The Phoenix area’s labor market has yet to see the meteoric gains in employment that it experienced prior to the Great Recession. Total Nonfarm employment is still about a year away from the pre-bust high given current growth. High-paying jobs, however, are seeing moderate but solid growth in the area, amounting to sectors like finance, business services, education, health, leisure and hospitality approaching or exceeding their pre-bust levels. Construction sector jobs are still off almost 50 percent from their mid-2000s highs, but job gains in the sector have been strong this year. This sustainable rate of labor market improvement will provide the area a sub-5 percent unemployment rate by 2016.
The Phoenix housing market remains the slowest gainer in property values amongst major Western U.S. metro areas, but there is evidence of a changing tide. While retirees were once a boon to area real estate markets, they are still recovering from their recessionary losses. Canadians, the largest group of foreign buyers in the market, are priced out on currency fluctuations. Millennials and boomerang buyers are picking up the slack. Their entry to the market will fuel price gains of around 6 percent through 2016. The number of houses on the market as of March was 12 percent less than last year, and the number of sales was up 16 percent, placing more pressure on prices. Home permits increased over 40 percent this March from last year, along with demand and confidence. March condo sales spiked over 50 percent higher than their February number.
Phoenix is orienting itself as a job destination. The Greater Phoenix Chamber of Commerce announced its new development plan, “Phoenix Forward,” in an attempt to focus on the needs of existing area businesses, and to support their growth. The public-private initiative, “Velocity,” was also recently created to drive advanced industry growth in the region, further attesting to Phoenix’s dedication to its future.
Click here for the complete Phoenix Regional Economic Update: Phoenix 2015Q2.