Tag Archives: jpmorgan chase

Broome

Broome taking part in Global Cities Initiative

As part of the Global Cities Initiative, a joint project of Brookings and JPMorgan Chase, the Greater Phoenix Economic Council president and CEO Barry Broome, will join various business and elected leaders for a discussion on the development of a metropolitan export strategy.

“The mayors and business leaders from the region have led in the transformation of our economy” said Broome. “Developing a metropolitan export strategy through the Global Cities Initiative is a critical step toward ensuring our economic future.”

The forum, Going Global: Boosting Greater Phoenix’s Economic Future, taking place today at ASU Cronkite School of Journalism and Mass Communication, will feature many speakers, including Phoenix Mayor Greg Stanton, former U.S. Secretary of Commerce William M. Daly, Brookings Metropolitan Policy Program co-directors Bruce Katz and Amy Liu, and Chase market manager for Arizona and Nevada Curtis Reed, Jr.

The half-day event will center on preliminary market assessment findings on how the Greater Phoenix region can better position its global competitiveness. The city of Phoenix is part of a network of regions across the nation participating in the Global Cities Initiative’s Exchange to help develop global engagement strategies

Closing out the forum, U.S. Commerce Secretary Penny Pritzker will join the program via satellite to make an announcement regarding the National Export Initiative.

The event will begin at 9:30 a.m. and conclude at 12:15 p.m.

microchip technology

Phoenix Joins Initiative to Promote Global Trade

The Greater Phoenix Economic Council announced the region has been selected as one of eight metro areas in the country to join a new exchange network created by the Global Cities Initiative, a joint project of Brookings and JPMorgan Chase. The Exchange is a network of metropolitan areas committed to promoting greater global trade and economic competitiveness. As part of the inaugural Exchange, Greater Phoenix will be required to design and implement a regional export plan in 2014.

In Greater Phoenix, the Global Cities Initiative will be led City of Phoenix Mayor Greg Stanton and a core leadership team including the following representatives:

> Joe Stewart, market manager – AZ & NV Middle Market, Chase
> Dennis Hoffman, professor and director, L. William Seidman Research Institute at the
W. P. Carey School of Business at Arizona State University
> Barry Broome, president and CEO Greater Phoenix Economic Council

“A strong trade and export strategy is critical to our region’s economic vitality, so I’m honored to lead this initiative for Greater Phoenix,” Mayor Stanton said. “I look forward to working with my fellow mayors and business and community leaders to build a regional export plan that capitalizes on our unique assets and advances a stronger and healthier economic platform by expanding our global trade and investment strategies.”

Other participating groups include the Arizona Export District Council, Canada-Arizona Business Council, Intel and the Arizona Commerce Authority.

Brookings selected metropolitan areas to join the network after an extensive application process that evaluated regions’ readiness and capability to pursue the Exchange’s curriculum and commitment to fulfill its goals. Greater Phoenix joins Atlanta; Greenville, S.C.; Indianapolis; Jacksonville, Fla.; Milwaukee; Phoenix; Sacramento, Calif.; and Wichita, Kan., in the Exchange’s inaugural class, which will work together over the next four years to establish new metro-to-metro relationships and to share best practices in global economic development.

“For the Exchange, we selected metro areas that are committed to expanding their global economic reach by working together to identify regional competitive strengths and increase exports,” said Brad McDearman, Brookings fellow. “The eight metro areas selected for this round represent a growing group of U.S. metro areas that understand the need to embrace the global market to remain competitive in the 21st century economy.”

Over time, the network will expand to include additional U.S. and international cities working together to strengthen their local economies through increased engagement with the rest of the world. This builds on the Global Cities Initiative’s work, which equips metropolitan leaders with the information, policy ideas, and global connections they need to bolster their regions’ positions in the global economy.

“I’m delighted Greater Phoenix will be a part of this new network – it’s exactly the kind of innovative planning that is needed to ensure our community’s long-term economic success,” said Joe Stewart, market manager – AZ & NV Middle Market, Chase. “We have a long history of helping businesses connect to global markets and now the Exchange brings additional resources to help our region’s leaders design strategies to further create jobs and grow our economy through greater global engagement.”

The Global Cities Initiative supports the region’s existing efforts to implement the Brookings Metropolitan Business Plan (MBP), where business, university, political and civic leaders have adopted several core strategies to leverage  the region’s assets in a way that secures economic strength for Greater Phoenix through the 21st century. The Global Cities Initiative will serve to fulfill the MBP’s global export and foreign direct investment strategy. Further details about the MBP will be announced in early 2014.

“It’s fantastic that Greater Phoenix is participating in this initiative – a reflection of our unified commitment to attract and retain export-based businesses that are ultimately responsible for regional economic growth and prosperity,” said Dennis Hoffman, professor and director, L. William Seidman Research Institute at the W. P. Carey School of Business at ASU. “A strong research university is an important attractor for businesses seeking talent and knowledge capital that can help them succeed in global markets, and I am pleased to represent ASU in this initiative.”

Metro area leaders play a critical role in promoting trade and developing infrastructure. Regional economic development leaders representing both the public and private sectors can help local firms access new markets and align existing export services because they know their regions best. These leaders are also best equipped to coordinate regional assets—such as skills training, innovation capacities, and freight and logistics—to better support global trade.

“In Greater Phoenix, we are already making exports and foreign direct investment a central and consistent part of our broader regional economic development strategy. Adding this partnership with the Global Cities Initiative will only strengthen our results,” said Barry Broome, president and CEO of the Greater Phoenix Economic Council. “I look forward to the collaboration involved – not only within our own regional leadership but also with the other participating metro areas – to advance and diversify our region’s economy and solidify our future prosperity.”

