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Valley economist: Phoenix-area economy had good year, but still not where it was

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PHOENIX — The Greater Phoenix Chamber of Commerce and Cox Communications held their yearly economic outlook breakfast Wednesday morning at the Arizona Biltmore in Phoenix to paint the picture for 2017.

Valley economist Elliott Pollack with Elliott D. Pollack & Company has mixed feelings about the economy for next year.

“The scary part is that for those people who came into the labor market in 2006 or later, they probably think this is the norm,” Pollack said. “The reality is that as long as the U.S. economy grows slowly and population flows to Arizona stay low, this is as good as it gets. I don’t see population flows picking up much.

“The economy will continue to grow but instead of 4.5 or 5 percent in terms of employment growth, we’ll be at about 3.5 percent. In terms of population growth of 3 or 3.5 percent, we’ll be at around 2 percent.”

Home building also concerns Pollack. The housing market is going to be a 20,000-unit market, but the norm prior to the great recession was 30,000 to 35,000.

“If you compare it to 2011 when 6,800 single family homes and condo units were built, you’re doing cartwheels,” Pollack said. “If you compare it to 2005 when we had 63,000 units then you’re saying, ‘What’s going on here?’ Home builders have done an amazing job here. They lost almost 90 percent of the market and still survived. Now the market is coming back and they’re for the most part profitable.”

Pollack said we’re in a different world in the Valley from before 2007.

“Greater Phoenix used to be first, second or third in terms of job growth in markets with more than a million jobs,” he said. “Right now we’re sixth or seventh. Best year since 2007 but it’s not where we used to be.”

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