The Arizona economy is poised to accelerate again in 2015, with real GDP expected to grow 2.8 percent,” according to the bi-annual U.S. State Monitor Report from BMO Economics.
“Arizona’s growth is ahead of the national average and has improved from 1.4 percent in 2014,” said Robert Kavcic, Senior Economist, BMO Capital Markets. “The ongoing housing market recovery, sturdy population growth and exposure to a wide range of high-tech manufacturing should all help drive above-average growth in the years ahead.”
The state continues to outperform on the job-growth front, with nonfarm payrolls rising a solid 2.2 percent year over year in the 2nd quarter. “All of the gains are coming from the service sector, led by professional & business services, education & health and tourism,” stated Kavcic. “The unemployment rate continues to fall, dipping below 6 percent at mid-year for the first time since the recession.”
“We continue to see positive job growth as the Arizona economy gains momentum,” said Tim Bruckner, Managing Director, Commercial Banking, Arizona, BMO Harris Bank. “We’re here to help support business owners as they hire new workers and invest in Arizona’s improving economy.”
The housing market recovery, which was running at an extremely hot pace in recent years, has settled into a more sustainable pace. “Prices in Phoenix were up 3.8 percent year over year in May, a significant downshift from 20 percent-plus growth earlier in the recovery,” noted Kavcic. “The cooler price momentum comes alongside a moderate increase in the months’ supply of homes available for sale. The good news is that the foreclosure rate has levelled off below 1 percent and is now among the lowest in America, though a still-elevated vacancy rate has also subdued the pace of price growth in recent months.”
An improved economy is driving stronger population growth, which is holding at a healthy 1.5 percent year over year pace. “That is still well below the 3.3 percent pace at the height of the housing boom, but twice the national average,” said Kavcic.
To view a full copy of the report, visit www.bmocm.com/economics.