By George W. Hammond, Ph.D. | Real Estate Daily News
The University of Arizona’s Economic & Business Research Center (EBRC) is reporting in its economic scorecard for 2015 shows the state of the economy added jobs, residents, and income. Labor market performance improved, with 61,600 net new jobs and an unemployment rate of 6.1% according to the preliminary data. Arizona also added just over 91,000 new residents last year, with positive net migration. Personal income is expected to rise by 4.9%, slightly faster than in 2014. The Phoenix metropolitan statistical area (MSA) continued to drive state growth, but the Tucson MSA managed to grind out slow gains. Overall, 2015 was a solid but not great year.
Look for modest improvements in job, population, and income growth in 2016, but keep an eye on national/global growth risks as well. Recent stock market declines, if sustained, may weigh a bit on consumer spending, particularly for luxury goods. Low oil and gasoline prices are a net positive for Arizona, but they are having an adverse impact on oil producing states, for instance Texas and Mexico. The major increases in the value of the U.S. dollar during the past year and a half will impact U.S. exporters of goods and services, including exporters in Arizona. Further, possible monetary policy mistakes remain a concern as we look to the future, as does growth of our major trading partners.
Arizona also faces risks related to U.S. residential mobility, which has been slow to recover from the Great Recession. If mobility does not increase as expected, it will dampen state population gains and the housing recovery.