They die because an economy becomes vulnerable to exogenous shocks or asset bubbles or a tightening in the credit market. 53 Elliott D. Pollack & Company
As recoveries get older, they become more vulnerable to shocks... …Just as people get older they become more vulnerable to diseases. 54 Elliott D. Pollack & Company
So, where does this leave us? 55 Elliott D. Pollack & Company
2019 will probably still be a good year. 56 Elliott D. Pollack & Company
Tax cuts, deficit spending and plant & equipment spending should keep things going nicely. 57 Elliott D. Pollack & Company
Probability of a recession still relatively low 58 Elliott D. Pollack & Company
We’re probably in the 8th inning 59 Elliott D. Pollack & Company
Welcome to Phoenix 60 Elliott D. Pollack & Company
The New Norm 61 Elliott D. Pollack & Company
Job Growth 2018 Alaska YTD October 2018 vs. YTD October 2017 Source: U.S. BLS 50 4 31 9 3 12 2 1 11 6 18 10 Hawaii 7 17 Jobs growing 5 Top 10 8 Jobs declining 62 Elliott D. Pollack & Company
Arizona Employment Growth Arizona’s Rank Out of 50 States Source: Arizona State University, U.S. Bureau of Labor Statistics Year Rank Year Rank 1997 2 2008 46 1998 1 2009 49 1999 2 2010 49 2000 5 2011 27 2001 9 2012 9 2002 10 2013 9 2003 4 2014 18 2004 2 2015 11 2005 2 2016 7 2006 2 2017 5 2007 2018* 7 17 63 Elliott D. Pollack & Company *YTD October 2018 vs YTD October 2017
Employment Growth From Bottom of Recession to Now Seasonally Adjusted Source: BLS % of Arizona 2017 Annual Area % Change Growth Wages United States 14.9% $55,331 Arizona 21.4% 100.0% $49,752 Greater Phoenix 26.3% 87.4% $52,043 Greater Tucson 9.7% 6.7% $43,584 Balance of State 8.9% 5.9% $37,579 Note: Wages for Private industries 64 Bottom of Recession Sept. 2010 to October 2018 Elliott D. Pollack & Company
Phoenix-Mesa-Scottsdale Employment Growth (Ranking among all metro areas greater than 1,000,000) Source: Arizona State University, U.S. Bureau of Labor Statistics Year Rank # MSA’s Year Rank # MSA’s 1997 2 22 2008 25 29 1998 1 23 2009 23 24 1999 3 24 2010 23 23 2000 7 25 2011 14 25 2001 7 26 2012 10 28 2002 5 25 2013 7 29 2003 3 25 2014 15 31 2004 3 25 2015 10 32 2005 1 26 2016 7 34 2006 1 27 2017 5 34 2007 10 29 2018* 5 35 65 Elliott D. Pollack & Company *YTD October 2018 vs YTD October 2017
Greater Phoenix Employment* Annual Percent Change 1988–2019** Source: Office of Economic Opportunity Recession Periods 8.0% 7.3% 7.2% 6.6% 6.2% 5.9% 6.0% 5.4% 5.4% 5.4% 4.9% 4.6% 3.9% Pre-2008 Avg. 3.8% 4.0% 3.5% 3.4% 3.3% 3.2% 2.9% 2.8% 2.8% 2.5% 2.5% 2.3% 2.2% 1.7% 2.0% 1.5% 1.5% 1.3% 1.1% 0.0% 0.0% -0.4% -2.0% -1.9% -2.5% -4.0% -6.0% -8.0% -7.8% *Non-agricultural wage & salary employment. Changed from SIC to NAICS reporting in 1990. 66 **2018 & 2019 forecasts from Elliott D. Pollack & Co. as of November 2018. Elliott D. Pollack & Company
Greater Phoenix Employment* Net Annual Growth Change 1988–2019** Source: Office of Economic Opportunity (000’s) Recession Periods 120.0 104.5 97.4 82.188.8 70.575.1 80.0 70.8 66.8 64.4 62.064.6 65.158.8 54.9 53.9 53.7 51.3 49.8 43.0 41.1 40.0 31.6 25.6 23.821.8 24.1 20.0 11.2 0.0 -0.1 -3.5 -40.0 -32.2 -47.9 -80.0 -120.0 -146.8 -160.0 *Non-agricultural wage & salary employment. Changed from SIC to NAICS reporting in 1990. 67 **2018 & 2019 forecasts from Elliott D. Pollack & Co. as of November 2018. Elliott D. Pollack & Company
Employment: Greater Phoenix to U.S. Annual Growth Rate 1990-2017 Source: Bureau of Labor Statistics Recession Periods 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% U.S. -4.0% Greater Phoenix -6.0% -8.0% 68 Elliott D. Pollack & Company
Pinal County • Nikola Motors • Approximately 1,750+ new jobs by 2025 • Lucid Motors • Approximately 2,000+ new jobs by 2025 69 Elliott D. Pollack & Company
Pinal County • Potentially 3,900 jobs from Nikola Motors and Lucid Motors Taking the multiplier ripple effect into account, this could equate to up to 10,000 total jobs 2018 average 59,900 nonfarm jobs • Many of those indirect and induced jobs could locate nearby. • The opportunity for Pinal County is there. 70 Elliott D. Pollack & Company
