Cochise College Center for Economic Research Cochise College CENTER FOR ECONOMIC RESEARCH Economic Outlook Sierra Vista, AZ

Cochise College Center for Economic Research What Happened Fed lowers interest rates Lower rates give rise to subprime mortgage market High default rates shake investor confidence Losses in derivatives further shake confidence Slowdown in housing & real estate spills over to other sectors TARP is introduced & modified People begin losing jobs or worrying about it Consumer and investment spending slows Economy ends up in recessi on

Cochise College Center for Economic Research U.S. Recessions Since 1945 PeakTroughDuration (Months) February 1945October November 1948October July 1953May August 1957April April 1960February December 1969November November 1973March January 1980July July 1981November July 1990March March 2001November December 2007?16+ and counting

Cochise College Center for Economic Research Gross Domestic Product Seasonally Adjusted Annual Rate

Cochise College Center for Economic Research GDP = Consumption Spending + Domestic Investment + Government Spending + Net Exports

Cochise College Center for Economic Research Inflation (CPI) Compared to same month previous year

Cochise College Center for Economic Research National Outlook Recovery possible in late 2009, early 2010 Some positive signs in early April Financial markets must improve Investor & consumer confidence must improve Fiscal stimulus will have impact

Cochise College Center for Economic Research The Local Economy How Cochise County and Sierra Vista are impacted

Cochise College Center for Economic Research Retail Trade & Commerce

Cochise College Center for Economic Research Retail Sales Growth Inflation adjusted; compared to same month previous year

Cochise College Center for Economic Research Retail Sales Recent Activity Cochise County retail market in recession since November : -1.3% 2007: -1.3% 2008: -6.5% 2008: -6.5% 2009 (Jan): -6.6% 2009 (Jan): -6.6% Sierra Vista retail market in recession since November : 2.6% 2007: 2.6% 2008: -6.6% 2008: -6.6% 2009 (Jan): -6.9% 2009 (Jan): -6.9%

Cochise College Center for Economic Research Restaurant & Bar Sales Growth Inflation adjusted; compared to same month previous year

Cochise College Center for Economic Research Restaurant & Bar Sales Recent Activity Cochise County restaurant & bar sales in recession since October : 0.1% 2007: 0.1% 2008: 0.2% 2008: 0.2% 2009 (Jan): -19.5% 2009 (Jan): -19.5% Sierra Vista restaurant & bar sales in recession since October : 2.9% 2007: 2.9% 2008: -2.0% 2008: -2.0% 2009 (Jan): -0.3% 2009 (Jan): -0.3%

Cochise College Center for Economic Research Accommodation Sales Growth Inflation adjusted; compared to same month previous year

Cochise College Center for Economic Research Accommodation Sales Recent Activity Cochise County accommodation sales in recession since April : 19.7% 2007: 19.7% 2008: -1.0% 2008: -1.0% 2009 (Jan): -8.2% 2009 (Jan): -8.2% Sierra Vista accommodation sales NOT in recession 2007: 21.1% 2007: 21.1% 2008: 19.4% 2008: 19.4% 2009 (Jan): 8.6% 2009 (Jan): 8.6%

Cochise College Center for Economic Research Sales Outlook County & city retail sales at or near bottom— recovery likely in late 2009 Restaurant & bar sales at or near bottom— recovery likely in mid-2009 Sierra Vista accommodation should continue above trend County accommodation at or near bottom— recovery likely in 2009 or early 2010

Cochise College Center for Economic Research Employment

Unemployment Rates * Jan-Feb only; seasonally adjusted

Cochise College Center for Economic Research Monthly Unemployment Rates Seasonally Adjusted

Cochise College Center for Economic Research Cochise County Monthly Nonfarm Job Growth Compared to same month previous year

Cochise College Center for Economic Research Cochise County Nonfarm Job Gains/Losses By Industry 12 months ending Feb 2009

Cochise College Center for Economic Research Cochise County Nonfarm Job Growth By Industry 12 months ending Feb 2009

Cochise College Center for Economic Research Employment Outlook Expect continued job losses & rising unemployment through 2009 County and city will fare better than state and nation County and city will begin to recover before state and nation

Cochise College Center for Economic Research Housing, Real Estate, & Commercial Construction

Cochise College Center for Economic Research New Home Construction Single Family Residential Building Permits

Cochise College Center for Economic Research New Home Construction—Sierra Vista Single Family Residential Building Permits

Cochise College Center for Economic Research Recent SFR Permit Activity Cochise County 2008: 404 (-14.4%) 2008: 404 (-14.4%) 2007: : 472 Sierra Vista 2009 (1 st Qtr): 24 (-53.8%) 2009 (1 st Qtr): 24 (-53.8%) 2008: 199 (11.8%) 2008: 199 (11.8%) 2007: : 178

Cochise College Center for Economic Research Existing Home Sales—Sierra Vista Area

Cochise College Center for Economic Research Median Home Price (Site Built)

Cochise College Center for Economic Research Median Home Price (Site Built) Cochise County 2004: $150, : $186,000 (24.0%) 2006: $205,250 (10.3%) 2007: $206,579 (0.6%) 2008: $195,000 (-5.6%) Sierra Vista Area 2004: $162, : $199,900 (23.0%) 2006: $216,713 (8.4%) 2007: $217,479 (0.4%) 2008: $209,500 (-3.7%)

Cochise College Center for Economic Research New Commercial Construction—Sierra Vista

Cochise College Center for Economic Research Outlook New residential construction likely at or near bottom (county & city) Existing home sales approaching bottom Home prices should continue to hold or decline modestly Commercial construction remains relatively strong

Cochise College Center for Economic Research Conclusion Based on historical trends, most of the recession is probably behind us The economic stimulus package will have an impact on the economy There have been some signs that we’re at the bottom Employment probably won’t improve until late 2009 or early 2010

Cochise College Center for Economic Research