In December, the Greater Phoenix Exchange team will join those of the other accepted metropolitan areas at Brookings in Washington to participate in their first working group session, where they will learn how to develop an export plan as part of a global economic development strategy. Throughout the four-year Exchange, participating metros will periodically convene for in-person working groups and will continually engage in curriculum via conference calls and webinars.

Coinciding with the work of the Exchange, Greater Phoenix will host a forum in 2014, bringing together regional and national experts on trade. Greater Phoenix is the only metro participating in the Global Cities Initiative to host such a forum. Its proximity to Mexico and trade relationships position the region as the ideal host of a conversation on global trade and exports.

economy

Arizona Could Hit Full Economic Recovery in 3 Years

We’re finally on the path to full economic recovery, and Arizona may get there in about three years. That’s the main message from experts who spoke today at the 49th Annual Economic Forecast Luncheon co-sponsored by Arizona State University’s W. P. Carey School of Business and JPMorgan Chase.

About 1,000 people attended the event at the Phoenix Convention Center, where economists painted a generally brighter picture for 2013.

“As of September, Arizona ranked fifth among states for job growth, and the Phoenix area was fourth among large metropolitan areas,” said Research Professor Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business. “Arizona is expected to add 60,000 jobs in 2013, led by professional and business services, retail, hospitality and health care. We should finally dip below 8-percent unemployment in 2013 — down to 7.6 percent.”

McPheters added, as long as the national economy doesn’t drag us down, Arizona may see 2.5-percent growth in its employment rate next year. The state had 2-percent growth this year. Despite the jump, Arizona has gained back less than a third of the jobs it lost during the recession. McPheters believes it will take another three years to return to pre-recession employment levels.

In 2013, McPheters expects improved 5-percent growth in personal income, up from just 4 percent this year. He projects retail sales will go up 6 percent, from 5 percent this year. He expects Arizona’s population to rise 1.5 percent, and he believes single-family housing permits will shoot up a whopping 50 percent, with the local housing market now on the mend.

Both McPheters and Beth Ann Bovino, deputy chief economist at Standard & Poor’s, hinged their forecasts on whether the national economy can really pull forward; otherwise, Arizona will go down, too. The biggest question out there is whether Congress can avoid the “fiscal cliff” – where automatic spending cuts would kick in, just as various tax cuts expire. Bovino says that could plunge the United States back into recession and push national unemployment back above 9 percent by the end of the year.

“If we can avoid the fiscal cliff, then it looks like the economy could finally be in a self-sustaining recovery,” said Bovino. “We expect this year’s gross domestic product (GDP) to hit 2.1 percent, stronger than previously projected. For 2013, we’re looking at about 2.3 percent. Reports also show a stronger jobs market and signs that households are willing to buy big items, such as cars and homes.”

Bovino adds the U.S. unemployment rate was at 7.9 percent in October, and she sees signs more people are joining the workforce and getting jobs. However, she says the labor participation rate is still near a 30-year low, meaning more people will still be coming back to the workforce to look for jobs, keeping the unemployment rate low for a quite a while. Despite this, Bovino expects the national unemployment rate to drop to 7.6 percent next year.

She also has a good outlook for the national housing market, with housing starts already up 45 percent this September over last September. Bovino referenced a report that 1.3 million homes rose above water – with the value going higher than what was owed – in the first half of this year alone. She expects residential construction to go up almost 19 percent in 2013.

In the financial sector, Anthony Chan, chief economist for private wealth management at JPMorgan Chase & Co., says corporations remain flush with cash. They’re waiting for some clarity on where the market will go as a result of the fiscal-cliff situation and other factors.

“U.S. corporations are reluctant to go through global mergers and acquisitions or make big investments until they have a clearer picture,” said Chan. “Corporations are keeping high cash balances, in order to deal with the uncertainty. They’re making near-record profits in some cases, and many values on the stock market look good. However, everyone’s waiting to see what will happen.”

He said high-yield investments, such as bonds, and gold remain relatively attractive. The U.S. dollar keeps falling against currencies from emerging markets, as monetary agencies work through different strategies of dealing with the rough economy.

In the local housing market, Elliott D. Pollack, chief executive officer of Scottsdale-based economic and real estate consulting firm Elliott D. Pollack and Company, also drew some conclusions.

“Even though about 40 percent of Arizona homeowners are underwater on their mortgages, we’re starting to see a recovery,” said Pollack. “The single-family-home and apartment markets look great. Industrial real estate has improved quite a bit. Only office and retail have quite a way to go.”

Pollack adds new residential foreclosure notices are down almost 70 percent from the peak in 2008. Phoenix-area home prices are up more than 35 percent over last year. New-home sales are also doing well, with 67 percent of the local subdivisions active today projected to be sold out in less than a year. Builders are going to have to work to meet the demand, with less land and labor available.

Pollack sees a strong rental presence, with about 22 percent of local single-family homes being used as rentals right now. That’s up from less than 12 percent just a decade ago. Landlords appear to be buying up many single-family homes, and more people are moving to the area.

“In the absence of a fiscal cliff, things should continue to improve over the next several years,” said Pollack. “By 2015, things should be normalized. As I like to say, we’re only one decent population-flow year away from the issue being resolved.”

