Census Bureau estimates. EBR considers the ADOA counts to be the most accurate. ** BEA per capita personal income is calculated using Census Bureau population counts. ebr.eller.arizona.edu 15 Arizona’s Economy Arizona Economic Indicators - Counties Apache County Summary - Monthly Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment (000s), ADOA Total Private Government Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 19,919 20,321 20,863 20,750 20,410 15.9 16.1 17.8 17.7 16.5 18,025 18,350 18,250 18,125 18,425 7,450 7,575 7,700 7,750 7,850 10,375 10,575 10,575 10,775 10,550 Gross Taxable Sales ($ accrual), ADOR 19,701,897 23,156,176 26,808,626 Cochise County (Sierra Vista - Douglas Micropolitan SA) Summary - Monthly Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 54,324 7.5 34,300 54,491 7.9 34,225 54,771 8.9 33,625 54,463 8.7 33,275 54,227 8.3 33,925 22,400 22,325 22,175 22,175 22,275 11,100 11,650 Total Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment, ADOA Total Private Government 11,900 11,900 11,450 147,787,012 149,443,477 154,258,769 New Residential Permits (units), Census C-40 17 8 12 4 Gila County (Payson Micropolitan SA) Summary - Monthly Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 21,592 21,827 22,264 22,499 22,127 7.5 7.7 8.6 8.3 8.2 14,400 14,575 14,600 14,675 14,700 9,225 9,275 9,450 9,475 9,425 5,200 5,275 Gross Taxable Sales ($ accrual), ADOR Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment, ADOA Private Government Gross Taxable Sales ($ accrual), ADOR New Residential Permits (units), Census C-40 Graham County Summary - Monthly Total Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment, ADOA 5,175 5,300 5,150 50,889,970 56,151,501 52,973,022 6 8 5 2 Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 16,348 16,366 16,430 16,453 16,265 5.6 6.2 7.5 7.7 7.8 8,800 8,700 8,525 8,400 8,625 Total Private 5,800 5,775 5,800 5,750 5,775 Government 3,000 2,925 2,725 2,650 2,850 Gross Taxable Sales ($ accrual), ADOR 31,373,060 31,731,145 27,983,434 Greenlee County Summary - Monthly Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 4,864 4,874 4,876 4,878 4,800 5.3 6.0 7.1 7.2 6.8 6,425 6,400 6,200 6,225 6,075 5,850 5,850 5,750 5,750 5,525 475 550 Total Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment, ADOA Total Private Government Gross Taxable Sales ($ accrual), ADOR 16 575 550 450 37,777,407 40,314,743 46,773,870 Economic and Business Research Center, Eller College of Management, The University of Arizona October, 2014 Fall Issue Arizona Economic Indicators - Counties La Paz County Summary - Monthly Total Civilian Labor Force, ADOA Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 4,864 4,874 4,876 4,878 4,800 5.3 6.0 7.1 7.2 6.8 6,425 6,400 6,200 6,225 6,075 5,850 5,850 5,750 5,750 5,525 475 550 Unemployment Rate Total Nonfarm Employment, ADOA Total Private 575 550 450 Gross Taxable Sales ($ accrual), ADOR Government 37,777,407 40,314,743 46,773,870 Navajo County (Show Low Micropolitan SA) Summary - Monthly Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 37,043 11.8 27,325 37,634 11.9 27,650 38,190 13.1 27,275 37,670 13.3 26,725 37,653 12.2 27,550 17,550 17,775 17,950 17,875 17,950 8,850 9,600 Total Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment, ADOA Total Private Government Gross Taxable Sales ($ accrual), ADOR 9,775 9,875 9,325 110,854,266 126,228,236 132,703,040 0 0 1 0 Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 17,201 17,154 17,328 17,065 16,800 New Residential Permits (units), Census C-40 Santa Cruz County Summary - Monthly Total Civilian Labor Force, ADOA Unemployment Rate Total Nonfarm Employment, ADOA 13.1 13.3 15.2 17.5 17.5 13,275 13,225 12,900 12,200 12,200 Private 9,350 9,275 9,075 8,500 8,325 Government 3,925 3,950 3,825 3,700 3,875 48,081,247 44,909,275 34,837,499 1 0 5 Gross Taxable Sales ($ accrual), ADOR