Tags Articles tagged with "Economy"

Economy

Economist Elliott Pollack says 2019 will be a good year.

Economist Elliott Pollack is bullish on 2019.

“Enjoy yourself,” he said. “It’s going to be great year.”

The CEO of Elliott D. Pollack and Company presented his annual economic forecast to Pinal Partnership at Rawhide Friday morning.

A recession is anticipated, but Pollack said it would not happen in 2019 though it is possible later.

“Not all recessions are the same,” he said. “What you’re looking at is short and shallow.”

With home prices now back above recession levels, Arizona real estate has fully recovered, Pollack said.

Taking nearly a decade, the recovery was old but strong, he said. Consumer confidence is high, and labor is coming back. The greater Phoenix area is responsible for 88 percent of the state’s job growth.

Lack of labor is a concern nationwide, however. Pollack said there are 7 million unfilled jobs in the nation. That means companies will have to pay higher wages to fill those jobs, causing the employment-cost index to rise, which leads to higher prices.

The stock market has been a roller-coaster ride this year. Pollack said though bear markets are reason to be concerned, “the stock market is a bad predictor of recession.”

In attendance, Maricopa City Councilmember Marvin Brown said he was concerned about the national debt, which is now at $21.9 trillion. It is a problem of many nations.

“The U.S. is the prettiest house on a very ugly block,” Pollack agreed. “Ultimately some generation is going to pay for all this debt, but it’s not your generation.”

With representatives of Central Arizona Project and Global Water in the room, he also pushed back on the notion that Arizona will soon face a water shortage. He said farmers and ranchers continue to turn their homes over to development, which uses less water than agriculture.

“Water flows toward money, and money is in industry and housing,” he said. “There will not be a water shortage in the greater Phoenix area in my lifetime or the lifetime of anyone in this room.”

Pollack also said the media is making more out of a trade war than it deserves. He called it a trade skirmish that “would have a minor impact on the U.S. economy.” Further, he said, China cannot win a trade war because 20 percent of its gross domestic product comes from exports while in the United States it is less than 10 percent.

Real estate in the Valley and Pinal County is in a good situation. New home inventory is low with no signs of an oversupply of homes. Builders are battling supply-side constraints, meaning production is unable to keep pace with demand.

Pollack predicted the entire demand for new housing will be from the millennial generation. “There’s going to be a lot more of them, and a lot more of them will be buying houses.”

The impact of the Great Recession on millennials is still playing out. That generation saw greater acceptance of large amounts of student debt, delayed marriage, often moved back into the parental home to save money and became less materialistic than their parents’ generation.

A new report by Bank of America found millennials now prioritize home-ownership over marriage and starting a family. No. 1 on their list of priorities is being able to retire.

While many millennials still believe outmoded information about homeownership, probably passed down to them by their parents, their buying behavior will dictate the future economy.

Pollack told real estate agents to expect millennial homebuying to “skyrocket over the next five years.”

by -
Economist Elliott Pollack is bullish on the local economy for 2017.

Arizona economist Elliott Pollack presented his annual forecast for the 10th year for Pinal Partnership at its Dec. 9 breakfast meeting at Rawhide. His predictions include:

■ 2017 will see exciting economic growth.

■ Donald Trump’s tax plan will not pass.

■ Expect faster growth and higher interest rates.

■ Expect higher inflation and higher after-tax profits.

■ A mild recession is likely in the next four years.

■ Pinal County is seeing the growth it needs with pending Lucid Motors, Attessa Motorsports and PhoenixMart.

■ Expect more announcements of businesses moving to Arizona.

■ International trade is one of the biggest issues facing the United States in 2017. “The last thing we need is a trade war.”

■ Arizona needs to closely watch its important trade with Mexico under the new president.

■ Up to 80 percent of existing businesses will comprise most of the job growth in Arizona.

■ Student debt is the top reason people under 35 don’t buy a home.

■ Baby boomers are prepared to sell their homes and live off equity, creating a large market for apartments.

■ 60.5 percent of American adults own their homes.