More details and analysis from the event, including the presentation slides, are available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com.

economy

2013 Economic Forecasts for U.S. & Arizona

Arizona’s economy improved somewhat this year, but what can we expect in 2013? Top experts on the U.S. and Arizona economies will deliver their forecasts for the state, nation, stock market and housing market at the Valley’s largest and most trusted economic-forecasting event on Dec. 5.

The 49th Annual Economic Forecast Luncheon is co-sponsored by the Department of Economics at Arizona State University’s W. P. Carey School of Business and JPMorgan Chase. About 1,000 people are expected to attend the event at the Phoenix Convention Center.

“Arizona’s economic forecasters are patting themselves on the back, since their projections made a year ago appear to be accurate for 2012; the state seems certain to record about 2-percent job growth, and we are seeing the beginning of a housing comeback,” says Research Professor Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business. “However, 2013 is a different story. A huge cloud of uncertainty is caused, not only by questions about what the next Congress will do, but also about how the overall U.S. economy will react to recession in Europe and slower growth in China. Though the national economy always has some impact on Arizona, until housing and population growth really pick up, the state seems destined to closely follow the national business cycle. If the U.S. economy contracts, then Arizona’s economy will, too. That’s the major risk we’re watching.”

Presentations will include forecasts on:

* Arizona and the regional economy from McPheters, who is also editor of the prestigious Arizona and Western Blue Chip Economic Forecast publications.
* The U.S. economy from Beth Ann Bovino, deputy chief economist at Standard & Poor’s, a widely quoted media expert with two decades of financial experience, including a position at the Federal Reserve.
* The financial sector from Anthony Chan, chief economist for private wealth management at JPMorgan Chase & Co., who served as an economist at the Federal Reserve Bank of New York, appears monthly on CNBC and is a member of the Reuters, Bloomberg and Dow Jones weekly economic indicator panels.
* Real estate and construction from Elliott D. Pollack, chief executive officer of Elliott D. Pollack and Company, a highly regarded Scottsdale-based economic and real estate consulting firm.

The 49th Annual Economic Forecast Luncheon will be held in the Phoenix Convention Center’s West Ballroom on Wednesday, Dec. 5 from 11:15 a.m. to 1:30 p.m. Admission is $90 per person. Proceeds are used to support student scholarships, faculty research, and other academic and professional activities in the Department of Economics at the W. P. Carey School of Business.

For more information, including registration details, go to www.wpcarey.asu.edu/efl or call (480) 965-3531.

deal

ASU program helps leaders of small businesses

The fifth annual Small Business Leadership Academy at the W. P. Carey School of Business at ASU helps small business owners and executives learn how to improve efficiency, streamline operations and raise profits.

“Classes are held just one night per week, so they fit right into busy executives’ schedules,” said Dawn Feldman, executive director of the W. P. Carey School of Business Center for Executive and Professional Development, which hosts the program. “Participants not only take away great business knowledge, but also a new support network of peers that will exist long after the program is over.”

Salt River Project (SRP), the program’s founding co-sponsor, offers a number of scholarships to its current suppliers and small business customers.

“The academy offers an outstanding opportunity for small business owners to gain knowledge from highly acclaimed professors and establish lasting relationships with other community small business owners,” said Carrie Young, senior director, corporate operations services for SRP. “The partnership we have with ASU, coupled with the sponsorship and scholarships we offer to the academy, is a natural fit for SRP in supporting economic development within our own community.”

As part of a larger partnership with ASU focused on small business support, JPMorgan Chase is also a top sponsor, providing 15 scholarships to the academy.

“As Arizona’s number one SBA lender, we know how important small businesses are to our economy,” said Joe Stewart, chairman and CEO of JPMorgan Chase in Arizona.

Participants must come from companies that have been in business for at least three years; have annual revenues between $1 million and $10 million; and have fewer than 100 employees.

For more information, call (480) 965-7579, e-mail wpcarey.execed@asu.edu or visit wpcarey.asu.edu/sbla.

recovery sign

ASU Experts: Economy Rebounds, But Is Still Years From Full Recovery

Despite positive growth, full economic recovery is still two years away for the nation and at least three years away for Arizona. That message was delivered today by top economists from the W. P. Carey School of Business at Arizona State University. The experts spoke at the annual Economic Outlook Luncheon sponsored by the Economic Club of Phoenix.

“Arizona lost 314,000 jobs during the recession, and we’ve only added back around 25 percent of those,” explained Research Professor Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business. “We’ll probably pick up about 48,000 jobs this year in the state, but it will be three to four years until we can expect to see full recovery.”

McPheters says Phoenix is on its way to a significant rebound, having ranked No. 4 among the nation’s large cities for total job growth from March 2011 to March 2012. Arizona is already back to its position as a Top 10 job-growth state, ranking No. 8 for the same time period. Health care and hospitality are two of the fields doing relatively well in the recovery here.

“Arizona’s recovery will be slow, but it appears sustainable as long as the U.S. economy stays on track,” said McPheters. “Businesses should plan now for long-term improvement.”

Nationally, McPheters says the country has already gained back 40 percent of the 8.9 million jobs it lost during the recession.

However, Robert Mittelstaedt, dean and professor of management at the W. P. Carey School of Business, said, “Many experts are still looking at the national-debt situation as an issue. April was the first time since September 2008 that we’ve had a monthly surplus, and that is not likely to be repeated anytime soon.”

Mittelstaedt points out that the recent peak for the U.S. deficit was 10.1 percent, which happened in 2009. The last time the national debt was at that level or worse was all the way back in 1945.

