Emerging Trends: An Arizona economic forecast focused on the ‘boots on the ground’

Business advocacy and what matters in the modern market

The state of economic affairs here in the Phoenix metropolitan area is defined by where you call home in the Valley of the Sun, local experts say.

If you call the east Valley home the name of the game is growth, new buildable land, and how that pent-up demand will shape most if not all decisions. Meanwhile, two major factors playing a definitive role in the west Valley, experts contend, are how will regional transportation tax dollars be implemented and what long-term benefits will sprout along Loop 303.

“Despite the pandemic, Arizona’s economy is strong,” said Todd Sanders, Greater Phoenix Chamber of Commerce president and CEO.

“We are seeing a 4.7% unemployment rate and this legislative session, we will continue to promote policies that will help our economic growth continue.”

Arizona’s economy is a collection of facts of figures when you boil it down to the essential elements, Sanders says.

“At the Greater Phoenix Chamber, the majority of our members are businesses located within Maricopa County,” he said. “However, when we think about the local economy, the work we do in public policy, economic development, and workforce development make an impact on the economy of the entire state of Arizona.”

According to George W. Hammond, Ph.D., director, and research professor at the University of Arizona Eller College Economic Business & Research Center, the economic prospectus for Arizona is optimistic.

“The baseline forecast calls for U.S. real to rise by 5.4% in 2021, 4.3% in 2022, and then decelerate to 2.8% and 2.7% in 2023 and 2024, respectively,” he said in his fourth-quarter economic forecast published Nov. 30 of last year.

“The unemployment rate peaked at 8.1% for the year in 2020. It is forecast to decline to 5.5% in 2021 and 4.1% in 2022. Inflation gathers momentum during the near term, with an average price increase of 4.3% in 2021 followed by a rapid deceleration to 3.0% in 2022, and 2.1% in 2023. Inflation moderates as supply-chain issues ease and workers return to the labor force.”

In his economic forecast, Dr. Hammond predicts Arizona’s job recovery to persist into the new year.

“After losing 93,200 jobs in 2020 the state is forecast to add 105,700 jobs in 2021 and 127,200 in 2022,” he said, in part. “Population gains accelerate through 2022, as Arizona attracts remote workers from high-cost western metropolitan areas, before gradually decelerating as demographic pressures come to the fore.”

In summary, Dr. Hammond outlines in his recently published forecast, while Arizona “hit pause” on job recovery as the omicron variant surged employment numbers are nearly at pre-pandemic highs.

Boots on the ground

When talking advocacy for those a part of the day-to-day workforce there is no other entity quite like a chamber of commerce, Sanders says.

“We actively advocate for structurally balanced budgets both with the state legislature and Phoenix City Council, as well as business-friendly legislation that enables companies to develop and hire a qualified workforce,” he said.

“The success of our business community translates to a strong economy.”
But it takes a village, Sanders contends.

“Data is key for businesses to make informed decisions to promote growth, and the chamber has many resources available so our members and the community can easily access data,” he said.

“Our economic dashboard, available at phoenixchamber.com/dashboard, monitors the health of our economy by tracking sales tax revenue, the unemployment rate, and COVID-19 cases. The dashboard also provides a deeper dive into data in the health care sector, economic metrics, real estate, and workforce trends.”

Two economic issues echoing throughout chamber hallways?

“Transportation and infrastructure — those will be major areas of focus for our chamber,” Sanders said.

“Additionally, workforce and education are also priorities that make a huge impact on the local economy. Even prior to the pandemic, employers were expressing concerns over talent pipeline issues, and the Chamber has been working diligently on innovative solutions to help lessen those gaps. We work directly with our businesses, along with post-secondary education institutions and higher education to ensure that our students are prepared for college and career, and to ensure positive systemic change that will ultimately strengthen the state’s economy.”

 

Business in uncertain times: Pictures above provide some insight
to the day-to-day stressors all of Arizonans are dealing with amid trying to make a living.

