Phoenix, Tucson economies do well in 2017 but could improve more
Dec 20, 2017, 4:12 AM | Updated: 11:31 am
(AP Photo)
(AP Photo)
PHOENIX — The Phoenix and Tucson economies performed fairly well in 2017, but a local economist said there was some sectors that could be improved.
“The state as a whole – and Phoenix – are growing significantly faster than the national average,” George Hammond, who heads the University of Arizona’s Eller Economic and Business Research Center, said.
“Tucson is somewhere in the neighborhood of the U.S. national average but it’s growing.”
Last year, Hammond predicted the two economies would increase despite federal fallout from the sequester and other budget cuts that were holding Tucson back from growing as fast as other cities.
One area of concern over the past year was wages.
“Overall income growth has been really weak since the great recession ended and that hasn’t really picked up steam,” he said.
One reason, Hammond said, might be baby boomers retiring.
“There’s some evidence – at least at the national level – that what’s happening is relatively high-paid baby boomers are retiring and being replaced by lower-paid millenialls … who are just at earlier stages in their careers.
“That’s making the overall wage-growth data slower than if we looked at the raises individual people are getting.”
Hammond also said he was continually concerned with Mexican tourist spending and Arizona’s exports to Mexico – thanks to a strong dollar and relatively weak Mexican peso.
Last year, he said a strong dollar was slowing spending in both of these areas. That seems to have leveled off but it was not a big jump.
On the other hand, “The effects of a big change in the value of the currency will gradually have less and less impact over time.”
The bottom line, Hammond said, is that Arizona continues recovering from the great recession.
“If the national economy continues to expand in 2018, as most economists expect it to, that will really set the state for continued growth at the same pace.”