Professor Dennis Hoffman, director of the L. William Seidman Research Institute at the W. P. Carey School, gave an analysis of the state’s budget situation. He says taxes on individuals are relatively low in Arizona, and the public pensions are generally solvent. Also, the recent upswing in the economy has helped provide some stabilization for incoming state revenue, even though tax collections as a share of income have continued to fall for years. However, the current clarity in the fiscal picture will start to get cloudy again.

“Next year, the temporary sales tax will expire, and within five years, the Arizona corporate income-tax rate will be about 30 percent lower than it is today,” explained Hoffman. “This presents some fiscal challenges that will have to be managed.”

As for the housing market, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School, delivered some good news for hard-hit homeowners.

He said, “Home prices are on the rise in the Phoenix area, and we expect that trend to continue.”

The median single-family home price already went up more than 20 percent from March 2011 to March 2012. The bounce was from $112,000 last March to $134,900 this March.

“Most homes under $250,000 are attracting multiple offers within a couple of days, and there are far more buyers than sellers,” said Orr. “We’ve also seen a big shift in the types of transactions in the market from a focus on lender-owned home sales to a rise in normal resales, new-home sales, investor flips and short sales.”

The number of foreclosures completed this March was down a whopping 60 percent from last March. Also, the number of delinquencies on loans – those who are behind on payments, but not in foreclosure – is down 51 percent. All of this means the supply of lower-priced homes in the area is down to less than a month’s worth of inventory, and new-home construction is cranking up to try to help meet the demand.

Today’s Economic Outlook Luncheon was held at the Westin Kierland Resort & Spa in Scottsdale. The Economic Club of Phoenix hosts the Economic Outlook Luncheon every spring, as one of its opportunities for Valley business leaders and others to network and engage. The club was founded by a group of prominent business executives called the Dean’s Council of 100, in conjunction with the W. P. Carey School of Business. More information about the club can be found at wpcarey.asu.edu/ecp.

Arizona Centennial Series - AZ Business Magazine January/February 2012

Arizona Centennial Series: Looking Ahead At The State’s Next Century

Arizona Centennial — Forward thinking: Algae, solar, personalized medicine or none of the above? Some of Arizona’s greatest minds look ahead at the state’s next century

A century ago, Arizonans with an entrepreneurial spirit ventured deep into the deserts and mountains in search of gold and copper. Today, as Arizona celebrates its 100th birthday, their counterparts are exploring the unknown frontiers of biotechnology and renewable energy.

“Imagine the technologies of 100 years ago,” says Steven Zylstra, president and CEO of the Arizona Technology Council. “Now, think about how far we have come. Only a very few science fiction writers even envisioned the technologies that are now a part of our everyday lives. It is very likely that (100 years from now), the mix of industries and companies will be very different. There will be subsectors that don’t even exist yet. One thing is sure, there will be more technology than ever to drive our economy and improve our quality of life.”

So with 100 years in the history books, what’s in store for Arizona’s next century? One expert says algae will be Arizona’s 21st-century gold rush. Will Arizona’s yet-to-be-written history prove him to be right?

As part of the Arizona Centennial Series, Arizona Business Magazine asks some of the state’s greatest minds how they see Arizona taking shape over the next decade and beyond.


Economy

Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business at Arizona State University

The next 5 years will be a period of agonizingly slow recovery from the Great Recession. Arizona employment will return to post-recession levels within two to three years, but new, more frugal spending habits will put a damper on growth. The next 25 years has the potential to be a period of strong growth. Under historical growth assumptions, Arizona’s population will almost double within 25 years, as the state grows to more than 10 million residents.  Phoenix will have a population between 7 and 8 million, larger than the entire state today.  Immigration will exceed 125,000 every year by 2030.  Over the next 25 years, to accommodate growth, more than 1 million single-family homes will be needed, a seemingly impossible pace of building compared to conditions today.In the next 100 years, the gap between those with education, training and skills and those without will grow even greater as technology will benefit those who develop, control and use it.

Lee Vikre, senior vice president, organizational development and consulting, BestCompaniesAZ, LLC

In the next 10 years, the Arizona workforce will be more diverse than ever before, with wide spans in age ranges of workers and greater cultural diversity. White males may become the minority. Entrepreneurship will be ingrained in workers of all ages who were affected by the recession. This entrepreneurial, independent atmosphere will continue to define Arizona. Homegrown, innovative businesses in the fields of technology, manufacturing, healthcare, and sustainable energy will prosper. The movement towards creating great workplaces will move from a novelty to mainstream as both workers and management discover the competitive advantage of a culture of trust.

Patricia Ternes, financial advisor, RBC Wealth Management, Scottsdale

For the next 100 years, we need to address the concept that the world is flat.  Right now, we have multiple currencies and multiple stock markets. The financial services industry needs to better integrate the products and services we offer our clients worldwide. In 100 years, there will probably be huge, world-wide investment markets that are available to everyone 24/7.  This will increase the complexity of planning one’s financial future.


Technology

Steven Zylstra, president and CEO, Arizona Technology Council

In the next 10 years, the biosciences and renewable energy (and even the broader clean tech) sectors will become significant components of our economy.  Aerospace and defense, semiconductor and electronics, ITC, and optics will continue to grow.  The technology sector will be an ever-increasing component of our economic landscape, leading to more diversity.

