Benson Economic Outlook 2012

GROSS DOMESTIC PRODUCT

I 2004

II III IV I 2005

II III IV I 2006

II III IV I 2007

II III IV I 2008

II III IV I 2009

II III IV I 2010

II III IV I 2011

II III IV I 2012

-10

-8

-6

-4

-2

0

2

4

6Seasonally Adjusted Annual Rate

INFLATION (CPI)

Jan 2007

Mar

May

Jul

Sep

Nov

Jan 2008

Mar

May

Jul

Sep

Nov

Jan 2009

Mar

May

Jul

Sep

Nov

Jan 2010

Mar

May

Jul

Sep

Nov

Jan 2011

Mar

May

Jul

Sep

Nov

Jan 2012

Mar

May

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6% Chart Title

Compared to same month previous year

NATIONAL OUTLOOK

• Continued slow economic growth

• Labor market generally improving

• Short- and long-run inflation threat remains

GDP BY STATE

THE LOCAL ECONOMY

Cochise County & Benson

COCHISE COUNTY RETAIL SALES GROWTH

Jan

20

07

Ma

r

Ma

y

Jul

Se

p

No

v

Jan

20

08

Ma

r

Ma

y

Jul

Se

p

No

v

Jan

20

09

Ma

r

Ma

y

Jul

Se

p

No

v

Jan

20

10

Ma

r

Ma

y

Jul

Se

p

No

v

Jan

20

11

Ma

r

Ma

y

Jul

Se

p

No

v

Jan

20

12

Ma

r

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Inflation adjusted; compared to same month previous year

BENSON RETAIL SALES TAX REVENUE GROWTH

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Jan 2

007

Mar

May

Jul

Sep

Nov

Jan 2

008

Mar

May

Jul

Sep

Nov

Jan 2

009

Mar

May

Jul

Sep

Nov

Jan 2

010

Mar

May

Jul

Sep

Nov

Jan 2

011

Mar

May

Jul

Sep

Nov

Jan 2

012

Mar

Compared to same month previous year; unadjusted

•Cochise County• 2012: 1.3% *• 2011: -1.2%• 2010: -4.8% • 2009: -4.2%• 2008: -6.5%• 2007: -1.3%

•Benson (Retail Sales Tax Revenue)

• 2012: -2.4% *• 2011: -5.6% • 2010: -0.4%• 2009: -4.8%• 2008: 0.6%• 2007: 38.2%

RETAIL SALES RECENT ACTIVITY

* Jan-Apr only; comparison to same period the previous year

RESTAURANT AND BAR SALES GROWTH

Jan 2007

Mar

May

Jul

Sep

Nov

Jan 2008

Mar

May

Jul

Sep

Nov

Jan 2009

Mar

May

Jul

Sep

Nov

Jan 2010

Mar

May

Jul

Sep

Nov

Jan 2011

Mar

May

Jul

Sep

Nov

Jan 2012

Mar

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Cochise County Benson

Inflation adjusted; compared to same month previous year

•Cochise County

• 2012: -3.3% *

• 2011: -0.2%

• 2010: 0.0%

• 2009: 0.3%

• 2008: 0.2%

• 2007: 0.1%

•Benson

• 2012: -9.6% *

• 2011: -11.1%

• 2010: -3.7%

• 2009: 9.1%

• 2008: -0.6%

• 2007: -3.1%

RESTAURANT & BAR SALES RECENT ACTIVITY

* Jan-Apr only; comparison to same period the previous year

ACCOMMODATION SALES GROWTH

Jan 2

007

Mar

May

Jul

Sep

Nov

Jan 2

008

Mar

May

Jul

Sep

Nov

Jan 2

009

Mar

May

Jul

Sep

Nov

Jan 2

010

Mar

May

Jul

Sep

Nov

Jan 2

011

Mar

May

Jul

Sep

Nov

Jan 2

012

Mar

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Cochise County Benson

Inflation adjusted; compared to same month previous year

• Cochise County• 2012: -11.0% *

• 2011: -13.1%

• 2010: 8.3%

• 2009: -9.0%

• 2008: 1.0%

• 2007: 19.7%

• Benson• 2012: -25.6% *• 2011: -6.1% • 2010: 1.0% • 2009: -5.5%

• 2008: -7.5%

• 2007: 17.6%

ACCOMMODATION SALES RECENT ACTIVITY

* Jan-Apr only; comparison to same period the previous year

SALES OUTLOOK

• Modest retail sales growth (countywide); slight decline (city)