■ The largest group of homeowners is between 65 and 84 years old.


This article appears in the January issue of InMaricopa.

Estrella Gin ‘most exciting project’

The Estrella Gin Business Park needs to be 60 percent leased for the developer to break ground. Photo by Raquel Hendrickson

By Yvonne Gonzalez

Maricopa is headed toward a year of growth, with unemployment down and consumer spending up.

Economic Development Director Denyse Airheart said Maricopa, like the rest of the state, is growing continually.

“If you’re looking at the economic factors across the state, you’re noticing that there is no one city that is booming, but every city is growing at a steady pace,” she said.

The city just participated in the mid-decennial census, and Airheart said officials are hoping the data shows a population that gets Maricopa very close to the 50,000 mark. That would do quite a few things for the city, she said, like showing growth and bringing additional revenue.

Pinal County Economic Development Director Tim Kanavel said the county’s economy will pick up in 2016, a continuation of the current trend he’s seeing.

The unemployment rate is 6 percent, down from a record-high 13.2 percent in 2009.

He said the county is working to keep job creation at pace with workforce growth, but it’s falling slowly behind.

“We gain 8,000, 9,000 people a year that we can count,” he said.

The workforce of 128,000 in 2009 has grown to 156,000 people.

“That is tremendous growth,” he said. “Even though we are gaining all these new people, our unemployment rate keeps going down. We’re doing a pretty good job of job creation in this county.”

Kanavel said Maricopa is among the communities he expects to play a large role in Pinal’s growth.

“They wanted to be simply a bedroom community, but that’s changed within the last few years,” he said. “They’re beginning a lot of economic development that they probably wouldn’t have before.”

Airheart said Economic Development is “truly pursuing those high-wage jobs” that will allow people to live and play in the city.

“While retail is aggressively growing in Maricopa, that’s not necessarily the stuff that we are actively pursuing,” she said. “We’re really pursuing industry that will be able to provide salary wages.”

Retail growth is tied to attracting employers that add high-wage jobs in the city, she said.

“People move for quality of life, and that’s a big, big deal,” she said. “Overall, while it’s not our main focus today, it truly is a complement for the overall economic development of the entire city.”

Salt Lake City-based Boyer Group is recruiting businesses to move into space in the Estrella Gin Business Park, which needs to be 60 percent leased for the developer to break ground.

Airheart said the park would be a place for industries looking to enter Maricopa as well as home-based businesses looking for more space to boost growth.

“Because of our workforce, because of our location, this is going to be the most exciting project I think in 2016,” she said.

A timeline from the project is made uncertain, Airheart said, with tenants needed before construction can start.

“It all just depends on the businesses that sign a lease,” she said.

She said Maricopa is working on a new five-year strategic plan intended to be in place for 2016.

The city’s current strategic plan defined goals and industry clusters to focus on.

“The new strategic plan is going to be economic development 2.0,” she said. “So we have the foundation laid down.”

With the next strategic plan, the city is asking what else can be done.

“It’s really going to outline our success for the next five years,” she said.

Chipotle’s opening last summer signifies growth in the fast-casual concept, according to Airheart.

“For Chipotle to enter the market, it just says that the time is right for Maricopa,” she said. “Now we have other high-end restaurants, while they might still be fast-casual, looking at Maricopa.”

In mid-December, Maricopa Planning & Zoning commissioners gave the go-ahead to a development review permit for the proposed Edison Pointe retail shopping center. Airheart said the project will bring 130,000 more square feet of retail space.

“Retail across the state is doing well,” she said. “Consumer spending is up, and we’re able to see that in Maricopa.”

Airheart said it’s extremely exciting working with a city council that is pro-business and knowledgeable about the community and its needs. Officials are committed, she said, to aiding businesses joining Maricopa’s market.

“The biggest thing to remember is that the city is young,” she said. “It’s 12 years old, and while the community members need and want all these amenities as well as opportunities, they’re coming and it takes time and it takes diligence and it takes dedication.”

The story was published in the January issue of InMaricopa News.