Douglas Economic Outlook 2012

GROSS DOMESTIC PRODUCT Seasonally Adjusted Annual Rate

INFLATION (CPI) Compared to same month previous year

NATIONAL OUTLOOK Continued slow economic growth Labor market improvement sluggish Short- and long-run inflation threat remains

GDP BY STATE

THE LOCAL ECONOMY Cochise County & Douglas

COCHISE COUNTY RETAIL SALES GROWTH Inflation adjusted; compared to same month previous year

DOUGLAS RETAIL SALES TAX REVENUE Unadjusted; compared to same month previous year

Cochise County 2012: 1.8% * 2011: -1.2% 2010: -4.8% 2009: -4.2% 2008: -6.5% 2007: -1.3% Douglas (Retail Sales Tax Revenue) 2012: 6.8% * 2011: 5.5% 2010: -1.1% 2009: -4.8% 2008: 6.1% 2007: 2.2% RETAIL SALES RECENT ACTIVITY * Jan-Jul only; comparison to same period the previous year

RESTAURANT AND BAR SALES GROWTH Inflation adjusted; compared to same month previous year

Cochise County 2012: -4.5% * 2011: -0.2% 2010: 0.0% 2009: 0.3% 2008: 0.2% 2007: 0.1% Douglas 2012: 6.4% * 2011: 12.9% 2010: -1.2% 2009: 0.4% 2008: -7.7% 2007: -2.9% RESTAURANT & BAR SALES RECENT ACTIVITY * Jan-Jul only; comparison to same period the previous year

ACCOMMODATION SALES GROWTH Inflation adjusted; compared to same month previous year

Cochise County 2012: -17.7% * 2011: -13.1% 2010: 8.3% 2009: -9.0% 2008: 1.0% 2007: 19.7% Douglas 2012: -28.2% * ACCOMMODATION SALES RECENT ACTIVITY * Jan-Jul only; comparison to same period the previous year

SALES OUTLOOK Modest retail sales growth Restaurant and bar and accommodation sales trending downward

EMPLOYMENT

UNEMPLOYMENT RATES * Jan-Jul only; seasonally adjusted

MONTHLY UNEMPLOYMENT RATES Seasonally adjusted

COCHISE COUNTY NONFARM JOB GROWTH Compared to same month previous year

COCHISE COUNTY JOB GAINS/LOSSES BY INDUSTRY 12 months ended July 2012 * Includes mining

COCHISE COUNTY JOB GROWTH RATE BY INDUSTRY 12 months ended July 2012 * Includes mining

EMPLOYMENT OUTLOOK Labor market improvement sluggish Continued slow improvement likely through Blips along the way

HOUSING AND REAL ESTATE

NEW HOME CONSTRUCTION Single Family Residential Building Permits

MLS HOME SALES

MEDIAN HOME PRICE * 1 st half only

OUTLOOK New residential construction picking up countywide Douglas historically has low levels of new residential construction Boost to sales from foreclosures/lower prices/lower interest rates Continued downward pressure on median price

CONCLUSION Moving in the right direction, but slowly Local retail sales show promise, hospitality continues to struggle Countywide, defense spending cuts pose threat Labor market improvement slow Construction and home sales picking up Election year politics