Cochise College CENTER FOR ECONOMIC RESEARCH

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Cochise CollegeCENTER FOR ECONOMIC RESEARCH

• Economic Outlook
• Douglas, AZ

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Are we in a recession yet?
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Gross Domestic Product
Seasonally Adjusted Annual Rate
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Inflation (CPI)
Compared to same month previous year
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The Local Economy

• Is Cochise County in Recession? Douglas?

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Retail Sales Growth
Inflation adjusted compared to same month
previous year
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Retail Sales Recent Activity

• Cochise County retail market has been in
  recession since November 2007
• 2007 -1.3
• Jan-Aug 08 -4.6
• Sales were down in 9 of 10 months from Nov thru
  Aug
• Douglas retail market has been in recession since
  September 2007
• 2007 -0.6
• Jan-Aug 08 -0.8
• Sales were down in 10 of 12 months from Sep thru
  Aug

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Retail Sales Outlook

• Continued slowdown is expected
• Recessionary concerns
• Inflation
• Consumer confidence
• Decline in border crossing activity
• Lower gas prices may help

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Restaurant and Bar Sales Growth
Inflation adjusted compared to same month
previous year
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Restaurant Bar Sales Recent Activity

• Cochise County restaurant bar sales have been
  in recession since October 2007
• 2007 0.1
• Jan-Aug 08 1.4
• Sales were down in 8 of 11 months from Oct thru
  Aug
• Douglas restaurant bar sales have been in
  recession since July 2007
• 2007 -2.9
• Jan-Aug 08 -8.9
• Sales were down in 12 of 14 months from Jul 07
  thru Aug 08

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Restaurant and Bar Sales Outlook

• Continued slowdown expected
• Nonessential spending cut from family budgets
• Recessionary fears encourage families to cut
  spending
• Inflationary pressures force families to cut
  spending
• Lower gas prices may help

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Employment
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Unemployment Rates
Jan-Sep only seasonally adjusted
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Monthly Unemployment
Seasonally Adjusted
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Cochise CountyMonthly Nonfarm Job Growth
Compared to same month previous year
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Cochise CountyNonfarm Job Gains/Losses By
Industry
12 months ending Sep 2008
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Cochise CountyNonfarm Job Growth By Industry
12 months ending Sep 2008
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Employment Outlook

• Continued job losses
• Rising unemployment
• Bright spots
• Douglas ACT Call Center
• Cochise County Fort Huachuca

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Housing, Real Estate, and Commercial Construction
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New Home Construction
Single Family Residential Building Permits
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Recent Permit Activity

• Douglas
• Jan-Sep 08 15 (-53.1)
• Jan-Sep 07 32
• Cochise County
• Jan-May 08 206 (-8.0)
• Jan-May 07 224

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Existing Home Sales (Growth)
Jan-Sep only compared to same period the year
prior
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Existing Home Sales (The Numbers)

• Cochise County

• Douglas

• 2004 1,689
• 2005 1,976 (17.0)
• 2006 1,566 (-20.7)
• 2007 1,406 (-10.2)
• 2008 861 (-22.8)

• 2004 100
• 2005 91 (-9.0)
• 2006 94 (3.3)
• 2007 112 (19.1)
• 2008 78 (-7.1)

Jan-Sep only comparison to same period previous
year
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Median Home Prices
Jan-Sep only
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Median Home Prices/Increases

• Cochise County

• Douglas

• 2004 139,900
• 2005 173,900 (24.3)
• 2006 195,569 (12.5)
• 2007 195,000 (-0.3)
• 2008 188,000 (-3.6)

• 2004 55,000
• 2005 67,000 (21.8)
• 2006 91,000 (35.8)
• 2007 90,000 (-1.1)
• 2008 97,500 (8.3)

Jan-Sep only comparison to previous year-end
figures
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Housing Market Outlook

• Cochise County
• New home market may have bottomed out in 2007
• Existing home market has not yet hit bottom
• Douglas
• New home market has not yet hit bottom
• Existing home market just beginning to decline
• Border Patrol policies of new Administration
• Call center impact

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New Commercial Construction (Douglas)
Jan-Sep 08 1.2 million (-75.4)
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Commercial Construction Outlook

• Recession fears will cause firms to delay new
  projects

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Conclusion

• Nationally
• Recession
• Job losses
• Rising unemployment rate
• Inflation
• Locally
• Slowdown of sales across categories
• Slowed job growth/job losses and rising
  unemployment
• Partial recovery of new home market at county
  level
• Countywide existing home market may hit bottom in
  2008, recover in 2009
• Douglas outlook less certain (Border Patrol and
  call center will play major role)

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