New Residential Permits (units), Census C-40 3 TABLES: SOURCES AND ABBREVIATIONS EBR: The Economic and Business Research Center, The University ADHS: Arizona Department of Health Services of Arizona. ADOA: Arizona Department of Administration, Office of Employment and Population Statistics MSA: Metropolitan Statistical Area must have at least one core urbanized area of 50,000 or more inhabitants. ADOR: Arizona Department of Revenue PSHIA: Phoenix Sky Harbor International Airport ADOT: Arizona Department of Transportation SAAR: Seasonally adjusted at annual rates ARMLS: Arizona Regional Multiple Listing Service TAR: Tucson Association of Realtors ASPB: Arizona State Parks Board U.S. Bankruptcy Court: District of Arizona BEA: Bureau of Economic Analysis, U.S. Department of Commerce USCBP: U.S. Customs and Border Protection, U.S. Department BLS: Bureau of Labor Statistics, U.S. Department of Labor of Homeland Security Census C-40: U.S. Census Bureau, U.S. Department of Commerce Micropolitan SA: Micropolitan Statistical Area must have at least one urban cluster of at least 10,000, but less than 50,000 inhabitants. * All Aggregate Retail Sales figures reported by EBR include retail, food, restaurant & bars and gasoline sales. Source: Economic and Business Research Center, Eller College of Management, The University of Arizona. ebr.eller.arizona.edu 17 October, 2014 Fall Issue Arizona’s Economy Economic and business research center McClelland Hall, Room 103 P.O. Box 210108 1130 E. Helen Street Tucson, AZ, 85721-0108 George W. Hammond, Ph. D. Director (520) 626-1679 ghammond@eller.arizona.edu Alberta Charney, Ph.D. Senior Research Economist (520) 621-2291 acharney@eller.arizona.edu Alan Hoogasian Research Economist (520) 626-6439 ahoogasi@eller.arizona.edu Daniel Kinnear Specialist, Business Research (520) 626-1673 dkinnear@eller.arizona.edu Pia Montoya Database Specialist (520) 621-2523 pmontoya@eller.arizona.edu Maile L. Nadelhoffer Research Economist & Webmaster (520) 621-4050 mln@eller.arizona.edu Vera Pavlakovich-Kochi, Ph.D. Senior Regional Scientist & Associate Professor of Geography (520) 626-0520 vkp@eller.arizona.edu Heather Peterson Technical Consultant (520) 621-4050 thpeterson@comcast.net Jennifer Pullen Research Economist (520) 626-4795 jkanipe@email.arizona.edu Valorie Rice Senior Specialist, Business Information (520) 621-2109 vrice@eller.arizona.edu Phone: 520-621-2155 Fax: 520-621-2150 E-mail: ebrpublications@eller.arizona.edu To subscribe to Arizona’s Economy or other Economic and Business Research Publications, visit: ebr.eller.arizona.edu/subscribe/ Arizona’s Economy, published quarterly by the Economic and Business Research Center at the Eller College of Management, is provided as an educational service by The University of Arizona. Correspondence should be addressed to EBR Publications, McClelland Hall Room 103, PO Box 210108, Tucson, Arizona 85721-0108. Arizona’s Economy is available online at: azeconomy.eller.arizona.edu As part of The University of Arizona’s public mission to improve quality of life for the people of Arizona and the nation, the Economic and Business Research Center is dedicated to providing Arizona citizens and decision makers with high quality economic data and objective forecasts and analyses. Copyright 2014 by The University of Arizona. Information contained in this publication may be copied or reprinted with credit to the Eller College of Management at The University of Arizona. >> Visit us online at ebr.eller.arizona.edu! Thank you to our community sponsors for their ongoing support of Economic and Business Research Center programs. Arizona Department of Transportation Cox Communications Arizona Joint Legislative Budget Committee Elliott D. Pollack and Company Arizona Public Service Company JPMorgan Chase & Co. 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