Mark Edwards, PhD., vice president of corporate development and marketing, Algae Biosciences, Inc., Scottsdale

Arizona has the critical elements for algae production including lots of sunshine, waste and brine water for nutrients, CO2, and cheap land.  The state has a competitive advantage for algae production and will become the algae capital world. Arizona will go from two firms producing algae in 2011 to 200 algae firms in 2020. Arizona producers will cultivate algae for food, feed, fertilizers, pharmaceuticals, cosmeceuticals, nutraceuticals, functional foods, medicines and advance compounds. In the next 100 years, Algae will become the leading industry in Arizona, eclipsing tourism; more than 80 percent of all medicines, vaccines and pharmaceuticals will be made predominately from advanced compounds derived from algae; our fossil-based transportation system will transform to a sustainable algae-based transportation system.

Steve Sanghi, president and CEO, Microchip Technology Inc., Chandler

Given this expansion and the number of semiconductor players that have operations in Arizona, the semiconductor industry is likely to have a significant impact in this state over the next 10 years. This expansion will lead to a sharp increase in the growth of well-paying, high-tech jobs in our state. Take the case of medical advancements.  Over the next 10 years, we will see a significant expansion in the use of semiconductors for surgical and analysis equipment; in portable, wearable and implantable medical devices; and in the cost-cutting use of remote medicine, where patients will be monitored by medical professionals in lower-cost regions.

I will, however, add one cautionary note to the optimistic picture I have just painted.  The formation of new start-up companies is driven by the availability of venture-capital funding. Arizona continues to be plagued by a scarcity of risk capital, as most venture-capital firms are located in California, Texas and Massachusetts. The result is that those states continue to attract the bulk of VC-backed startups.  While Arizona has been a technology hotbed in recent years, we must fix this problem if we are to remain the “Silicon Desert.”


Environment

Diane Brossart, president, Valley Forward Association

In the next 10 years, Arizona will diversify its economy through green jobs and technology. Renewable energy sectors will proliferate with solar leading the way. In the next 100 years, we will become the solar capitol of the world. Light rail connects Valley cities. Commuter rail takes us across the nation. Arizona is a burgeoning hub of economic activity. Parks and open space dot the landscape. Innovation and technology abound. Our legislature is enlightened and the green revolution leads to new water sources in our vibrant desert oasis, now free of particulate pollution.

Kelly Mott Lacroix, graduate research associate, Water Resources Research Center, Tucson

Over the next 100 years, our water management will need to be flexible and progressive enough to allow us to prosper in the face of supply uncertainty from changes in climate and the continuing growth of our economy.  Arizonans will have to make decisions about what we value most about this state and those decisions will dictate how the water issue changes Arizona.

Larry Howell, CEO and president of KEBAWK Response Technologies, a Scottsdale-based engineering company that responds immediately to hazardous or catastrophic disasters

Environmentally-conscious companies like KEBAWK are going to continue to grow and have a much more pivotal role in growing the economy in the next 10 years as businesses strive to be as sustainable as possible. What was once a trendy, cottage industry is now a must for businesses.


Health

Dr. Grace Caputo, director, Phoenix Children’s Hospital/Maricopa Medical Center Pediatric Residency

I see medical education as a dominant force in Arizona, especially with the growth of the University of Arizona campus downtown. Innovative pediatric care will continue to be a highlight at Phoenix Children’s Hospital, but healthcare overall will continue to improve our community as birth to age 5 is the fastest growing population in Arizona.

Catherine Niemiec, president, Phoenix Institute of Herbal Medicine & Acupuncture, College & Clinic

In the future, acupuncture and oriental medicine (AOM) will fill the gaps created by high insurance rates, fewer primary care physicians, and seemingly incurable or chronic conditions. Acupuncture can be available for the same cost as a co-payment, supporting the need of those who have no insurance or who need to seek different care beyond what their insurance will cover. A report on “Complementary and Alternative Medicine in the United States” cites widespread use of CAM, with more future visits to CAM providers than to primary care physicians (with most of these visits paid out-of-pocket).

Kenneth J. Biehl, M.D., radiation oncologist, Arizona Oncology

Long-term changes for the use of radiation in cancer care will involve a combination of treatment directed at the molecular level and immense precision with external radiation. Targeting cancer with radiation at the molecular level has been developed for only a handful of cancers to date. The struggle to find and develop cures at the molecular level will be one of the determining factors in how the people of Arizona will receive cancer treatment for the next hundred years.

Mahesh Seetharam, M.D., medical oncologist and hematologist, Arizona Oncology

In the next decade, electronic medical records will continue to evolve to help coordinate care between the various providers to optimize outcomes. It is very difficult to predict given the current labile healthcare environment.  The concept of universal healthcare is very possible, but with that comes the need for additional providers and resources to provide the necessary care.  Personalized medicine could be a reality in the next decade or two, and this will certainly improve outcomes.


Banking

Lynn Crane, executive vice president, bank operations and services, Mutual of Omaha Bank in Arizona

Mobile devices will replace plastic cards.  This will completely change the “check out” experience at retailers. Arizona shoppers will be able to scan merchandise as they pick it up off the shelf and make payment without stopping at a checkout counter when they leave the store. On the negative side, this transition to non-traditional delivery channels will make bank branches less relevant. Online financial consultants will replace branch employees and a trip to the bank will become a thing of the past for Arizonans. Some branches will close and the industry will require a smaller workforce. The future value of currency will not rely on paper, but on digital data, so heightened security concerns and demand for data protection will prevail.  As a trusted source of security, banks will play a much larger role in helping Arizonans secure their valuables and their future.

