Phoenix employment growth is on the right track, gaining ground in the services industries over the past few years. However, area employment has still not recovered to pre-recession levels. The primary culprit has been construction employment. The decline in construction employment made up about a third, or 80,000 jobs, of the total jobs lost in Phoenix from July 2007 to September 2010. Jobs in the construction sector have since regained only 10,000 jobs. This leaves plenty of upside potential to area labor markets once the housing sector rebounds, yet it is tempering the region’s current recovery.
Growth in Phoenix’s housing market relies partly upon economic conditions outside of Arizona. Underwater homes and the collapse of financial markets during the Great Recession has limited the ability of out-of-staters to buy homes in Arizona. Fortunately, household wealth is now increasing across the U.S. The Case-Shiller 20-City Home Price Index was 24 percent above its recession lows in September. Financial markets have improved, helping investors recover losses. This supports a strengthening Phoenix housing market as the overall U.S. economy improves next year.
Phoenix tourism will get a nice boost as the area is set to host this season’s Super Bowl at the University of Phoenix Stadium. The Arizona Cardinals led the NFC West with a record of 11-3 in week 15, clinching their playoff spot. This brings about an interesting discussion regarding the economic impact of the Super Bowl in Phoenix. If two outside teams make it to the Super Bowl, the economic impact is expected to match that of the 2008 Super Bowl played in Glendale, AZ, of around $500 million, as 90,000 fans pour into the metro area. It is less clear if the economic impact will be as strong if the home team makes it all the way to the big game. Either way, the city will be electrified come February 1.
Click here for the complete Phoenix MSA Regional Economic Update:Phoenix 2014Q3.