1. 1 Economic and Workforce Overview April 27 th, 2012 PVCC Strategic Planning Steering Committee John Catapano, Research and Communications Coordinator Center for Workforce Development

2. U.S. Economic Overview 2 Hopefully, 2012 is the Year Everyone Actually Believes that we are in a Recovery (after three years!) No More Fears of a “Double Dip” Recession

3. Growth in Real GDP 2007 Q1 to 2011 Q4 (annualized) 3

4. Fears of a “Double Dip” Recession 4 Stock market volatility European debt crisis Depressed housing market Banks reluctant to lend Impact of healthcare reform Impact of Dodd-Frank 2012 elections Debt ceiling debate Concern about the deficit/debt End of federal stimulus Less government spending High oil and commodity prices Turmoil in the Middle East Japanese earthquake and tsunami Extension of Bush tax cuts Concerns over future taxes and regulations Political polarization Downgrade of U.S. debt

5. U.S. Private Sector Employment Growth January 2008 to Present (month over month, in thousands) 5

6. Percent Job Losses in Post WWII Recessions 6

7. 7 U.S. Unemployment Rate January 2000 to Present

8. Job Losses and Gains Since Dec-07 Peak (in thousands) Trade, Trans, Util, Other Serv Manufacturing Prof & Bus Serv, Information Construction & Mining Financial Activities Leisure & Hospitality Government Education & Health Serv Recession Recovery 8

9. 9 Technology is Changing the Nature of Work Disaggregation of Jobs Geographic Mismatches Between Jobs and Workers Growing Pools of Untapped Talent Disparity in Income Growth The Skills Gap

10. 10 Driven by: Demographic Changes Immigration Technology Government Policy The Decline of Organized Labor Excessive Executive Compensation Education Income Inequality

11. 11 Upside: Good job numbers Companies remain highly profitable Banks are loosening purse strings Consumers are paying off debt Manufacturing is doing well, exports are up Downside: Housing market is still a mess Government austerity will hurt Skills gap and income inequality Higher energy prices U.S. Outlook and Summary

12. Arizona Economic Overview 12

13. Employment Growth, AZ v. U.S. January 2006 to Present (percent change, year ago) 13 Arizona U.S.

14. 14 AZ Unemployment Rate January 2000 to Present Arizona U.S.

15. 15 Arizona Industries Employment Today Compared to a Year Ago (March to March) Job Added in the Last Year Peak-to-Trough Employment Loss Leisure and Hospitality+10,700-11.5% Healthcare+10,200Never Lost Jobs Professional/Business Services+6,800-18.4% Construction+6,500-57.0% Retail Trade+4,800-18.0% Local Government3,600-18.7% Financial Activities+2,300-14.0% Manufacturing+1,800-21.7%

16. 16 Excess supply of homes – 70,000 in Greater Phoenix alone Home prices down over 50% - to early 2000’s levels Arizona is one of the worst performing states for mortgage delinquencies and foreclosures New home construction has all but ceased Commercial real estate market is hurting Market will not recover until household formation and jobs return On the positive side - housing is now much more affordable, and interest rates are at historic lows Arizona Won’t Truly Recover Until Housing Improves

17. 17 Upside: Economic indicators are finally improving The recovery is now underway AZ’s economy will continue to diversify Downside: Housing market is still a mess Depressed population mobility Budget constraints in public sector AZ Outlook and Summary

18. For MCCCD, the recession is a double-edged sword District needs to look at new revenue streams –Alternative delivery –Contract training, grants, partnerships Focus on high-wage, high-skill jobs to reduce the region’s vulnerability to recessionary cycles –Alleviate skills gap (structural unemployment) –Underserved and emerging populations –Provide training for “disaggregated” jobs Short-term – Slow population and economic growth, little help from state Long-term - Arizona is projected to add 1.8m new jobs in the next 30 years. Many will be in Maricopa County. MCCCD will play a vital role in training Implications for MCCCD 18

19. Questions? john.catapano@domail.maricopa.edu 19