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Slide 1 - Maricopa Community Colleges

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					Economic and Workforce
      Indicators
        August 2009
                 U.S. Economic Overview
•   The recession appears to have reached its zenith in the second quarter of
    2009. Economic indicators are beginning to bottom out.

•   The “Great Recession” is expected to end over the summer and a slow
    recovery will begin.

•   The U.S. has lost nearly 2.6 million jobs in 2009, on top of 3.1 million in
    2008. The U.S. has lost jobs in every month since January 2008.

•   Unemployment stands at 9.5% in June - a 25-year high. The rate will top
    10% in 2009 and continue to rise even after the recovery begins.

•   Factoring in other measures of unemployment and underemployment,
    the US rate jumps to 16.8%.

•   Arizona has been hard hit, entering recession before the U.S. and
    likely exiting after.
                Arizona Economy Update
•   Since 2007 Arizona has lost 308,000 jobs, or 11.4% of employment. A
    further 5.0% decline is projected for 2009, and 2.3% in 2010.

•   Employment growth in unlikely before 2011, and 2007 employment levels
    will not be recovered until 2013 – a six-year correction.

•   Per capita personal income was up only 0.4% in 2008, ranking Arizona
    50th among states.

•   Greater Phoenix had the fifth largest year-over-year employment loss
    among large metros in June, behind Los Angeles, New York City,
    Chicago, and Detroit.

•   In 2006 Arizona ranked second in job growth among states. In 2008
    it ranked 47th.
   Employment in Greater Phoenix
                      June to June

Nonfarm Employment                2008-2009   2007-2009
Construction                         -26.5%      -39.6%
    Construction of Buildings        -28.6%      -40.1%
    Heavy and Civil Engineering      -21.5%      -28.6%
    Specialty Trade Contractors      -27.0%      -41.4%
Employment Services                  -26.2%      -34.6%
Retail                                -8.4%       -9.4%
Financial Activities (including       -5.2%       -9.5%
Real Estate)
               Employment Growth
                          2006 – Present
         Percent Change, Year Ago
 8.0%
                                           Recession Begins
 6.0%
 4.0%
 2.0%
 0.0%
 -2.0%
 -4.0%
 -6.0%      Arizona
 -8.0%      U.S.

-10.0%
                   2006             2007         2008         2009
           Unemployment Rate
                      2006 – Present
10.0%
                                  Recession Begins
        Arizona
9.0%
        U.S.
8.0%

7.0%

6.0%

5.0%

4.0%

3.0%
               2006        2007         2008         2009
               Arizona Industry Sectors
•   Manufacturing employment statewide down 6.8% (June to June).

•   Intel, Honeywell, Banner Health, ON Semiconductor are some of
    the larger employers who will be downsizing over the next several
    months.

•   Positive Growth in Federal Government (+3.1%), Aerospace
    (+2.9%), Hospitals (+2.3%), Nursing and Residential Care (+2.0%),
    Local Government Education (+1.7%), Accommodation (+0.4%) –
    that’s it!

•   Negative Growth statewide Specialty Trade Contractors (-28.4%),
    Employment Services (-26.4%), Construction of Buildings (-24.7%),
    Furniture Stores (-23.4%), Metal Ore Mining (-21.1%), State
    Government Education (-18.0%), and Heavy and Civil Engineering
    Construction (-17.7%).
                   Economic Indicators
•   Nationwide, first time unemployment claims in May are up 56.4% over
    June of 2008, and have approached levels not seen in over 25 years. In
    Arizona first time clams were up 53.4% in June.

•   U.S. retail sales were down 9.0% between June 2008 and June 2009. In
    Arizona sales are off over 10% and auto sales are down over 40%.
    Taxable sales collections are down 11.2% June to June.

•   Housing troubles affecting American consumers means fewer sales of
    “durable goods” to fill the homes and less access to credit and
    declining sales tax revenue

•   Sun Belt states where housing markets have been hit the hardest
    include Arizona, California, Florida and Nevada

•   State population growth projected to be in the 1.3%-1.4% range in
    2008 and 2009, down from 3.6% in 2005 and 2006.
Continued Claims for Unemployment
                             2007 – Present
       In Thousands                                 In Millions
 140                                                              8
                                 Recession Begins
          Arizona (L)
 120                                                              7
          U.S. (R)
                                                                  6
 100
                                                                  5
 80
                                                                  4
 60
                                                                  3
 40
                                                                  2
 20                                                               1

  0                                                               0
                      2007                2008      2009
                    Housing Market
• Median price of an existing single family home in Greater Phoenix is
  down 41.9% from Q1 2008 to Q1 2009. Among the nation’s 20 largest
  metros we led in home price declines in May, down 34.2%.

• About two-thirds of home sales in Maricopa County are bank owned or
  distressed properties.

• Residential homebuilding has all but ceased in the State of Arizona,
  down 91% from peak.

• Conservatively, there is a surplus of 40,000 to 50,000 housing units in
  Greater Phoenix above normal demographic demand

• The commercial real estate market is now showing signs of distress.
  Vacancy rates are rising.
    Single Family Building Permits
        2005 – Present, in thousands
9                                                          180
                                 Recession Begins
8                                                          160
7                                                          140
6                                                          120
5                                                          100
4                                                          80
3                                                          60
2    Arizona (L)                                           40
1    U.S. (R)                                              20
0                                                          0
      2005         2006   2007       2008           2009
                         Bright Spots
• The Feds have been proactive – Stimulus ($787B), home mortgage
  modification ($275B), TALF (up to $1T), Public-Private Investment
  Program ($75-$100B).
• Inflation is under control. Energy prices are down. Deflation might now
  be a concern.
• Stock Market is up 45% since March.
• Mortgage rates are at historic lows, housing affordability is high.
• Consumer confidence is improving.
• Employment growth in Arizona will return by 2010, but will not reach
  2007 levels until 2013.
• Long term growth prospects for Arizona remain strong. State population
  expected to be 15 million by 2040. Employment will double as 3.7
  million new jobs are added.
      Bright Spots – Stimulus Package
• Workforce Investment Act:                         Maricopa County   City of Phoenix
                                Adult                    $1,490,809      $1,453,613
                                Youth                    $2,890,386      $2,930,071
                                Dislocated Worker        $1,669,558      $1,762,515
                                Rapid Response            $200,347         $211,502


• $750 million available nationwide for worker training and placement in
  high growth and emerging industry sectors
• Funds for unemployment insurance modernization being considered
  by the State of Arizona
• National Science Foundation - $100 million available nationwide for
  STEM education at all levels, with $25 million dedicated for math and
  science partnerships
• Additional areas with potential for job training include Health Care,
  Teacher Technology Training, and Head Start
          Questions?




www.maricopa.edu/workforce
     The Maricopa County Community College District is an EEO/AA institution.

				
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