Tag Archives: Phoenix economy

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Arizona economy rising, report shows

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.

SRP Study Reveals How Businesses Reacted, Adapted To Economy

SRP Study Reveals How Businesses Reacted, Adapted To Economy

The “2011 SRP Metro-Phoenix Business Study: New Strategies for Success” reveals how businesses have survived and adapted operations during the economic slowdown.

“The past several years have been economically challenging for families, businesses and every level of government. Everyone felt the pinch of our recent economic downturn,” said Mark Bonsall, Salt River Project (SRP) general manager and chief executive officer. “As a company doing business in Arizona for more than 100 years, SRP knows the vitality of our community is directly related to the success of our local businesses.”

SRP, Arizona State University and WestGroup Research conducted the study to determine how businesses have adapted during the economic slowdown.

Phoenix-area businesses were asked to name the top challenges faced in the past two or three years. Fifty-six percent cited the economy as their biggest challenge, followed by cash flow (14 percent) and finding/retaining customers (11 percent).

A similar study was done in spring 2007. The top challenges cited before the economic slowdown were cash flow (21 percent), finding/retaining employees (18 percent), finding/retaining customers (14 percent) and marketing (7 percent). Only 1 percent mentioned the economy.

Despite enduring a tumultuous four years, 50 percent of businesses anticipate their financial position will improve in the next 12 months; 12 percent expect their situation to become worse. In addition, 46 percent expect to expand within their next planning cycle, and another 46 percent plan to remain the same size.

In addition to partnering on this report, SRP also created the Business Resource Center (BRC) at srpbizresource.com. The BRC is a free, online, one-stop information center that offers important business information, resources and advice to help take businesses to the next level.

“SRP wants to be part of the solution that keeps the Valley moving forward,” Bonsall said. “We believe this study and our Business Resource Center are steps in the right direction. We view both as tools to move us closer to a stronger and more prosperous Phoenix economy.”

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Commercial Real Estate Market Taking Off In Phoenix

As I flew into Phoenix last week, seeing the city from the air and the approach to the airport reminded me that the Valley’s commercial real estate market still has a lot of runway for growth.

More than 1,200 top executives of Jones Lang LaSalle met in Scottsdale last week for our annual leadership meeting. It’s an important event, given that our collaborative culture enables our firm to deliver value to commercial and corporate real estate clients in ways that other service firms can’t, or don’t. So most of the people here were thinking about ways to connect with, and learn from, each other.

But as Jones Lang LaSalle’s Southwest Market Director, my thoughts were on the opportunity for growth in Phoenix. I work with our brokers, property managers, project managers and other real estate professionals in Phoenix and across the region. Our business grows when real estate investors and corporate occupiers grow. And Phoenix is frequently high on the list of U.S. cities for business growth.

It may not be obvious at a time when house prices are about half what they were a few years ago, and unemployment remains maddeningly high. But between 2001 and 2011, Phoenix added more than 80,000 jobs, making it the country’s fourth-largest gainer when the boom and bust are both taken into account.

Moreover, the job market appears to be on the upswing again — a little or a lot, depending on which study you look at. Recently, the Urban Land Institute reported that Phoenix added more than 34,000 jobs since mid-2009 in private education and health services sectors.

Most important, corporate leaders continue to think of Phoenix when they’re considering a business expansion or relocation. That’s good for the city’s long-term growth prospects.

And it’s good for the Phoenix economy overall – including our brokers, construction managers and property management teams.

Peter Belisle - Commercial Real Estate MarketPeter Belisle is the Southwest Market Director for Jones Lang LaSalle, charged with overseeing the firm’s business across the region, which includes Phoenix, Las Vegas, the Los Angeles area, Orange County and San Diego. Business lines under Peter’s direction include tenant and landlord representation, project management and a property and facilities management portfolio of 62 MSF.