Economy will sag for 3-5 more years, Pinal leaders told

The growth engine that has spurred Arizona’s – and Pinal County’s – economy for so long won’t regain its momentum for some time, according to a respected economist, Elliott Pollack.

And local governments ought to use this “hiatus” to improve transportation corridors throughout Pinal County, he said. Without an infrastructure conducive to “connectivity,” Pollack said, “nothing works.”

Pollack, founder of a real estate and economic consulting firm bearing his name, referred to facing bumper-to-bumper traffic to allow him to make it in time to Maricopa for a breakfast meeting beginning at 7:30 a.m. Main routes throughout Pinal County, he said, are “choked to death.”

Pollack was the main speaker at the monthly meeting of Pinal Partnership, held in the ballroom Friday at Harrah’s Ak-Chin Casino and Resort.

Using a Power Point presentation labeled “Crunch,” available on his Web site, Pollack also cited a lot of pluses that make Pinal County and Maricopa attractive to future development.

“First of all,” he said, “I’m one of the few who don’t give much credence to the popular belief that the Phoenix-Tucson corridor will soon give birth to one giant metropolitan region. It won’t happen in our lifetimes.”

He said he believes what will happen is a “bulge” or arc of growth will move southward from Phoenix, starting at Buckeye and points further north, and swinging like a pendulum to Marcicopa, Casa Grande and as far east as Queen Creek. “That’s where growth is going first, not along I-10,” he said.

After an introduction by attorney Jordan Rose, who asked that he “not depress us too much,” Pollack took the audience through his presentation, chock full of impressive statistics and charts, but also interlaced with some comedy relief.

Bottom line?

He said he thinks that 2008 in the Phoenix metro area will be a “sub-prime” period, demonstrating some growth, albeit at a slower rate than has been the case.

He forecasts a population increase for the area of 2.7 percent, as opposed to 3.2 percent for 2007, a 2 percent growth in employment next year, versus 3.5 percent this year, a 5.5 percent increase in personal income in 2008, as against 7 percent this year, and a retail sale growth next year of only 1.5 percent. Retail sales grew at the rate of 2.5 percent this year, he said.

Pollack said communities like Maricopa should experience a weak housing market for the foreseeable future and continued downward pressure on prices, though the long-term economic outlook is favorable.

“Full recovery,” Pollack said, is when excess supply of housing is absorbed and supply and demand are back to normal, “not when we hit 60,000 permits.”

Demographic forecasts for the Greater Phoenix area, Pollack claims, call for 40,000 single-family living units each year. He pointed out, however, that the exodus to Arizona from other states slows when people can’t get the price they want for homes they’re leaving.