Phoenix and the broader Arizona economy are expanding again after an extremely difficult recession, although growth will be more modest than the boom times of a decade ago, according to a report released today by BMO Economics.
The labor market is a bright spot, with the city remaining consistent in its job growth performance. “The city has been a consistent job growth outperformer so far during the recovery and, after a soft patch earlier in the year, growth has accelerated again,” said Robert Kavcic, Senior Economist, BMO Capital Markets. “If the recent growth clip persists – and we believe that it should – the Phoenix economy should be able to add roughly 85,000 new jobs by the end of 2016.”
“It’s encouraging that the economic health of Arizona, and Phoenix in particular, continues to improve,” said Steve Zandpour, newly-appointed Arizona Regional President, BMO Harris Bank. “It’s nice to see construction activity again. Projects that had been on hold for quite a while have broken ground, adding another positive stimulus to the community.”
The Valley’s economic diversity will help it continue to recover at a solid pace. “Phoenix boasts a diverse economy with exposure to a wide range of industries in high-tech manufacturing, construction, finance and professional services,” stated Kavcic. “Of the 250,000 jobs lost during the recession, nearly three-quarters of them have recovered.”
The finance and insurance sector employs more than 125,000 people – a record high, in the city. The fast-growing biotechnology sector also has a strong presence in the region, with two new structures recently approved at the Phoenix Biomedical Campus, including a $136 million investment by the University of Arizona.
On the housing side, the foreclosure rate across Arizona has tumbled to below 1 percent – now among the lowest in America – while higher home prices have reduced the share of mortgages in a negative equity position. “Fundamentals support a continued, albeit more modest, housing market recovery in the city,” said Mr. Kavcic.
To view a full copy of the report, visit www.bmocm.com/economics.