Craig Doyle, Arizona market president, Comerica Bank

Some of the industry segments critical to our future are aerospace and defense, semi-conductor manufacturing, business services technology, health care and renewable energy.  Effectively supporting their growth requires a deep understanding of supply chains and related capital markets.  It will take time, but the Arizona banking industry should help facilitate the appropriate capital markets so that Arizona is competitive with other major economic regions in helping companies, form, grow and mature.


Education

Michael M. Crow, president, Arizona State University

Within 10 years, ASU will be America’s finest example of a widely accessible research intensive public university and in this mode it will be capable of operating at a very rapid and large scale for educational competitiveness for Arizona.  In this mode, the university will have deployed its assets to maximize the competitive position of Arizona through its role as a comprehensive knowledge enterprise producing fantastic graduates, ideas and new technologies. ASU will be a critical asset for Arizona going forward over the next 100 years as the knowledge based economy or at least knowledge driven adaptation and innovation to the uncertainties and the complexities that lie ahead in the areas of global finance, economic competitiveness, environmental sustainability and so forth will be such that what universities like ASU do will be more important than ever.  This is true specifically for ASU in the context of Arizona as Arizona in the next 100 years grows and matures into America’s preeminent example of a free enterprise driven innovation catalyzed state.

Bill Hubert, president and founder of Scottsdale-based Cology, Inc., which helps lenders enter the student loan market

At some point, the cost of education is going to have to “normalize” within the overall economy.  For decades, cost of attendance, whether private or public, traditional or trade-based, has increased at much higher than normal rate.  Our business of providing financial services that connect students and families with a broad spectrum of relationship based funding sources will certainly help increase access and drive down overall costs – of program administration, funding sources, and even institutional administrative costs.

Deanna Salazar, senior vice president and general counsel of Blue Cross Blue Shield of Arizona

I believe that by supporting community outreach efforts similar to the Green Schoolhouse Series, which makes schools healthy and green “inside and out” through the development of an integrated health and wellness curriculum and green gardens to promote nutrition and wellness in disadvantaged schools, BCBSAZ will continue to be positioned as a leader who is genuinely taking care of the health of Arizonans, in both traditional and non-traditional ways that create a better future for all. For years to come, it’s BCBSAZ’s hope for the green gardens to teach children about healthy eating and physical activity by allowing them to use and maintain the garden.


Marketing

Kristin Bloomquist, executive vice president, general manager, Cramer-Krasselt

As I look into a crystal ball, the marketing world as we know it will change dramatically in the next 100 years. It will be forever changed even in the next 10 years. However, brands will not go away. In fact, they will be even more valuable both in the next decade and in the next century if they can evolve as we evolve, as our technology evolves. Those brands that increase in value over time will have very different ways of communicating with consumers. Everything will be personalized. Everything will happen in real time. There’s a good chance that 100 years from now, as far as commercial messaging and targeting goes, “Minority Report” will be seen as an amazingly accurate forward-looking documentary rather than a work of fiction.

Rob Davidson, co-owner of Phoenix-based Advertising firm Davidson & Belluso

Think of how social media has drastically impacted communications with customers and prospects in recent years. Marketing and advertising will keep changing at an even faster rate as new technology becomes available. Smart phones and tablets have already become standard channels of any marketing plan. Companies who stay on top of the latest marketing tools and learn about their customers changing behaviors are the ones who will be successful in reaching their target markets.


Energy

Mark Bonsall, general manager and CEO, SRP

In the next decade, the growth in wind and solar will continue to be strong, but will still provide a relatively small portion of the needed energy just because the scale of what is needed is so large. It is likely most of the new baseload resources will be fueled by natural gas.  New drilling and recovery technology is providing access to vast quantities of natural gas within the U.S. at relatively low costs, at least so far.  This provides a good bridge to develop systems that can improve the efficiency of solar systems, address the intermittent nature of most renewable resources, find safe and more cost-effective ways to deploy nuclear power, and provide the time for innovative new ideas we aren’t even aware of now.

John Lefebvre, president, Suntech America

With supportive policies, the solar industry will continue to grow and flourish, creating a major employment sector for the state. Additionally, every year the cost of solar is driven down, getting closer and closer to achieving grid parity in the U.S. As solar becomes a market-driven industry, Arizona is poised to be a major global solar industry hub, particularly with the continued development of large-scale solar projects. Ultimately, I hope to see energy generated from solar grow to a significant percent of the U.S. energy supply portfolio and eliminate our dependence on foreign oil, providing a low-cost solution to power our homes and cars. With solar, the sky’s the limit.


Housing

Rachel Lang and Marcy Briggs, loan officers for the Briggs-Lang team of Cobalt Mortgage

The rental market will continue to strengthen with long-term renters. We also see a stabilization within the Arizona real estate market due to the mortgage underwriting guidelines remaining more conservative than they were five years ago, and slightly less conservative five years from now.

Alan Boughton, director of commercial operations, W.J. Maloney Plumbing

As the population in the West increases and the demand for water intensifies by a seemingly unpredictable water supply and snow pack, innovation in low-flow plumbing fixtures could be our industry’s greatest impact on Arizona as more people are forced to live with less water.

CR Herro, vice president, environmental affairs, Meritage Homes

Homes will be built to work better, use fewer resources, be healthier, and adjust to the needs of owners. On the fringe of the market today are homes that can adjust the transparency of windows, extend and retract solar shades, turn on lights, change thermostat settings over a smart phone, and achieve net-zero energy demand. These changes allow homes to adapt to the unique needs of its occupants, offer more control, and waste less energy and resources (money) in their operation.