On the legislative front, Sanders outlines the ongoing tug-of-war between competing interests for countywide transit and transportation funds matriculating through lawmaker chambers.

“One of our top priorities this legislative session will be the continuation of Prop. 400, the Maricopa County Regional Transportation Plan; we will be advocating that the legislature ensures that Prop 400 makes its way onto the ballot for the 2022 election so that voters have the opportunity to weigh in on this,” he said.

“We will also monitoring legislation dealing with budget and taxation to ensure that Arizona remains competitive with other states while still having the resources to invest in critical areas of need.”

‘A loaded question’

Robert Heidt, Glendale Chamber of Commerce president and CEO, says the health of the local economy can be “a loaded question,” depending on who you ask.

“Overall, people are certainly at wits’ end with COVID and its variants and everything we have all had to deal with over the past two years,” he said candidly.

“I think the biggest thing for our members is trying to find that new pattern and figure out how they continue to navigate forward. They love the fact that there is growth in our local economic development here in Glendale and we have the Super Bowl coming next year. So, honestly, it depends on who you ask.”

At the local level, Heidt reminds, the economy is the people of any community — and the city of Glendale is no exception.

“I think it is everything that we know, the local economy is the community itself. It is the people who make up this community, regionally, and the metropolitan area,” he said. “For us, the chamber, we are generally thought of as a nucleus.”

 

West Valley Boom: Pictures above provide a glimpse into
a small fraction of all that is happening in the West Valley — with Glendale being no exception.

A shoe-leather approach to business advocacy is how Heidt keeps his finger on the pulse of the local business community.

“The best way for me to monitor is to actually go out and talk to businesses and get their take on it,” he explained. “As you talk to those different operators you learn some very specific data points. Numbers are numbers and that drives decisions for us in many ways, but I believe the No. 1 asset we have in our local economy is our human capital.”

For the membership of the Glendale Chamber of Commerce, Prop. 400 — a voter-approved sales tax levy meant for countywide allocations of transportation infrastructure — is a pivotal talking point.

“A big concern is the next iteration of Prop. 400,” Heidt said in a Jan. 4 phone interview. “We just hosted a transportation forum where he had all our legislators participate. Transportation is a huge issue. We work closely with our lobbyist, Fennemore Craig, P.C., and every Monday we go through and talk about all legislative issues happening at the capitol.”

The crux of the transportation concerns in Glendale? Heidt says it is an equitable allocation of those voter-approved dollars to improve Glendale’s roads and streets.

“I think it really comes down to the perception of Glendale getting its fair share, would certainly be one attribute,” he pointed out.

However, Loop 303 and the economic development on its heels — major brand industrial and warehouse operations — has parts of the community feeling natural growing pains.

“Where will all of these trucks go?” Heidt says of typical comment around new delivery businesses coming online locally up and down the highway. “Loop 303 doesn’t just touch Glendale. This is a new regional development, but no one wants a truck stop in their backyard. These are natural growing pains, as we continue to move forward.”

COVID-19 and vaccination status

As the calendar turns 2022, Sanders at the Phoenix-based chamber, says a key focus of this year’s street-level advocacy is employer protections.

“Employer protections in light of the pandemic is another key issue for the chamber,” he said of the issue with myriad ramifications for local proprietors.”

“From the onset of the pandemic, Arizona businesses have stepped up in a big way in order to stay open, and keep their workers employed and their customers safe,” he explained.

“Employer freedom will be critical to keep the economy moving forward; health and safety recommendations are changing frequently and business leaders need the flexibility to pivot and make the best decisions for their businesses and employees, without the burden of government mandates.”

And as in the previous 12 months, the upcoming year will continue to be defined, on an economic level, Sanders says on the status of vaccination requirements.

“Vaccinations will be an ongoing issue into this year, and overwhelmingly we have seen the business community promote vaccines as the primary way to prevent the spread of COVID-19,” he said.

“The chamber stands in opposition of government mandates on businesses, and we will remain focused on promoting the importance of vaccines and implementing health and safety protocols as a means to keeping Arizonans safe.”