Economist: State’s economic growth slow but steady, leans on job creation

Arizona is in an “overall positive” position economically moving into 2016, according to economic consultant Elliott Pollack.

Pollack presented his annual outlook at the Pinal Partnership breakfast Friday at Rawhide in Chandler.

He said recovery from the recession continues to be steady but slow, much like his 2015 outlook but a little better. He called Arizona’s recovery so far “significant.”

“It is only when we compare ourselves to previous Arizona recoveries that we look so bad,” Pollack said.

The room was full of business and government leaders from Pinal County wanting to hear the best forecast for the state and particularly the county.

According to economic studies, five years after recessions in the 1970s and ‘80s, the Phoenix area showed at least 40 percent employment growth. Five years after a recession in the ‘90s, job growth was 32 percent. Five years after the post-9/11 recession, job growth was 20 percent.

Five years after the bottom of the most recent recession, that number is at 13.9 percent.

With a recent unemployment report showing Arizona still lacks  more than 7 percent of the jobs lost to the recession, Pollack said it might be 2023 before economic growth returns to normal. The state’s population numbers will also be slow to recover, he predicted.

New norms are ruling the day for now.

Arizona’s job growth, which pre-recession was annually in the top 10 in the country, dropped to the bottom five three years in a row before climbing into the top 20. He said the disappearance of construction jobs accounted for 70 percent of the slowdown, and that industry remains tepid.

Construction businesses that are succeeding are having trouble finding skilled labor, Pollack said. Paying more to secure a skilled workforce will add to construction costs.

Jobs in general are dictating economic recovery.

The number of people moving to Arizona remains well off the pace of the state’s peak growth years. Those who are moving here are moving for jobs more than for retirement, Pollack said.

When Supervisor Anthony Smith asked about the growth prospects for Pinal County, Pollack said bringing in more jobs is the key to any real growth in the local economy.

“If you think it’s slow here, you should be in Europe and see what’s going on,” Pollack said.

American goods are more expensive overseas while imports are cheaper. He said that is an indication of the rising value of U.S.-made products. It also makes it a good time to indulge in foreign goods and foreign travel.

Manufacturers have accumulated excess inventory, mainly in the auto industry. Pollack said that makes this the perfect time to buy a car.

Pinal Partnership breakfast

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