COCHISE COLLEGE Center for Economic Research Economic Review & Outlook Douglas, AZ

Cochise College Center for Economic Research United States Real GDP Growth Real GDP Growth 2005: 3.1% 2005: 3.1% 2006: 2.9% 2006: 2.9% 2007: 2007: 1 st Qtr: 0.6% 1 st Qtr: 0.6% 2 nd Qtr: 4.0% 2 nd Qtr: 4.0%

Cochise College Center for Economic Research United States Consumer Price Index Consumer Price Index 2005: Up 3.4% 2005: Up 3.4% 2006: Up 3.2% 2006: Up 3.2% 2007: 2.5% (Jan-Jul) 2007: 2.5% (Jan-Jul) Energy prices up 21.3% (SAAR) in first 7 months of 2007 Energy prices up 21.3% (SAAR) in first 7 months of 2007 Petroleum-based energy up 36.9% Petroleum-based energy up 36.9%

Cochise College Center for Economic Research Interest Rates Federal Funds Rate Federal Funds Rate Increased 25 basis points each meeting from June 2004 to June 2006 Currently 5.25% Mortgage Rates Mortgage Rates 2004: 5.84% 2005: 5.87% 2006: 6.58% Jul 2007: 6.77%

Cochise College Center for Economic Research Real GDP Growth Rates Arizona’s GDP grew by 6.8% in 2006 Arizona’s GDP grew by 6.8% in rd fastest growing state (economically) in the nation 3 rd fastest growing state (economically) in the nation

Cochise College Center for Economic Research

The Local Economy

Cochise College Center for Economic Research Population Douglas Douglas 2006 Population: 17,660 Up 2.7% from 2005 Up 23.4% since 2000 Average 1.2% per year since 2001 Cochise County Cochise County 2006 Population: 135,150 Up 2.5% from 2005 Up 14.8% since 2000 Average 2.3% per year since 2000

Population Projections In 2011 Douglas: 18,543 (Avg. 1% per year) Cochise County: 152,107 (Avg. 2.3% per year)

Employment

Cochise College Center for Economic Research Unemployment Rate 2006 U.S.: 4.6% U.S.: 4.6% Arizona: 4.1% Arizona: 4.1% Cochise County: 4.5% Cochise County: 4.5% Douglas: 7.1% Douglas: 7.1% Jan-Jul 2007 U.S.: 4.7% U.S.: 4.7% Arizona: 3.8% Arizona: 3.8% Cochise County: 4.2% Cochise County: 4.2% Douglas: 6.6% Douglas: 6.6%

Cochise College Center for Economic Research Douglas Employment, 2006 Civilian Labor Force: 6,012 Civilian Labor Force: 6,012 New Jobs: 126 New Jobs: 126 Job Growth: 2.3% Job Growth: 2.3% Top 5 Employers (FTE Employment) Top 5 Employers (FTE Employment) Arizona Department of Corrections (651) Arizona Department of Corrections (651) Douglas Unified School District (541) Douglas Unified School District (541) Douglas Border Patrol Station (471) Douglas Border Patrol Station (471) Wal-Mart (339) Wal-Mart (339) Cochise College (223) Cochise College (223) City of Douglas (222) City of Douglas (222)

Cochise College Center for Economic Research Cochise County Non-Farm Employment ,675 jobs 36,675 jobs 1,525 new jobs 1,525 new jobs Annual job growth: 4.3% Annual job growth: 4.3% Goods Producing: 4.5% Goods Producing: 4.5% Private Service- providing: 4.1% Private Service- providing: 4.1% Government: 4.6% Government: 4.6% ,700 jobs 1,025 new jobs Annual job growth: 2.8% Goods Producing: 4.3% Private Service- providing: 3.4% Government: 1.7%

Cochise College Center for Economic Research Cochise County Job Creation/Growth, No. of New Jobs No. of New Jobs Professional & business services: 450 Professional & business services: 450 Government: 200 Government: 200 Trade, transportation & utilities: 200 Trade, transportation & utilities: 200 Mining & construction: 150 Mining & construction: 150 Financial activities: 25 Financial activities: 25 Leisure & hospitality: 25 Leisure & hospitality: 25 Other services: 25 Other services: 25 Education and health services: 0 Education and health services: 0 Information: 0 Information: 0 Manufacturing: -25 Manufacturing: -25 Job Growth Rate Job Growth Rate Professional & business services: 10.4% Mining & construction: 5.7% Trade, transportation & utilities: 3.1% Financial activities: 2.5% Other services: 2.5% Government: 1.7% Leisure & hospitality: 0.6% Education and health services: 0% Information: 0% Manufacturing: -2.9%