• Restaurant and bar and accommodation sales trending downward (city & countywide)

• I-10 construction, gas prices, and potential defense cuts

EMPLOYMENT

UNEMPLOYMENT RATES

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*2%

4%

6%

8%

10%

12%

14%

16%

United States Arizona Cochise County Benson

* Jan-May only; seasonally adjusted

MONTHLY UNEMPLOYMENT RATES

Jan 2011

Feb

Mar

Ap

r

May

Jun

Jul

Au

g

Sep

Oct

No

v

Dec

Jan 2012

Feb

Mar

Ap

r

May

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

United States Arizona Cochise County Benson

Seasonally adjusted

COCHISE COUNTY NONFARM JOB GROWTH

Jan 2008FebM

arA

prM

ayJunJulA

ugS

epO

ctN

ovD

ecJan 2009FebM

arA

prM

ayJunJulA

ugS

epO

ctN

ovD

ecJan 2010FebM

arA

prM

ayJunJulA

ugS

epO

ctN

ovD

ecJan 2011FebM

arA

prM

ayJunJulA

ugS

epO

ctN

ovD

ecJan 2012FebM

arA

prM

ay

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0% Chart TitleCompared to same month previous year

COCHISE COUNTYJOB GAINS/LOSSES BY INDUSTRY

State and Local Government

Construction*

Federal Government

Financial Activities

Manufacturing

Trade, Transportation, and Utilities

Leisure and Hospitality

Other Services

Educational and Health Services

Information

Professional and Business Services

-50 -30 -10 10 30 50 70 90 110 130 150

125

75

75

50

25

25

25

25

0

-25

-25

Chart Title

12 months ended May 2012

* Includes mining

COCHISE COUNTYJOB GROWTH RATE BY INDUSTRY

Financial Activities

Construction*

Manufacturing

Other Services

State and Local Government

Federal Government

Leisure and Hospitality

Trade, Transportation, and Utilities

Educational and Health Services

Professional and Business Services

Information

-10% -5% 0% 5% 10%

5.6%

5.5%

4.8%

2.7%

1.8%

1.3%

0.6%

0.4%

0.0%

-0.5%

-3.8%

Chart Title

12 months ended May 2012

* Includes mining

EMPLOYMENT OUTLOOK

• Local labor market generally improving• Sustained improvement likely through

2012-2013

HOUSING AND REAL ESTATE

NEW HOME CONSTRUCTIONSingle Family Residential Building Permits

2003 2004 2005 2006 2007 2008 2009 2010 20110

200

400

600

800

1,000

1,200

0

20

40

60

80

100

120

Cochise County Benson

Co

ch

ise

Co

un

ty

Be

ns

on

MLS HOME SALES

2004 2005 2006 2007 2008 2009 2010 20111,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

70

80

90

100

110

120

130

140

150

160

Cochise County Benson

Coch

ise C

ount

y

Bens

on

MEDIAN HOME PRICE

2004 2005 2006 2007 2008 2009 2010 2011 2012*$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$139,900

$173,900

$192,569 $195,000

$184,000 $182,500

$173,172

$142,145

$119,000

$80,250

$100,000

$128,950

$160,000

$145,000

$155,000

$125,000

$106,000

$69,000

Cochise County Benson * 1st Quarter only

OUTLOOK• New residential construction picking up

countywide

• Benson new construction down, but above historical levels (pre-2006)

• Boost from foreclosures/lower prices/lower interest rates

• 2012 median price likely to increase from 1st quarter

CONCLUSION• Moving in the right direction, but slowly

• Sales locally continue to struggle, especially hospitality

• Defense spending and I-10 construction

• Labor market improvement will give boost

• Construction and home sales picking up

• Long-term inflation threat