2011 Benson Economic Outlook
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www.cochise.edu/cer An economic overview of Benson, Arizona and the San Pedro Valley presented by the Cochise College Center for Economic Research Special thanks to our sponsors The organizations and individuals listed on the following pages sponsor the Cochise College Center for Economic Research (CER). Their generous contributions allow the CER to undertake various research projects and studies, as well as hold the annual Benson Economic Outlook Luncheon and produce this publication. We greatly appreciate their generous support. For information on how you can become a sponsor, please contact the CER at (520) 515-5486 or by e-mail at [email protected]. PLATINUM SPONSORS WHETSTONE DEVELOPMENT COMPANY WHETSTONE PARTNERS LLP PHOTOGRAPHY BENSON VISITOR CENTER FORT HUACHUCA PUBLIC AFFAIRS OFFICE DESIGN SIERRA DESIGN & PUBLISHING PRINTING COCHISE COLLEGE PRINT SERVICES KEITH RINGEY, COORDINATOR JUAN ZOZAYA, LEAD PRESSMAN GOLD SPONSORS \ (520) 458-4691 www.ssvec.org SILVER SPONSORS Arizona Electric Power Cooperative • (520) 586-3631 • www.aepco.coop Sierra Southwest Cooperative Services • (520) 586-5000 • www.sierrasouthwest.coop Southwest Transmission Cooperative • (520) 586-5599 • www.southwesttransmission.coop (520) 586-2245 • www.cityofbenson.com (520) 458-4313 • www.cherrycreekradio.com (520) 458-4705 • www.cox.com Copper Queen Branch • (520) 432-6200 • www.fcx.com (520) 459-1702 • www.swgas.com BRONZE SPONSORS ACE Hardware SIERRA VISTA • BENSON • BISBEE (520) 458-3650 • (520) 586-7345 • (520) 432-4975 www.sierravistaace.com Cochise County (520) 432-9200 • www.cochise.az.gov Lawley Team Ford – Benson (520) 586-3661 • www.lawleyfordofbenson.com San Pedro Valley News-Sun (520) 586-3382 • www.bensonnews-sun.com SouthEastern Arizona Governments Organization (SEAGO) (520) 432-5301 • www.seago.org INDIVIDUAL SPONSORS Baker, Peterson, Baker & Associates, Inc. Benson/San Pedro Valley Chamber of Commerce Dr. Robert Carreira Pioneer Title Agency, Inc. PSOMAS Sahara Motel Sierra Design & Publishing Southeastern Arizona Contractors Association, Inc. (SACA) Table of contents 1 A review of the national, state, and local economy 34 Housing, real estate, and commercial construction 4 Accomplishing the mission New Residential Construction by Glenn Nichols Existing Home Sales Housing Affordability 6 The City of Benson Commercial Construction Benson Municipal Airport Outlook Quality of Life Water Conservation 38 Bank deposits Capital Improvements and bankruptcy filings Cost of Living Climate 40 Mexico Seasonal Visitors Overview Tax Rates Aqua Prieta, Sonora Crime Rate Naco, Sonora Economic Impact of Mexican Visitors 12 Economic development U.S. Travelers to Mexico Benson/San Pedro Valley Chamber of Commerce SE Arizona Economic Development Group (SAEDG) 45 Fort Huachuca Rural Economic Development Initiatives Economic Impact Arizona Enterprise Zone Program U.S. Fish and Wildlife Biological Opinion 15 Education 48 Cochise County agriculture Primary and Secondary Education St. David Farmers Market Post-secondary Educational Opportunities Educational Attainment 50 Tourism General Overview 19 Healthcare Benson’s Railroad Heritage Benson Hospital Attractions and Activities Good Samaritan Society – Quiburi Mission Tourism Trends in Benson Southeastern AZ Behavioral Health Services & Cenpatico Cochise County State and National Park Visitations Cochise County Lodging Indicators 22 Demographics Economic Impact of Tourism in Cochise County Population Estimates and Projections The Film Industry in the Benson Area Race and Ethnicity Benson Calendar of Events Age Groups Household Characteristics 57 Renewable energy Income Overview SSVEC Renewable Energy Program 25 Employment Employment, Unemployment, Labor Force, and Job Growth 59 About the CER Occupations and Classes of Workers Contact the Center for Economic Research Industries CER Staff Major Employers Benson Economic Advisory Committee Wages Cochise County Employment 61 Cochise College resources Outlook Resources A Note on Employment Data Governing Board Administration 30 Retail trade and commerce Taxable Sales Community resources Retail Sales 64 Restaurant and Bar Sales Accommodation Receipts Business Establishments Retail Out-Shopping Outlook BENSON ECONOMIC OUTLOOK • 2011 1 Benson Visitor Center Photo: Benson Visitor Center A review of the national, state, and local economy National In September 2010, the National Bureau of Economic Research announced the recession, which began in December 2007, had officially ended in June 2009. At 18 months, the recession was the longest economic downturn since the Great Depression. From the beginning of the recession in December 2007 through December 2009, the national economy lost 8.4 million jobs, pushing the nation’s unemployment rate from 4.4 to 10 percent. The unemployment rate in October 2009 hit 10.1 percent, its highest level since June 1983. From March through May 2010, the national economy gained 927,000 jobs, but many of those were temporary