Transportation

Danny Murphy, Airport director, Sky Harbor International Airport

The biggest evolution our industry will experience is a transformation of the entire national air transportation system to avoid gridlock in air travel, called “NextGen.” This means moving from ground-based technologies to a new and more dynamic satellite-based technology.  While airport delays are minimal in Arizona, our passengers are impacted most when traveling to and from other locations and this technology will greatly improve that. Over the next 100 years, continental investment and enhancements to the state’s main airports will be critical to serve the needs of Arizona’s growing population.


Entertainment

Brad Casper, president, Phoenix Suns

In continuing to operate at the forefront of innovation, the Suns will offer fans the most technologically advanced atmosphere in professional sports, while emerging as the most winning franchise in NBA history. Through strategic partnerships, the Suns will act as a catalyst towards creating a sustainable entertainment and business environment, unmatched by any NBA/WNBA organization.

Catherine Anaya, chief journalist, KPHO CBS 5 News

I think in the next 100 years the marriage between television and computers will be such that we will be doing everything we do on a computer. There will still be a place for television news. However, I don’t think we’ll see it in the studio format we’ve been accustomed to seeing. I think we’ll end up shooting and broadcasting our news via our smart phones or whatever those evolve into in time. As a result, I think it will create more intimacy and interaction among Arizonans. That may or may not be a good thing as familiarity lines will get blurred.

Teri Agosta, general manager, Pointe Hilton Squaw Peak Resort

The hospitality industry will continue to drive revenue into the Arizona market through increased travelers, due to the aging demographic, who will have more leisure time and money to spend. Also business travel will continue to grow as corporations realize people need direct contact with team members and clients to build a successful business, and webinars and teleconferencing do not meet these needs.  Also, our consistent weather will become more valuable to travelers, who will scrutinize their travel spending even more.

Melody Hudson, public relations manager, Gila River Gaming Enterprises

The opportunity for new job creation will become more prevalent than ever before with potential capital expansion opportunities which could result in not only new construction positions, but new positions within the Enterprises’ casinos as well. This potential growth could also result in an increase of revenues for both local and national businesses that supply goods and services to the Enterprise. Additionally, potential growth from not only Gila River Gaming  Enterprises, but the gaming industry in general in Arizona,  would result in larger amounts of funding going to the state for education, tourism, wildlife conservation and emergency services.

Carey Pena, co-anchor, 3TV News at 10 p.m.

There is a generally accepted theory of human knowledge that says:  today, we know 5 percent of what we will know in 50 years. In other words, in 50 years, 95 percent of what we will know will have been discovered in the past 50 years.  That makes it hard to imagine what 100 years will look like.

Arizona Business Magazine January/February 2012

 

Arizona Economic Forecast 2011

Arizona’s Economic Recovery Remains Sluggish, But The Outlook Is Brighter

While the nation’s economy showed some significant signs of life in the first half of 2011, the state’s economy continues to bounce along the bottom. But forecasters at the Economic Club of Phoenix’s Annual Economic Outlook 2011 luncheon on May 5, said they are looking at a comparably stronger finish to the year, with growth continuing at a healthier pace leading up to 2015.

“Arizona job growth is still very weak. For the first quarter, the Arizona economy has added only 4,100 jobs over the first quarter of last year, so growth is well below one half of one percent,” said Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business in an interview before the luncheon. “The summer is not usually a strong period for job growth in Arizona, in fact the economy basically goes nearly flat. We are currently forecasting 1 percent job growth, or an increase of about 24,000 new jobs for the year.”

McPheters said that if Arizona has any hope of generating 1 percent job growth, the state and nation’s economies needed to get moving in the second half of the year.

“Current national forecasts are calling for improved job growth this year, but it will also tend to be weighted to the second half,” he said. “So, economy watchers have their fingers crossed that things will improve after summer.”

According McPheters’ forecast, in 2011 the nation will record 650,00 housing starts, an inflation rate of 2.6 percent, 2 million jobs created and GDP growth of 3.1 percent.

Here in Arizona, where the state once led national economic recoveries, it is now relying on growth in other parts of the country to rev up its financial engine.

“Arizona population growth depends as much on events outside Arizona as within the state,” McPheters said. “If Arizona job growth improves (and it has a long way to go), this would act as a ‘draw.’ But people have trouble moving if they cannot sell their house or if they cannot get the price they need. That is why we expect to see more young people move to the state, they will rent instead of buy and are less locked into a particular career path.”

This year, McPheters forecasts that Arizona job growth will only be 1 percent, with personal income rising 4 percent. Meanwhile, single-family home permits are expected to rise by just 10 percent and the population will increase by 1.5 percent. The forecast is only slightly better in 2012, with employment expected to be up 2 percent, a 30 percent increase in single-family home permits and a 1.8 percent rise in the number of people moving into the state.

Arizona Economic Forecast 2011

However, McPheters said, the state’s economy will continue an upward trajectory through 2015, with personal income rising 6.5 percent, the rate of job growth hitting 3.5 percent and a population increase of 2.5 percent. Single-family housing permits are expected to increase by 50 percent in 2013 (reflecting the current stasis in the residential home industry) before leveling off to a 20 percent growth rate in 2015.

Arizona Economic Forecast, Far Forecast, Arizona Recovers

In raw numbers, McPheters forecasts that between 2011 and 2015 the state will create 300,00 jobs, issue 112,500 single-family home permits, and see 665,000 new residents.

Arizona Forecast, Annual numberic change in employment

The state’s ongoing budget crisis has been one of the major factors in Arizona’s slow economic recovery.