Pinal County Largest Employment Source: Arizona COG/MPO Employer Database Rank Business Name Locations Employees 1 State of Arizona 25 2,840 2 Walmart 7 2,290 3 Pinal County 59 2,160 4 Corecivic Inc 6 1,920 5 Casa Grande Union High School District No 82 19 1,180 6 Harrah’s Ak-chin Hotel and Casino 1 800 7 Pinal County Community College District 1 760 8 Banner Health 7 680 9 Fry’s Food Stores 6 680 10 Florence Unified School District 8 650 71 Elliott D. Pollack & Company
Pinal County’s Pipeline Source: Pinal County Economic Development Department Target Industry Project Phoenix Mart Transportation/ Logistics IPAZ Intermodal Facility Lucid Motors LKQ Manufacturing Nikola Motors Severtson Movie Screens Health Services Sun Health Clinic/Pharmacy International Diplomatic Security Company Aerospace & Defense High Tech Military Testing Resolution Copper Solar Farm & Battery Storage ASARCO Expansion Natural & Renewable Resources Florence Copper Mine Filtering Plant Bio Gas Facility Attesa Tourism Dreamport Villages Casino Resort 72 Elliott D. Pollack & Company
Jobs in Phoenix? 73 Elliott D. Pollack & Company
Greater Phoenix 2018* Net Job Growth and Wages Educational and Health Services $51,700 Construction $56,408 Professional and Business Services $56,940 Trade, Transportation, and Utilities $47,404 Leisure and Hospitality $25,004 Manufacturing $73,952 Financial Activities $69,822 Government $53,828 $73,882 Information $50,605 Natural Resources and Mining Other Services $38,901 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 (1000’s) 74 *Data through October 2018; 2017 private wages Elliott D. Pollack & Company
Greater Phoenix 2018* % Job Growth and Wages Construction $56,408 $73,952 Manufacturing Educational and Health Services $51,700 Leisure and Hospitality $25,004 Professional and Business Services $56,940 $73,847 Information $69,822 Financial Activities $47,404 Trade, Transportation, and Utilities $53,828 Government $38,901 Other Services Natural Resources and Mining $50,605 -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 75 *Data through October 2018; 2017 private wages Elliott D. Pollack & Company
Pinal County 2018* Net Job Growth and Wages Trade, transportation, and utilities $34,608 $18,073 Leisure and hospitality $53,076 Manufacturing Mining and Construction $46,617 Professional and business services $45,559 Government $48,357 $40,581 Financial activities Information $34,250 Education and health services $41,170 Other services $30,552 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0.25 0.3 (1000’s) 76 *Data through October 2018; 2017 private wages Elliott D. Pollack & Company
Pinal County 2018* % Job Growth and Wages Mining and Construction $46,617 Manufacturing $53,076 $18,073 Leisure and hospitality Trade, transportation, and utilities $34,608 Professional and business services $45,559 $40,581 Financial activities Government $48,357 Education and health services $41,170 $30,552 Other services Information $34,250 -9.0% -6.0% -3.0% 0.0% 3.0% 6.0% 9.0% 77 *Data through October 2018; 2017 private wages Elliott D. Pollack & Company
Where are the Inflows of Population? 78 Elliott D. Pollack & Company
Population Growth after Recessions Greater Phoenix Source: Office of Economic Opportunity Years % Growth APR 1975-1980 20.1% 3.7% 1981-1990 35.5% 3.4% 1991-2001 46.0% 3.9% 2001-2007 21.6% 3.3% 2009-2017 8.7% 1.3% 79 Elliott D. Pollack & Company
Growth itself is an economic driver in Greater Phoenix– People moving to the State create demand for goods and services that create more jobs. When you grow around 1.8% instead of 3.6%, the part of the economy that is based on servicing new population becomes much smaller. 80 Elliott D. Pollack & Company
Greater Phoenix Population Source: U.S. Bureau of Census; Office of Economic Opportunity; UofA Forecasting Project Period Ending Population Change APR 1970 1,039,807 3.5% 1980 1,600,093 560,286 4.4% 1990 2,249,116 649,023 3.5% 2000 3,275,362 1,026,246 3.8% 2010 4,200,427 925,065 2.5% 2015 4,482,906 282,479 1.3% 2020* 4,903,717 420,811 1.8% 2025* 5,339,441 435,724 1.7% *Forecasts from UofA 1970-2010 10 year period 81 Elliott D. Pollack & Company 2010-2025 5 year period
