1. Battling Headwinds: Arizona’s Economy Struggles Upward Presented to the Tucson Association of REALTORS® February 13, 2015 George Hammond, Ph.D. Director Economic and Business Research Center

2. Visit the new Arizona’s Economy azeconomy.eller.arizona.edu

3. Real-time data at your fingertips. The Arizona’s Economy App Free at the Apple App Store and Google Play.

4. @Eller_EBRC Facebook.com/Eller.EBRC Follow EBRC on Facebook and Twitter

5. UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT mapazdashboard.arizona.edu 5

6. Economy Overview 6

7. The Arizona Economy Now ► Arizona and Tucson continue to grow ► But growth is slow ► Construction remains the missing link ► Population and household growth are weak ► Federal fiscal drag still an issue ► Federal procurement spending still falling ► Gas prices much lower 7 UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT

8. 8 Job Growth in Selected Regions Over-the-Year UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT

9. 9 Job Replacement Rates Percent Percent of jobs lost during the Great Recession that have been replaced.

10. 10 UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT Job Replacement Rates Percent Percent of jobs lost during the Great Recession that have been replaced.

11. 11 UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT Working Age College Attainment Rate Percent

12. 12 UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT Working Age College Attainment Rate

13. 13 UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT Patents Per 10,000 Workers

14. 14 Housing Permits UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT Tucson MSA

15. 15 House Prices UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT

16. 16 Federal Government Jobs UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT Arizona, Over-the-Year Growth

17. 17 Federal Procurement Spending UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT Arizona, $Billions $Billions

18. 18 UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT Tucson MSA Federal Government Civilian and Military, Share of GDP in 2012

19. Gasoline Price Dividend ► If gasoline prices fall by $1.00/Gal, and stay there for a year ► That means $2.67 billion for Arizonans to spend on other priorities, other things the same 19 UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT (Very) Back of the Envelope $371 million Tucson MSA $1.70 billion Phoenix MSA $134 billion U.S.

20. Tucson MSA Outlook Overview ► Slow growth gradually improves ► Construction activity gains momentum as U.S. residential mobility improves ► Federal government: a bit less of a drag ► Most of the job gains will be in service- providing sectors ► Modest income and sales growth 20 UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT

21. 21 UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT Tucson MSA Job Growth

22. 22 Population & Permit Growth Tucson MSA

23. 23 Tucson MSA Outlook UNIVERSITY OF ARIZONA / ELLER COLLEGE OF MANAGEMENT

24. AZMEX.ELLER.ARIZONA.EDU Arizona-Mexico Economic Indicators