Census jobs. June through September saw a net loss of 329,000 jobs, which was driven by the loss of Census jobs. From October through December, the national economy gained 416,000 jobs, leading to a net gain of 940,000 jobs for calendar year 2010. In the first quarter of 2011, Robert Carreira, Ph.D. the national economy gained 478,000 jobs, more than half of the entire net gain of 2010. In March Director 2011, the national unemployment rate dropped to 8.8 percent, its lowest level in 2 years. From Center for Economic Research November 2010 to March 2011, the nation’s unemployment rate fell by a full percentage point. Cochise College The nation’s gross domestic product (GDP), the broadest measure of economic activity representing the value of all goods and services produced in the economy, declined in 5 of 6 quarters from the first quarter of 2008 through the second quarter of 2009. Signaling the end of the recession, GDP was up for 6 straight quarters from the third quarter of 2009 through the fourth quarter of 2010. Overall, GDP stagnated in 2008, declined 2.6 percent in 2009, and increased 2.9 percent in 2010. 2 BENSON ECONOMIC OUTLOOK • 2011 Arizona U.S. RECESSIONS SINCE 1945 From December 2007 through December 2010, Arizona lost 309,200 jobs. The hardest PEAK TROUGH DURATION hit industries were construction, which lost 102,000 jobs; trade, transportation, and (MONTHS) utilities, which lost 68,300 jobs; and professional and business services, which lost 61,900 FEBRUARY 1945 OCTOBER 1945 8 jobs. Within the trade, transportation, and utilities industry grouping, more than 70 NOVEMBER 1948 OCTOBER 1949 11 percent of the jobs lost were in retail trade. Arizona’s unemployment rate rose from a low JULY 1953 MAY 1954 10 of 3.6 percent in July 2007 to a high of 10.4 percent in November and December 2009. As AUGUST 1957 APRIL 1958 8 of February 2011, the statewide unemployment rate sat at 9.6 percent, where it had APRIL 1960 FEBRUARY 1961 10 stabilized since November 2010. DECEMBER 1969 NOVEMBER 1970 11 Arizona’s GDP fell by 1.5 percent in 2008 and 3.9 percent in 2009. Arizona’s economy NOVEMBER 1973 MARCH 1975 16 was 46th in the nation in 2008 and 47th in 2009, ranked according to economic growth rates. In 2005 and 2006, Arizona was one of the top 3 fastest growing states in the nation, JANUARY 1980 JULY 1980 6 economically. In 2009, the continued decline in construction was the major cause of the JULY 1981 NOVEMBER 1982 16 slowdown, subtracting 1.5 percentage points from the state’s GDP. This was followed by JULY 1990 MARCH 1991 8 real estate and rental and leasing, which subtracted 0.67 points, and retail trade, which MARCH 2001 NOVEMBER 2001 8 subtracted 0.56 points. DECEMBER 2007 June 2009 18 The budget deficit continued to dominate the legislative agenda in 2010 and into 2011. Source: National Bureau of Economic Research. During the boom years, state taxes were lowered and government spending increased to unsustainable levels. The housing market decline and reductions in sales and income tax revenue resulted in budget deficits in fiscal years 2009, 2010, and 2011. As of early 2011, the state government faced a current-year budget deficit of $700 million and a projected deficit of more than $1.1 billion for fiscal year 2012. This was despite the passage of Proposition 100 in May 2010, a measure that increased the state’s sales tax rate for 3 years by one percentage point from 5.6 to 6.6 percent. In November 2010, voters rejected Propositions 301 and 302, which would have redirected $470 million from land conservation and early-childhood development to the state’s general fund. Cochise County In 2010, Cochise County lost 625 nonfarm jobs for job growth of -1.7 percent. The only sector to see positive job growth in 2010 was government, led by a gain of 350 federal government jobs (6.7 percent job growth), which was mostly offset by the loss of 300 state and local government jobs (-4.1 percent). Professional and business services lost 250 jobs (-4.3 percent), trade, transportation, and utilities lost 150 jobs (-2.4 percent), manufacturing lost 100 jobs (-14.8 percent), financial activities lost 50 jobs (-5.1 percent), leisure and hospitality lost 50 jobs (-1.2 percent), educational and health services lost 25 jobs (-0.6 percent), information lost 25 jobs (-3.8 percent), and other services lost 25 jobs (-2.8 percent). Construction jobs stabilized at 2009 levels in 2010. Cochise County’s retail market slipped into recession in late 2007 and remained there through early 2011. Annual retail sales countywide declined by 6.5 percent in 2008, 4.2 percent in 2009, and 4.8 percent in 2010, after adjusting for inflation. In January 2011, sales were down 7.9 percent compared to the same month the year prior. Cochise County’s restaurant and bar sales also slipped into recession in late 2007. Inflation- adjusted sales were up 0.2 percent in 2008 and 0.3 percent in 2009. In both years, monthly sales saw considerable instability with a few strong months pushing sales for the year into positive territory.