Cochise College Center for Economic Research County Job Growth Trends in 2007 Slowed job growth each month since the beginning of the year Slowed job growth each month since the beginning of the year Negative job growth in June (-0.3%) and July (-0.4%) Negative job growth in June (-0.3%) and July (-0.4%) Job losses by industry (July comparisons) Job losses by industry (July comparisons) Other Services: -7.3% Other Services: -7.3% Financial Activities: -7.1% Financial Activities: -7.1% Information: -5.6% Information: -5.6% Federal Government: -4.0% Federal Government: -4.0% Construction: -2.7% Construction: -2.7% State and Local Government: -1.5% State and Local Government: -1.5% Leisure & Hospitality: -0.6% Leisure & Hospitality: -0.6%

Cochise College Center for Economic Research Average Annual Wage Comparisons, 2006

Cochise College Center for Economic Research Average Hourly Wage Comparisons, 2006

Cochise College Center for Economic Research Employment Outlook Continued slowing of job growth Continued slowing of job growth Rising unemployment Rising unemployment More job losses in financial activities and construction countywide More job losses in financial activities and construction countywide

Local Sales Retail Sales Restaurant and Bar Lodging Wholesale Trade Manufacturing Construction

Cochise College Center for Economic Research Douglas Sales Tax Revenue by Industry Group

Cochise College Center for Economic Research Douglas Retail Sales Tax Revenue FY FY $3.6 million Up 5.2% (follows strong growth of 9.5% in 05-06) Real, inflation- adjusted growth of 2.6%

Cochise College Center for Economic Research Douglas Restaurant & Bar Sales $13 million $13 million Up 8.3% Up 8.3% Real, inflation-adjusted growth of 5.1% Real, inflation-adjusted growth of 5.1% Jan-May 2007 Jan-May 2007 $5.3 million $5.3 million Down 0.5% Down 0.5% Real, inflation-adjusted growth of -3.2% Real, inflation-adjusted growth of -3.2%

Cochise College Center for Economic Research Sales Outlook Slowing of retail sales Slowing of retail sales Continued slowdown of restaurant & bar sales Continued slowdown of restaurant & bar sales Potential interest rate cuts in late 2007 may help along sales Potential interest rate cuts in late 2007 may help along sales

Housing & Real Estate

Cochise College Center for Economic Research Cochise County New SFR Construction Jan-Jun 2007: Permits were down 56.7% (from 619 to 268) Jan-Jun 2007: Permits were down 56.7% (from 619 to 268)

Cochise College Center for Economic Research Douglas New SFR Construction 2006: 66 permits 2006: 66 permits Down 18.5% from 81 in 2005 Down 18.5% from 81 in 2005 Despite the decline, more permits were issued in 2006 than in combined Despite the decline, more permits were issued in 2006 than in combined Jan-Aug 2007: 30 permits Jan-Aug 2007: 30 permits Down 33.3% from 45 in Jan-Aug 2006 Down 33.3% from 45 in Jan-Aug 2006

Cochise College Center for Economic Research MLS Home Sales, Jan-Aug 07 Cochise County Cochise County 989 homes sold 989 homes sold Down 8.3% from last year Down 8.3% from last year Median price: $195,000 Median price: $195,000 Up 3.1% Up 3.1% Douglas Douglas 72 homes sold Up 26.3% from last year Median price: $84,000 Down 12.5%

Cochise College Center for Economic Research Douglas Housing Affordability Index

Cochise College Center for Economic Research Outlook Countywide home sales will continue to slow Countywide home sales will continue to slow In Douglas, home sales should remain steady In Douglas, home sales should remain steady Continued slowdown of construction countywide, including Douglas Continued slowdown of construction countywide, including Douglas Stabilization of prices at both the county and city level Stabilization of prices at both the county and city level

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Cochise College Center for Economic Research