Another good verdict from Economic Outlook
On Thursday, October 11, the Greater Phoenix Chamber hosted Economic Outlook 2020, an annual breakfast featuring economic experts who spoke to the coming peaks and valleys at the global, national, and local economies.
For more than two decades, the Chamber has hosted the most premier economic forecast event in the Valley providing actionable information to approximately 750 business leaders.
This year, the keynote speakers Alexandra Hall Hall, Jim Huntzinger, and Elliott Pollack discussed economic trends that matter to business
As the United Kingdom’s Brexit Counsellor at the British Embassy in Washington, D.C., Alexandra Hall Hall is responsible for spearheading the work of explaining the U.K’s departure from the European Union (EU) to U.S. audiences and promoting a continuing strong U.S.-U.K. relationship post-Brexit.
She set the stage on the status of Brexit and explained the implications of the looming October 31 deadline. In June 2016, the United Kingdom (UK) held a public referendum where voters opted to leave the EU. Since that date, the British government has explored ways to formalize this exit. The stakeholders developed a deal after two years. That deal was voted down three times in the past eight months.
As the Brexit deadline looms, the U.K. government has made it clear that they would prefer to leave with a deal, but they are not opposed to leaving the EU without a deal.
“I’m not 100% sure how it will turn out, but we will get through it, and our system is resilient,” said Hall Hall.
She also shared that the U.K. government is preparing for either option—an exit from the EU with a deal and without the deal. From preparing businesses in the U.K. and hiring trade experts to meet with leaders from other nations, the government is taking steps to be ready to negotiate independent trade agreements.
“The reason I’m here in Arizona is that we are hoping to start free trade negotiations in the U.S.,” said Hall Hall. “And, we’ve realized the real decision making isn’t in Washington, it’s with the constituents across the country. We are beefing up our efforts to understand what is going on in each state. I’m happy to tell you that we’ve identified 12 states that we want to prioritize these efforts, and Arizona is one of them.”
Jim Huntzinger, Executive Vice President and Chief Investment Officer for BOK Financial, set the stage and provided insights on the national economy.
According to Huntzinger, ten years into the recovery, the country is still doing well and producing.
“Jobs, jobs, jobs. [Jobs] will be a critically important aspect of the [continued] recovery, said Huntzinger.
Currently, the underemployment rate is 6.9%, down substantially from its 18% peak during the 2007 recession.
“We have more jobs available than we have people looking for jobs,” said Huntzinger. “As we’ve put more people to work, consumer confidence has risen.”
On the global stage, Huntzinger believes the U.S. economy is poised for success. Currently, U.S. consumers account for 17% of the global GDP, while the U.S. government accounts for 4% of the world GDP.
“The U.S. consumer is a world-class heavyweight when it comes to economic outcomes,” said Huntzinger. “In the U.S., the consumer is 70% of our GDP.”
Another strong indicator that the economy is doing well is that the consumer savings rate is up to 8%—a rate it hasn’t hit in a very long time.
Overall, while things are slowing down, Huntzinger doesn’t foresee a recession in the immediate future.
“[We are] now the longest recovery and slowest recovery in our history,” said Jim Huntzinger. “It has lasted as long as it has because growth has been slow, positive, and stable. It remains that way today.”
Renowned Arizonan economist Elliott Pollack, CEO of Elliott D. Pollack & Co., took attendees to the micro-level of the economy and discussed economic trends specific to Arizona.
“If last year was the 7th inning, where are we this year? It’s not time to panic,” said Pollack. “Could there be a recession? Possibly. Will it look like 2007? Not a chance in the world.”
During his presentation, Pollack hit the high notes of what’s helping economic expansion and the key factors that could limit growth in future years.
What’s supporting growth? Individual consumers are in a good spot with high savings and strong debt to income ratios.
“Consumers are spending less on debt than they have since the 80s,” said Pollack. “Consumers are in great shape.”
In Arizona, Pollack believes things are still looking good—specifically citing the strong jobs numbers and the state’s strong GDP.
“The state is third in job growth. Greater Phoenix is third out of 36 major metropolitan areas for employment growth,” said Pollack.
From construction and health care to business services and education, Pollack highlighted that industries across the board are growing.
He also cited that Arizona’s population growth, while slower than normal, is still above the national average.
Regarding potential economic threats, Pollack believes that slowing population growth should be a long-term concern and that the many unknowns could also impact the economy.
However, overall, Pollack is optimistic about Arizona’s economic health in the future.
Interested in staying in the know on Arizona’s economic trends and business growth? Sign up for the Greater Phoenix Chamber’s Economy in Focus newsletter and attend the Chamber’s bimonthly Economic Development Insider Series events.
The next Economic Development Insider Series event is on Thursday, October 17. Register today!