1. BISBEE Economic Outlook 2015 Robert Carreira, Ph.D.

2. REAL GDP GROWTH (%)

3. JOBS United StatesArizonaCochise County Pre-Recession High 138.4 mil (Jan 08) 2.69 mil (Oct 07) 39,300 (Jun 08) Recessionary Low 129.6 mil (Feb 10) 2.37 mil (Sep 10) 33,900 (Jul 13) Recessionary Job Losses -8.7 mil -6.3% -313,500 -11.7% -5,400 -13.7% Current * 142.7 mil2.65 mil34,600 From High +4.3 million 3.1% -37,500 -1.4% -4,700 -12.0% From Low +13.0 mil 10.0% +276,000 11.7% 700 2.1% * October 2015

4. COCHISE COUNTY JOBS BY INDUSTRY Peak Current (Oct 2015) Change from Peak Change from Peak (%) Construction (incl. mining) 2,900 (Jun 2006) 1,100 -1,800-62.1% Manufacturing 900 (Oct 2008) 600 -300-33.3% Trade, Transportation, and Utilities 7,100 (Dec 2007) 6,100 -1,000-14.1% Information 700 (Mar 2011) 300 -400-57.1% Financial Activities 1,100 (Dec 2008) 900 -200-18.2% Professional and Business Services 6,200 (Jan 2010) 4,500 -1,700-27.4% Educational and Health Services 5,000 (Sep 2012) 4,600 -400-8.0% Leisure and Hospitality 4,300 (Apr 2008) 3,900 -400-9.3% Other Services 1,100 (Mar 2006) 1,000 -100-9.1% Federal Government 6,000 (Aug 2011) 5,000 -1,000-16.7% State and Local Government 7,700 (Jun 2008) 6,600 -1,100-14.3%

5. UNEMPLOYMENT Pre- Recession Low Recessionary High One Year Ago Current* United States 4.4% (May 2007) 10.0% (Oct 2009) 5.7%5.0% Arizona 3.7% (Jul 2007) 11.2% (Dec 2009) 6.6%6.1% Cochise County 3.5% (May 2007) 10.2% (June 2011) 8.1%7.4% Bisbee 3.7% (May 2007) 9.4% (Jun 2011) 7.4%6.8% * October 2015

6. LOCAL LABOR MARKET OUTLOOK Upside Bisbee: Tourism rebound Countywide Villages at Vigneto New hospital in Sierra Vista = healthcare jobs + economic development asset (businesses, retirees) Downside Bisbee: Conclusion of Freeport projects Countywide Government (federal, state & local) Population declines No sign of sustained job creation Much uncertainty

7. RETAIL SALES GROWTH BisbeeCochise CountyArizona 2015*1.0% 7.6%9.8% 2014-3.6% -1.0%1.9% 2013-2.3% 1.5%7.3% 2012-4.5% 4.5% 2.5% 20115.6% -1.2% 7.1% 20101.7% -4.8% -3.1% 2009-6.9% -4.2% -10.7% 2008-0.4% -6.5% -13.1% 20073.4% -1.3% 4.3% Inflation-adjusted to CPI-U *Jan-Sep

8. RESTAURANT & BAR SALES GROWTH BisbeeCochise CountyArizona 2015*12.4% 3.9%5.6% 20144.1% 1.4%7.3% 20138.3% -0.5%2.2% 201213.6% -4.4% 5.0% 2011-8.8% -0.2% 2.1% 20102.8% 0.0% 1.8% 2009-6.8% 0.3% -5.4% 2008-0.6% 0.2% -6.2% 2007-4.8% 0.1% -0.2% Inflation-adjusted to CPI-U *Jan-Sep

9. ACCOMMODATIONS SALES GROWTH BisbeeCochise CountyArizona 20152.5% 7.7%13.5% 201411.9% -0.6%9.9% 2013-10.8% -12.2%0.4% 20125.6% -17.2% 1.7% 2011-2.7% -13.1% 2.0% 2010-13.2% 8.3% 0.8% 2009-27.3% -9.0% -16.5% 200811.1% 1.0% -8.4% 200720.6% 19.7% 1.4% Inflation-adjusted to CPI-U *Jan-Sep

10. SALES OUTLOOK Retail Strong rebound countywide; modest growth in Bisbee Accommodation Countywide: End of hospital construction + Fort Huachuca lodging = trouble Bisbee: Continued strong performance on tourism rebound Restaurant & Bar Countywide: More establishments, but demand not expanding Bisbee: Continued strong performance on tourism rebound, but slower growth as Freeport activities wind down

11. HOME SALES Jan-Sep 2015 Cochise County: 1,200 (10.6%) Bisbee: 74 (10.4%)

12. MEDIAN HOME PRICE

13. FORECLOSURES (% OF SALES)

14. NEW HOME CONSTRUCTION (COCHISE COUNTY)

15. REAL ESTATE & CONSTRUCTION OUTLOOK Foreclosures Upward pressure on sales Downward pressure on prices Dampened demand for new construction Population declines = downward pressure on sales & new construction Villages at Vigneto

16. CONCLUSION Recession Kept out of 2008-09 recession by Fort Huachuca Cochise County recession began in 2011 Downside Government declines at all levels Population losses Freeport activities in Bisbee winding down Upside Improving state and national economies will help tourism Villages at Vigneto

17. THE END CochiseEconomy.com