Greater Phoenix Population Annual Percent Change 1988–2019* Source: Office of Economic Opportunity, EDPCo Recession Periods 5.0% 4.6% 4.3% 4.3% 4.3% 4.2% 4.2% 4.0% 3.8% 3.8% 3.7% 3.6% 3.5% Pre-2008 Avg. 3.4% 3.1% 3.0% 2.9% 3.0% 2.8% 2.7% 2.6% 2.5% 2.4% 1.9% 1.9% 2.0% 1.8% 1.7% 1.7% 1.6% 1.6% 1.5% 1.3% 1.2% 1.0% 0.7% 0.5% 0.3% 0.0% *Estimates for 2011, 2012, 2013, 2014, 2015 and 2016 and forecasts for 2018 and 2019 82 from Elliott D. Pollack & Co. as of September 2018. Elliott D. Pollack & Company
Greater Phoenix Population Annual Net Change 1988–2019* Source: Office of Economic Opportunity, EDPCo (000’s) Recession Periods 160.0 141.6 141.5 133.6 130.4 127.7 118.6 118.6 115.6 120.0 111.9 111.0 105.9 104.2 92.0 89.9 84.7 83.8 83.7 79.6 78.378.9 80.0 71.372.5 65.9 64.5 60.1 54.9 54.6 52.4 40.0 29.7 29.4 19.1 14.3 0.0 *Estimates for 2011, 2012, 2013, 2014, 2015 and 2016 and forecasts for 2018 and 2019 83 from Elliott D. Pollack & Co. as of September 2018. Elliott D. Pollack & Company
Population: Greater Phoenix to U.S. Annual Growth Rate 1990-2017 Source: U.S. Census Bureau; Office of Economic Opportunity; EDPCo 5.0% U.S. Greater Phoenix 4.0% 3.0% 2.0% 1.0% 0.0% 84 Elliott D. Pollack & Company
Moving??? 85 Elliott D. Pollack & Company
Total Movers as a % of Total U.S. Population Source: U.S. Census Bureau Recession Periods 8% 7% 6% 5% 4% 3% Note: Includes all movers except movers within same 86 county Elliott D. Pollack & Company
Movers from an Outside Area 1981-2018 Source: U.S. Census Bureau (1,000’s) Recession Periods 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Same State Different State Abroad 87 Elliott D. Pollack & Company
Arizona Capture Rate Source: U.S. Census Bureau Recession Periods 12% 10% 8% 6% 4% 2% 0% Note: Does not include in-state movers; Net migration numbers. 88 Elliott D. Pollack & Company
2017 Population Growth Rank By County Source: U.S. Census Bureau Percent Rank County Population Net Chg. Chg. 1 Maricopa, AZ 4,307,033 73,650 1.7% 2 Clark, NV 2,204,079 47,355 2.2% 3 Riverside, CA 2,423,266 36,744 1.5% 4 Harris, TX 4,652,980 35,939 0.8% 5 Tarrant, TX 2,054,475 32,729 1.6% 6 King, WA 2,188,649 32,687 1.5% 7 Bexar, TX 1,958,578 30,831 1.6% 8 Dallas, TX 2,618,148 30,686 1.2% 9 Denton, TX 836,210 27,911 3.5% 10 Collin, TX 969,603 27,150 2.9% 89 Elliott D. Pollack & Company
Housing Market Outlook 90 Elliott D. Pollack & Company
Overview of Single Family Housing • Current conditions in the single family market are the polar opposite of 2007-2011 • No signs of over supply • Signs of strong pent-up demand • With rising prices and rising interest rates, affordability becomes more of an issue • While the housing market will be under pressure over the near term, the outlook over the next 5 years is excellent 91 Elliott D. Pollack & Company
Affordability is a key-concern, for millennials entering the marketplace and for the retirement population moving to Phoenix. 92 Elliott D. Pollack & Company
93 Elliott D. Pollack & Company
Housing Opportunity Index 2018 Q3 Source: NAHB/Wells Fargo 80 67 66.7 70 56.6 56.4 60 52.3 47.6 50 42.9 40 35.6 30 20 14.1 7.6 10 0 94 Elliott D. Pollack & Company
Arizona 95 Elliott D. Pollack & Company
Housing Opportunity Index 1992-2018 Source: NAHB/Wells Fargo 90 80 70 60 U.S. 50 Greater Phoenix 40 30 20 96 Elliott D. Pollack & Company
Maricopa County Median Price of New & Resale Homes 2000-2018* Recession Periods Source: Information Market $375,000 $348,990 $350,000 $325,000 $311,928 $300,000 $275,000 $258,000 $253,418 $250,000 $225,000 $200,000 $198,136 $175,000 New Home Sales $150,000 Resale Home Sales $125,000 $112,000 $100,000 Note: refers to single family homes and condominiums 97 Elliott D. Pollack & Company *Data through October 2018.
Resales Pinal County Number of Resales Source: Cromford Report 12,000 10,000 8,000 6,000 4,000 2,000 0 98 Elliott D. Pollack & Company *Data through November 2018.
Resales Pinal County Median Sales Price Source: Cromford Report $250,000 $200,000 $150,000 $100,000 $50,000 $0 99 Elliott D. Pollack & Company *Data through November 2018.
10 12 14 16 18 20 0 2 4 6 8 Elliott D. Pollack & Company Jan-02 Jul-02 Jan-03 Greater Phoenix Month’s Supply Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Source: ARMLS Jul-08 Jan-09 2002-2018 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 *Data through October 2018 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 100
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