1. Sierra Vista Economic Outlook 2013

2. National Economy  Sequestration

3. Arizona Economy

4. Local Economy Sierra Vista & Cochise County

5. Retail Sales Growth Inflation adjusted; compared to same month previous year

6. Retail Sales Cochise CountySierra Vista 2013*6.4%4.5% 20124.5%-1.0% 2011-1.2%-5.5% 2010-4.8%-1.1% 2009-4.2%-1.4% 2008-6.5%-6.6% 2007-1.3%2.6% Inflation-adjusted to CPI-U * January only; comparison to same period the previous year

7. Restaurant and Bar Sales Growth Inflation adjusted; compared to same month previous year

8. Restaurant and Bar Sales Cochise CountySierra Vista 2013*-6.7%-14.6% 2012-4.4%-9.5% 2011-0.2%2.8% 20100.0%3.1% 20090.3%2.1% 20080.2%-2.0% 20070.1%2.9% Inflation-adjusted to CPI-U * January only; comparison to same period the previous year

9. Accommodation Sales Growth Inflation adjusted; compared to same month previous year

10. Accommodation Sales Cochise CountySierra Vista 2013*-22.4%-40.2% 2012-17.2%-28.2% 2011-13.1%-10.1% 20108.3%11.0% 2009-9.0%-2.0% 20081.0%19.4% 200719.7%21.1% Inflation-adjusted to CPI-U * January only; comparison to same period the previous year

11. Sales Outlook  Retail on rebound but sequestration & general defense cuts threaten to derail  Hospitality will continue to struggle, particularly accommodation  Construction of new hospital will help all industries (net effect = new hospital – defense cuts)

12. Unemployment * Jan-Feb only; seasonally adjusted

13. Unemployment (Monthly)

14. Nonfarm Job Growth (Cochise County) Compared to same month previous year

15. Job Gains/Losses (Cochise County) 12 months ended Feb 2013

16. Job Gains/Losses % (Cochise County) 12 months ended Feb 2013

17. Employment Outlook  Net effect = new hospital – defense cuts

18. New Residential Construction SFR Permits

19. Home Sales MLS (site-built only)

20. Home Prices Median Price (site-built only)

21. New Commercial Construction

22. Outlook  New residential construction stalled due to competition from foreclosures  Existing home sales volume given boost from foreclosures/lower prices  New hospital

23. Conclusion  National economy hampered by fiscal woes/sequestration  State economy improving  Local Economy  Sequestration/defense budget cuts  New hospital  Net effect