Trusted local news leader for Prescott area communities since 1882
Thu, Feb. 20

Local economy slowly starting to improve

The Prescott area's economy made it through another tough year with some hopeful signs of better things to come.

2011 began with an unemployment rate in the double digits but, over the year, that figure dropped by 2 percent.

Single-family home permits got a bump and sales tax revenues also saw a bounce in Prescott and Prescott Valley.

Even Valley economists were predicting a slowly improving economic picture for 2012 and beyond.

"Although the Arizona recovery is tepid at best, every key indicator is expected to improve in 2012 as compared to 2011, including jobs, incomes, sales and even housing," said Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at Arizona State University's W.P. Carey School of Business.

McPheters, who made the prediction in early December at the 48th annual Economic Forecast luncheon, also cautioned that no sector would improve sharply until the national economy ramps up into faster growth.

The state lost 324,000 jobs from 2007 to 2010, and McPheters said only about 20 percent of those losses were restored by the end of the year.

The state gained nearly 24,000 jobs this year, and McPheters forecast 45,000 additional jobs next year. McPheters expects the state's unemployment rate to drop a half-percent to 8.5 percent in 2012, with the healthcare and manufacturing sectors showing job growth.

McPheters also forecasts that Arizona's population will rise 1.5 percent next year; personal income will increase 6 percent; and retail sales growth will have an 8 percent uptick. He also expects a 20 percent spike in single-family housing permits.

Elliott D. Pollack, president of Elliot D. Pollack and Company, said a big spike in permits doesn't mean a lot because permits took such a huge hit during the global recession.

On the local side, McPheters said this week that Prescott is weaker than the state as a whole right now.

"Prescott will continue to lose jobs for another year or so, whereas the state is probably going to add jobs at about 1 percent," he said.

Employment data from the Arizona Office of Employment and Population Statistics shows that the local unemployment rate was 11 percent in January and fluttered between 9 percent and 10 percent for the rest of the year.

The rate sat at 9.5 percent in September and October and fell to 9.1 percent in November.

While that seems positive, the fact is that the labor force shrunk due to people giving up looking for work.

Rick Van Sickle, labor market economist with the department, said the local unemployment rate is following a statewide trend. Van Sickle believes the local unemployment rate will fall gradually, but it will fluctuate along the way.

On the brighter side, single-family home permits rose in Prescott and Prescott Valley.

Prescott Valley staff issued 21 home permits in 2010 and 42 of them through the first 11 months of this year.

The City of Prescott issued 52 new home permits in 2010 and 82 through November.

With regard to sales tax revenue, PV saw a 7 percent increase in the fiscal year that began in July and Prescott saw a 6 percent spike in taxable activity compared to the same five months of 2010.

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