BENSON Economic Outlook 2015 Robert Carreira, Ph.D.

REAL GDP GROWTH (%)

JOBS United StatesArizonaCochise County Pre-Recession High mil (Jan 08) 2.69 mil (Oct 07) 39,300 (Jun 08) Recessionary Low mil (Feb 10) 2.37 mil (Sep 10) 33,900 (Jul 13) Recessionary Job Losses -8.7 mil -6.3% -313, % -5, % Current * mil2.62 mil34,200 From High +4.0 million 3.1% -62, % -5, % From Low mil 9.8% +250, % % * AZ and CC, August 2015; U.S., September 2015

COCHISE COUNTY JOBS BY INDUSTRY Peak Current (Aug 2015) Change from Peak Change from Peak (%) Construction (incl. mining) 2,900 (Jun 2006) 1,100 -1, % Manufacturing 900 (Oct 2008) % Trade, Transportation, and Utilities 7,100 (Dec 2007) 6,100 -1, % Information 700 (Mar 2011) % Financial Activities 1,100 (Dec 2008) % Professional and Business Services 6,200 (Jan 2010) 4,300 -1, % Educational and Health Services 5,000 (Sep 2012) 4, % Leisure and Hospitality 4,300 (Apr 2008) 3, % Other Services 1,100 (Mar 2006) 1, % Federal Government 6,000 (Aug 2011) 5, % State and Local Government 7,700 (Jun 2008) 6,400 -1, %

UNEMPLOYMENT Pre- Recession Low Recessionary High One Year Ago Current* United States 4.4% (May 2007) 10.0% (Oct 2009) 5.9%5.1% Arizona 3.7% (Jul 2007) 11.2% (Dec 2009) 6.7%6.3% Cochise County 3.5% (May 2007) 10.2% (June 2011) 8.4%7.8% Benson 6.1% (May 2007) 12.0% (Jun 2011) 9.9%9.1% * AZ and CC, August 2015; U.S., September 2015

LOCAL LABOR MARKET OUTLOOK Upside Villages at Vigneto Countywide New hospital in Sierra Vista = healthcare jobs + economic development asset (businesses, retirees) State/national economy improvement = tourism Downside Government (federal, state & local) Population declines No sign of sustained job creation Much instability

RETAIL SALES GROWTH BensonCochise CountyArizona 2015*1.9% 8.9%10.0% % -1.0%1.9% % 1.5%7.3% % 2.5% % 7.1% % -3.1% % -10.7% % -13.1% % 4.3% Inflation-adjusted to CPI-U *Jan-Jul

RESTAURANT & BAR SALES GROWTH BensonCochise CountyArizona 2015*0.3% 5.0%7.3% % 1.4%7.3% % -0.5%2.2% % -4.4% 5.0% % -0.2% 2.1% % 0.0% 1.8% % 0.3% -5.4% % 0.2% -6.2% % 0.1% -0.2% Inflation-adjusted to CPI-U *Jan-Jul

ACCOMMODATIONS SALES GROWTH BensonCochise CountyArizona % 10.2%14.8% % -0.6%9.9% % -12.2%0.4% % -17.2% 1.7% % -13.1% 2.0% % 8.3% 0.8% % -9.0% -16.5% % 1.0% -8.4% % 19.7% 1.4% Inflation-adjusted to CPI-U *Jan-Jul

SALES OUTLOOK Retail Strong rebound countywide; modest growth in Benson Accommodation Countywide: End of hospital construction + Fort Huachuca lodging = trouble Benson: Downward trend, but likely will see bounce back Tourism opportunities with improving state/national economies Restaurant & Bar Countywide: More establishments, but demand not expanding Benson: Modest growth

HOME SALES

MEDIAN HOME PRICE

FORECLOSURES (% OF SALES)

NEW HOME CONSTRUCTION

REAL ESTATE & CONSTRUCTION OUTLOOK Foreclosures Upward pressure on sales Downward pressure on prices Dampened demand for new construction Population declines = downward pressure on new construction Villages at Vigneto

CONCLUSION Recession Kept out of recession by Fort Huachuca Cochise County recession began in 2011 Downside Government declines at all levels Population losses Foreclosures Upside Improving state and national economies will help tourism Villages at Vigneto

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