Steady, improving employment numbers at both the local and national levels are the highlight of an ongoing, eight-year economic recovery, which saw unemployment as high as 10 percent. With unemployment hovering around 5 percent now, top Valley economists say this is likely “as good as it’s going to get” recovery-wise for the foreseeable future.
Economists Elliott Pollack of Elliott D. Pollack & Company, Jim Huntzinger, executive vice president and chief investment officer of BOK Financial and Economics Correspondent Andrew Walker of BBC World Service shared their assessments of the state, local and international economies during the Economic Outlook 2017 event Oct. 11 presented by the Greater Phoenix Chamber of Commerce (GPCC) and Cox Communications at the Arizona Biltmore, A Waldorf-Astoria Resort.
Pollack discussed the overall improvement in several areas of the Arizona economy, just not at the historic rates to which the state became accustomed. Employment and housing are both growing, albeit slowly.
“This is as good as it’s going to get. Normally at this point in the recovery cycle, unemployment is at about 3.5 percent. Right now, here it’s in the high fives. This is the boom for this economy,” he said.
He expects growth in the leisure, hospitality, professional business services, construction, health care and education fields. His major concern is losing high-wage manufacturing jobs to lower-paying replacement jobs.
To sustain the state’s modest growth, the business community and policy makers must work together to promote Arizona.
“The important thing for Phoenix is to make itself look as pretty and competitive as possible in terms of tax structure, bureaucracy and trade…we have a lot of competition out there,” he said.
Jim Huntzinger said the strongest aspect of the national economy is employment, where the high of 10 percent unemployment has been whittled down to about 5 percent. He describes weak capital spending by large corporations as a “wet blanket on the economy.”
During the next year, Huntzinger forecasts slow, continued improvement.
“The economy is doing OK but not great. We’re just muddling through,” Huntzinger said. “The growth rate is between 1.5 and 2 percent, it’s not great, but we’ve been doing it now consistently for the past eight years. The early warning signals of a recession aren’t forming yet.”
U.K.-based BBC World Service Economic Correspondent Andrew Walker provided an insider’s view of BREXIT, the historic vote earlier this year by Britons to leave the European Union. Since the U.K. hasn’t actually left yet, many of the real effects of the decision are not yet realized, leaving a vast amount of uncertainty and upheaval among the elected officials charged with seeing it through to the business community forced to reckon with it.
The main concern for U.S.-based firms, particularly banks, is loss of existing business associates in EU countries. Some Britons fear the loss in trade opportunities, while others characterize BREXIT as an opportunity for Britain to expand greatly its trade footprint.
“Some worry we might have significantly reduced trade access to the rest of the European Union, resulting in weaker economic growth in Britain” he said. “Others, especially those in the new government, see this as an opportunity for us to become a more globally focused trading nation.”
Walker added that the BREXIT decision is stressful for nearly all other EU-member country leaders, since some may now be emboldened to also try and steer their countries out of the agreement.
“There are political forces in many EU countries, perhaps most, that want to do what Britain has done,” he said. “There is a real anxiety amongst political leaders.”
GPCC President & CEO Todd Sanders highlighted some of the successes and goals of Phoenix Forward, the Chamber’s collaborative initiative with the Arizona Commerce Authority, Maricopa County and the City of Phoenix.
This year, Phoenix Forward will focus on developing a regional business retention and expansion plan; building relationships within the region; enhancing workforce development strategies and increasing data collection and analysis efforts.
Sanders shared, “In spring 2017, with the help of University of Phoenix College of Health Professionals, Phoenix Forward will release a full report on the deep dive we took into understanding the current status and workforce needs of health care, one of the Valley’s most rapidly growing industries.”
“Our reasoning for conducting this research is simple – to use the information from this report strategically to strengthen health care activity in Phoenix,” Sanders said. “By 2022, nearly 1 in 8 U.S. jobs is projected to be in health care.”
About the Greater Phoenix Chamber of Commerce
Representing 2,400 businesses across Metropolitan Phoenix, the Greater Phoenix Chamber of Commerce is Arizona’s largest Chamber. The Chamber supports the growth and development of business by offering networking and marketing opportunities, money-saving programs and a voice in government, keeping its members informed, connected and prosperous. The Chamber also enhances members’ success by promoting economic development, entrepreneurship and a connection to the community.