Economic Outlook 2016 Robert Carreira, Ph.D. CENTER FOR ECONOMIC RESEARCH BISBEE Economic Outlook 2016 Robert Carreira, Ph.D.

Real GDP Growth (%) * US: Q1-3; AZ: Q1 only

Jobs United States Arizona Cochise County 138.4 mil 2.69 mil 39,300 Pre-Recession High 138.4 mil (Jan 08) 2.69 mil (Oct 07) 39,300 (Jun 08) Recessionary Low 129.7 mil (Feb 10) 2.37 mil (Sep 10) 33,900 (Jul 13) Recessionary Job Losses -8.7 mil -6.3% -313,700 -11.7% -5,400 -13.7% Current * 145.0 mil 2.72 mil 34,200 From High +6.5 million 4.7% +31,400 1.2% -5,100 -13.0% From Low +15.2 mil 11.7% +345,100 14.5% 300 0.9% * October 2016

Cochise County Jobs by Industry Peak Current (Oct 2016) Change from Peak Change from Peak (%) Construction and Mining 2,900 (Jun 2006) 1,200 -1,700 -58.6% Manufacturing 900 (Oct 2008) 600 -300 -33.3% Trade, Transportation, and Utilities 7,100 (Dec 2007) 6,000 -1,100 -15.5% Information 700 (Mar 2011) 400 -42.9% Financial Activities 1,100 (Dec 2008) 1,000 -100 -10.0% Professional and Business Services 6,200 (Jan 2010) 3,800 -2,400 -38.7% Educational and Health Services 5,800 (May 2016) 5,100 -700 -12.1% Leisure and Hospitality 4,300 (Apr 2008) -500 -11.6% Other Services (Mar 2006) -45.5% Federal Government (Aug 2011) 4,800 -1,200 -20.0% State and Local Government 7,700 (Jun 2008) 6,900 -800 -12.0%

Unemployment 4.4% 10.0% 5.0% 4.6% 3.7% 11.2% 6.1% 5.2% 3.5% 10.2% 7.0% Pre- Recession Low Recessionary High One Year Ago Current* United States 4.4% (May 2007) 10.0% (Oct 2009) 5.0% 4.6% Arizona 3.7% (Jul 2007) 11.2% (Dec 2009) 6.1% 5.2% Cochise County 3.5% 10.2% (Jun 2011) 7.0% 5.9% Bisbee 3.6% 9.7% 7.1% 6.0% * US: November 2016; AZ: October 2016; Bisbee: December 2015 (Note: Cochise County and Bisbee not seasonally adjusted)

Local Labor Market Outlook Upside County beginning to see year-over-year job gains Improving state and national economy = tourism Countywide: Villages at Vigneto Downside Still at bottom—long way up Wrap-up of Freeport-McMoRan activities

Retail Sales Growth (%) Bisbee Cochise County Arizona 2016* -8.9 -4.6 1.6 2015 -1.1 2.4 8.8 2014 -3.6 -1.0 1.9 2013 -2.3 1.5 7.3 2012 -4.5 4.5 2.5 2011 5.6 -1.2 7.1 2010 1.7 -4.8 -3.1 2009 -6.9 -4.2 -10.7 2008 -0.4 -6.5 -13.1 2007 3.4 -1.3 4.3 Inflation-adjusted to CPI-U *AZ & CC: Jan-Sep; Bisbee: Jan-Jul

Restaurant & Bar Sales Growth (%) Bisbee Cochise County Arizona 2016* -17.0 2.9 7.1 2015 8.3 3.9 5.1 2014 4.1 1.4 7.3 2013 -0.5 2.2 2012 13.6 -4.4 5.0 2011 -8.8 -0.2 2.1 2010 2.8 0.0 1.8 2009 -6.8 0.3 -5.4 2008 -0.6 0.2 -6.2 2007 -4.8 0.1 Inflation-adjusted to CPI-U *AZ & CC: Jan-Sep; Bisbee: Jan-Jul

Hotel/Motel Sales Growth (%) Bisbee Cochise County Arizona 2016* 40.6 -4.6 1.6 2015 -0.7 8.2 12.2 2014 11.9 -0.6 9.9 2013 -10.8 -12.2 0.4 2012 5.6 -17.2 1.7 2011 -2.7 -13.1 2.0 2010 -13.2 8.3 0.8 2009 -27.3 -9.0 -16.5 2008 11.1 1.0 -8.4 2007 20.6 19.7 1.4 Inflation-adjusted to CPI-U *AZ & CC: Jan-Sep; Bisbee: Jan-Jul

Sales Outlook Retail Restaurant & Bar Hotel/Motel Bisbee and Countywide: Continued weak performance Restaurant & Bar Bisbee: Slowdown from prior strong performance Countywide: Modest growth Hotel/Motel Bisbee: Strong growth Countywide: Continued weak performance

Home Sales

Median Home Price

Foreclosures (% of sales)

New Home Construction Cochise County

Real Estate & Construction Outlook Foreclosures Upward pressure on sales Downward pressure on prices Dampened demand for new construction Population declines = downward pressure on sales & new construction Bisbee: Potential new hotel & senior affordable housing Countywide: Villages at Vigneto

Conclusion Recession Downside Upside Kept out of 2008-09 recession by Fort Huachuca Cochise County recession began in 2011 Downside Population losses Declining peso vs. dollar Wrap-up of Freeport-McMoRan activities Upside Improving state and national economies will help tourism Foreclosures and home values improving Potential new hotel and affordable senior housing in Bisbee Villages at Vigneto

THE END CochiseEconomy.com