Arizona real gross domestic product was up 3.2 percent in 2017, the highest reading since 2005. Stronger than expected nonfarm payroll gains in 2017 drove state economic activity. Following a large upward revision in Arizona job growth, the most recent estimates now show that Arizona added a net 58,500 jobs in 2017 versus the estimate of 35,000 jobs used in our February Arizona forecast. State job growth was solid through March as employment in the construction, manufacturing and services sectors continued to improve. Steady job growth and relatively high housing affordability and low business costs continue to draw people into the state. According to the official Census Bureau estimates, the Phoenix metropolitan area registered fourth in the nation for largest population growth in 2017, driven by strong gains in Maricopa County. Sustained population growth supports labor force growth which is a key determinant of potential state economic activity. This supports our expectations for a continued moderate expansion of the Arizona economy for the remainder of 2018. The growing Arizona population is also leading to increased demand for housing. Greater demand is keeping the inventory of available houses tight, boosting single-family home prices in Northern Arizona. The Case-Shiller Home Price Index for the Phoenix metropolitan area was up 6.3 percent for the year ending in February. The months’ supply of homes for sale ticked down to 2.3 months’ in March, according to the Arizona Regional MLS. The tight supply of housing will encourage more construction in both single- and multifamily projects in the region this year.
For a PDF version of this report click here: AZ-Outlook-0518.
The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.