Tucson Economic Forecast
This article authored by: Rob Hallberg
I was fortunate last week to attend a seminar, “Economic Outlook 2015 – 2016” sponsored by our own prestigious Eller College of the University of Arizona. Over 500 Tucson Business, Government & Education Leaders attended the event, which was held at the Westin La Paloma.
The first speaker was Anthony Chan, Chief Economist for Chase Morgan, whose talk focused on International economics. The global economy has an impact on the US as poor economic conditions will result in less demand for our goods and services.
Most countries are experiencing some growth, albeit less than the US. Our closest political and economic partners in Europe are forecasting a growth rate of about 1%, while the US economy has grown over 2.3% in 2014. China, of course, is still one on of the world’s fastest growing economies, but they are showing signs of slowing down.
George Hammond of the University of Arizona Eller College of Management presented the US and Tucson economic analysis. George first confirmed what many of us have suspected; that Tucson is not experiencing the same rate of economic growth that is being reported Nationally.
A key indicator of Tucson’s growth is the unemployment rate. It currently stands at 6.8%, a full percentage point above the National rate. The Residential Construction industry makes up a large percentage of Tucson’s economy and current levels have fallen to what they were in the early 1990’s.
A big factor in the unemployment rate is, of course, population growth. If there are jobs available the population will increase to meet the demand. Last year Tucson’s population growth was at a paltry 0.6%.
There is hope, however. The speakers predict that Tucson will start catching up to the rest of the country in 2015 and 2016. This is primarily due to gains in the US economy which will result in more people migrating to the West. Gas prices have already given a significant boost to the economy and prices are expected to fall even more. Anthony Chan predicted a drop in Tucson’s unemployment rate by almost 1%, to about 6% by the end of 2014.
In conclusion: Yes, Tucson growth has lagged behind the Nation by a full 1%; however, Tucson will continue to grow and eventually at a faster rate than the US as we catch up to the rest of the country in late 2016 or 2017.
Rob and Catherine Hallberg are Associate Brokers with Long Realty, a Berkshire-Hathaway Affiliate and Southern Arizona’s largest Brokerage. Since 2008, they have been ranked in the top 5% to 8% of all U.S. REALTORS®. Send Rob and Catherine an email for a fast response to your questions; for an even faster response, Call (520) 407-8667.