Economic Outlook 2014Robert Carreira, Ph.D.
BISBEE
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-9.0
-7.0
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
2.1
United States Arizona Cochise County
Real GDP Growth (%)
United States Arizona
Cochise County
Pre-Recession High 138.4 mil (Jan 08)
2.69 mil(Oct 07)
39,650(Jun 08)
Recessionary Low 129.7 mil(Feb 10)
2.37 mil (Sep 10)
33,825(Oct 14)
Recessionary Job Losses
-8.7 mil-6.3%
-312,600-11.6%
-5,825-14.7%
Current (Oct 2014) 139.7 mil 2.59 mil 33,825 From High +1.3 million
1.0%-96,400
-3.4%-5,825-14.7%
From Low +10.0 mil7.7%
+216,2009.1%
00.0%
Jobs Needed for 5% Unemployment
1.2 mil 0.8%
54,2202.1%
1,8255.4%
Jobs
Peak Current (Oct 2014)
Change from Peak
Change from Peak (%)
Construction (incl. mining)2,900
(Jun 2006)1,175 -1,725 -59.4%
Manufacturing 925(Oct 2005)
550 -375 -40.5%
Trade, Transportation, and Utilities 7,075(Dec 2006)
5,825 -1,250 -17.7%
Information 675(Aug 2009)
350 -325 -48.1%
Financial Activities 1,150(Jul 2007)
1,025 -125 -10.9%
Professional and Business Services 6,100(Dec 2009)
4,000 -2,100 -34.4%
Educational and Health Services 5,025(Mar 2012)
4,775 -250 -5.0%
Leisure and Hospitality 4,325(Apr 2008)
3,725 -600 -13.9%
Other Services 1,100(Mar 2004)
900 -200 -18.2%
Federal Government 5,975(Jun 2006)
5,175 -800 -13.4%
State and Local Government 7,700(Jun 2008)
6,525 -1,175 -15.3%
Cochise County Jobs by Industry
Pre-Recession
LowRecessionary
HighOne Year
Ago(Oct 2013)
Current(Oct 2014)
United States
4.4%(May 2007)
10.0%(Oct 2009)
7.2% 5.8%
Arizona 3.5%(Jul 2007)
10.8%(Jan 2010)
7.8% 6.8%Cochise County
3.4%(May 2007)
9.4%(Oct 2013)
9.4% 7.9%
Bisbee 6.1%(May 2007)
10.2%(Oct 2013)
10.5% 9.0%
Unemployment
• Upside• State/national economy improvement = tourism• Emerging threats in Middle East = defense
spending
• Downside• Fort Huachuca• Government (federal, state & local)• Population declines
• Overall• Not looking good• Bisbee benefits from state/national recovery
Local Labor Market Outlook
Retail Sales
Bisbee Cochise County Arizona
2014 (Jan-Sep) -5.5% -5.3% 3.0%
2013 -2.3% 1.5% 7.3%
2012 -4.5% 4.5% 2.5%2011 5.6% -1.2% 7.1%2010 1.7% -4.8% -3.1%2009 -6.9% -4.2% -10.7%2008 -0.4% -6.5% -13.1%2007 3.4% -1.3% 4.3%Inflation-adjusted to CPI-U
Restaurant & Bar
Bisbee Cochise County Arizona
2014 (Jan-Sep) 3.3% 2.0% 6.2%
2013 8.3% -0.5% 2.2%
2012 13.6% -4.4% 5.0%2011 -8.8% -0.2% 2.1%2010 2.8% 0.0% 1.8%2009 -6.8% 0.3% -5.4%2008 -0.6% 0.2% -6.2%2007 -4.8% 0.1% -0.2%Inflation-adjusted to CPI-U
Accommodation
Bisbee Cochise County Arizona
2014 (Jan-Sep) 14.9% 0.9% 9.9%
2013 -10.8% -12.2% 0.4%
2012 5.6% -17.2% 1.7%2011 -2.7% -13.1% 2.0%2010 -13.2% 8.3% 0.8%2009 -27.3% -9.0% -16.5%2008 11.1% 1.0% -8.4%2007 20.6% 19.7% 1.4%Inflation-adjusted to CPI-U
• Retail• Struggling in Bisbee & countywide
• Bisbee: Visitors not spending as much / ALCO closure
• Countywide: Fort Huachuca declining activity & uncertainty
• Restaurant & Bar• Bisbee: Tourism• Countywide: Fort Huachuca
• Accommodation• Bisbee: Strong overnight tourism• Countywide: Construction projects, Fort Huachuca
Sales Outlook
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
1,1001,2001,3001,4001,5001,6001,7001,8001,9002,0002,100
50
60
70
80
90
100
110
120
1302,097
1,184
1,428
128
54
104
Cochise County Bisbee
Coch
ise C
ou
nty
Bis
bee
Home Sales (Single-family)
Jan-Sep 2014Cochise County: 1,085 (+4.0%)Bisbee: 67 (-15.6%)
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
*201
4
$50,000
$70,000
$90,000
$110,000
$130,000
$150,000
$170,000
$190,000
$210,000
$90,500
$140,000
$90,000
$139,900
$195,000
$119,000
Bisbee Cochise County
Median Home Price
* Jan-Sep
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
(Jan
-Sep
)0
5
10
15
20
25
30
35
3.5
1.6 1.6 2.9
9.9
13.0
26.4
32.0
18.4
23.1 22.4
1.5 0.91.8
3.8
11.4
14.0
24.7
30.0
26.4
27.626.9
Bisbee Cochise County
Foreclosures (% of sales)
1996
1998
2000
2002
2004
2006
2008
2010
2012
0
200
400
600
800
1,000
1,200
1,4001,265
159
New Home Construction (Cochise County)
• Foreclosures• Upward pressure on sales• Downward pressure on prices• Dampened demand for new construction
• Population declines = downward pressure on new construction
Real Estate & Construction Outlook
• Recession• Kept out of 2008-09 recession by Fort Huachuca• Cochise County recession began in 2011
• Upside• Improving state and national economies will help
tourism
• Downside• Defense/Fort Huachuca• Population declines• Foreclosures
Conclusion