“The effect of budget cut backs has been felt sharply by local governments,” McPheters said. “Their employment is down by 5,000 workers and is expected to decline more in the months ahead. Typically, we look to state and local government as a source of stability, not necessarily a growth sector. But current budget problems have changed all that.”

Not too long ago, Arizona enjoyed a substantial budget surplus. So, where did all the money go? Dennis Hoffman, director of the L. William Seidman Research Institute, succinctly illustrated the devastating effect the economic crash had on Arizona residents and, in turn, the state’s revenue.

  • The number of millionaires in Arizona dropped from 6,000 in 2006 to about 2,500 in 2009.
  • Taxes paid by millionaires dropped from more than $800 million in 2006 to under $300 million in 2009.
  • In 2006, the state’s 70,000 tax filers with incomes of $200,000 and above paid half of all taxes or $1.6 billion. In 2009, that same group of taxpayers shrank to under 50,000, paying about $550 million — less than 25 percent of the total taxes paid.
  • In addition, the state reduced tax rates by 10 percent after 2006.

 

When adjusted for inflation, the average amount of income tax collected from an Arizona resident dropped from about $1,650 in 2005 to about $1,050 in 2009. But even as fewer dollars come in, the state’s expenditures have remained relatively constant.

“Right now, the state’s expenditures represent about $425 per $10,000 of personal income in Arizona,” Hoff man said at the luncheon. “However, the state is only collecting about $300 per $10,000 of personal income. Obviously, that’s not sustainable.”

Hoffman did sound one bright note.

“The last couple of months have seen considerably robust retail sales, especially in the area of durable goods,” he said, adding that improved consumer confidence is fueling the recent growth.

That will certainly help the state government as it grapples with its budget crisis, but Hoffman also pointed out that the temporary sales tax increase will expire just as the economy is expanding and putting more pressure on public sector services. He added that state policymakers will face a “balancing act” during much of the next five years — especially in 2014. Part of the solution, Hoffman said, will involve streamlining the state’s expenses and raising taxes.

“Government just simply has to be more efficient in it’s expenditures,” he said. “(And) we have to ask everyone to contribute according to their means.”

To read more, visit knowledge.wpcarey.asu.edu.

Economic forecast

Economic Forecast Calls For Another Year Of Slow Recovery In 2011

Arizona’s economic recovery will continue to move at a glacial speed in 2011 — but at least it’s moving. The coming new year will see an increase in job creation, a rise in population and even a modest increase in single-family home permits. However, the consensus among economists at today’s 47th Annual Economic Forecast Luncheon, co-sponsored by the Department of Economics at Arizona State University’s W. P. Carey School of Business and JPMorgan Chase, is that Arizona’s recovery will continue to be far less robust than economic rebounds of the past.

“Arizona was much harder hit in this recession than the rest of the country,” said Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W.P. Carey School of Business in an interview before the luncheon. “Overall the U.S. lost about 6 percent of jobs, while Arizona lost 11 percent of jobs and the Greater Phoenix area lost 12 percent of jobs. So, by that measure, Arizona’s problems were twice as large as the average state.”

According to McPheters, hampering Arizona’s growth in 2010 has been:

  • Consumers’ focusing on paying off debt rather than spending
  • Corporate profits improving but hiring deferred
  • The expected resurgence in single-family housing did not develop
  • Home prices have not yet stabilized
  • Small businesses facing tight credit conditions and weak demand
  • Stimulus programs ending


Job Growth

In terms of job creation, Arizona employment is expected to increase by 47,800 jobs in 2011, following three straight years of losses. The projected rate of growth for 2011 is 2 percent. That’s about double the rate of employment growth anticipated for the nation as a whole, but well below the state’s long-term average of 3.7 percent.

In addition, the state’s unemployment rate will remain above the 9 percent mark throughout 2011.

Still, even with Arizona being at ground zero of the burst housing bubble that dragged the rest of the nation into recession, the employment situation in the state has shown a marked improvement.

“For all of 2009, at the deepest point of the recession, only Nevada had weaker labor market conditions, and Arizona ranked 49th among the states in job growth (or losses),” McPheters said. “But in just the past couple of months, Arizona’s overall position is improving. The state ranked 12th based on October job creation in the 50 states. And in September, Phoenix added 27,400 jobs compared to the year before. Phoenix is the now the second-fastest growing metro area.”

Real Estate

The real estate and housing markets in Arizona remain weak in 2010, with single-family housing permits expected to be down 5 percent, marking a fifth consecutive year of declines. Single-family housing permits are expected to finally improve next year, with an anticipated increase of 25 percent. However, that increase stems from a base of 12,000 units in 2010, totaling just an additional 3,000 units. Compare that paltry number to the 80,000 annual permits handed out at the peak of the housing boom.

“Last year at this time, there was optimism about Arizona housing, but the growth never came,” McPheters said. “It looks like 2010 single-family building won’t even reach the level of 2009, which was the worst year of the recession. So most analysts are cautious right now about housing.”

One of those cautious analysts is Elliott Pollack, CEO of Elliott D. Pollack & Company in Scottsdale.

“The good news is that the worst is over, but it’s going to be a painfully slow recovery,” Pollack said in an interview before the forecast luncheon.

Pollack lists the following as reasons why the state’s housing market is showing only the slightest signs of improvement:

  • Tougher underwriting standards on mortgages
  • Up to 51 percent of the homes in Arizona have negative equity
  • Previous loan modifications have mostly failed
  • Foreclosures remain high
  • Option ARM resets do not peak until next year