1. Cochise College Center for Economic Research Cochise College CENTER FOR ECONOMIC RESEARCH Economic Outlook Sierra Vista, AZ

2. Cochise College Center for Economic Research What Happened Fed lowers interest rates Lower rates give rise to subprime mortgage market High default rates shake investor confidence Losses in derivatives further shake confidence Slowdown in housing & real estate spills over to other sectors TARP is introduced & modified People begin losing jobs or worrying about it Consumer and investment spending slows Economy ends up in recessi on

3. Cochise College Center for Economic Research U.S. Recessions Since 1945 PeakTroughDuration (Months) February 1945October 19458 November 1948October 194911 July 1953May 195410 August 1957April 19588 April 1960February 196110 December 1969November 197011 November 1973March 197516 January 1980July 19806 July 1981November 198216 July 1990March 19918 March 2001November 20018 December 2007?16+ and counting

4. Cochise College Center for Economic Research Gross Domestic Product Seasonally Adjusted Annual Rate

5. Cochise College Center for Economic Research GDP = Consumption Spending + Domestic Investment + Government Spending + Net Exports

6. Cochise College Center for Economic Research Inflation (CPI) Compared to same month previous year

7. Cochise College Center for Economic Research National Outlook Recovery possible in late 2009, early 2010 Some positive signs in early April Financial markets must improve Investor & consumer confidence must improve Fiscal stimulus will have impact

8. Cochise College Center for Economic Research The Local Economy How Cochise County and Sierra Vista are impacted

9. Cochise College Center for Economic Research Retail Trade & Commerce

10. Cochise College Center for Economic Research Retail Sales Growth Inflation adjusted; compared to same month previous year

11. Cochise College Center for Economic Research Retail Sales Recent Activity Cochise County retail market in recession since November 2007 2007: -1.3% 2007: -1.3% 2008: -6.5% 2008: -6.5% 2009 (Jan): -6.6% 2009 (Jan): -6.6% Sierra Vista retail market in recession since November 2007 2007: 2.6% 2007: 2.6% 2008: -6.6% 2008: -6.6% 2009 (Jan): -6.9% 2009 (Jan): -6.9%

12. Cochise College Center for Economic Research Restaurant & Bar Sales Growth Inflation adjusted; compared to same month previous year

13. Cochise College Center for Economic Research Restaurant & Bar Sales Recent Activity Cochise County restaurant & bar sales in recession since October 2007 2007: 0.1% 2007: 0.1% 2008: 0.2% 2008: 0.2% 2009 (Jan): -19.5% 2009 (Jan): -19.5% Sierra Vista restaurant & bar sales in recession since October 2007 2007: 2.9% 2007: 2.9% 2008: -2.0% 2008: -2.0% 2009 (Jan): -0.3% 2009 (Jan): -0.3%

14. Cochise College Center for Economic Research Accommodation Sales Growth Inflation adjusted; compared to same month previous year

15. Cochise College Center for Economic Research Accommodation Sales Recent Activity Cochise County accommodation sales in recession since April 2008 2007: 19.7% 2007: 19.7% 2008: -1.0% 2008: -1.0% 2009 (Jan): -8.2% 2009 (Jan): -8.2% Sierra Vista accommodation sales NOT in recession 2007: 21.1% 2007: 21.1% 2008: 19.4% 2008: 19.4% 2009 (Jan): 8.6% 2009 (Jan): 8.6%

16. Cochise College Center for Economic Research Sales Outlook County & city retail sales at or near bottom— recovery likely in late 2009 Restaurant & bar sales at or near bottom— recovery likely in mid-2009 Sierra Vista accommodation should continue above trend County accommodation at or near bottom— recovery likely in 2009 or early 2010

17. Cochise College Center for Economic Research Employment

18. Unemployment Rates * Jan-Feb only; seasonally adjusted

19. Cochise College Center for Economic Research Monthly Unemployment Rates Seasonally Adjusted

20. Cochise College Center for Economic Research Cochise County Monthly Nonfarm Job Growth Compared to same month previous year

21. Cochise College Center for Economic Research Cochise County Nonfarm Job Gains/Losses By Industry 12 months ending Feb 2009

22. Cochise College Center for Economic Research Cochise County Nonfarm Job Growth By Industry 12 months ending Feb 2009

23. Cochise College Center for Economic Research Employment Outlook Expect continued job losses & rising unemployment through 2009 County and city will fare better than state and nation County and city will begin to recover before state and nation

24. Cochise College Center for Economic Research Housing, Real Estate, & Commercial Construction

25. Cochise College Center for Economic Research New Home Construction Single Family Residential Building Permits

26. Cochise College Center for Economic Research New Home Construction—Sierra Vista Single Family Residential Building Permits

27. Cochise College Center for Economic Research Recent SFR Permit Activity Cochise County 2008: 404 (-14.4%) 2008: 404 (-14.4%) 2007: 472 2007: 472 Sierra Vista 2009 (1 st Qtr): 24 (-53.8%) 2009 (1 st Qtr): 24 (-53.8%) 2008: 199 (11.8%) 2008: 199 (11.8%) 2007: 178 2007: 178

28. Cochise College Center for Economic Research Existing Home Sales—Sierra Vista Area

29. Cochise College Center for Economic Research Median Home Price (Site Built)

30. Cochise College Center for Economic Research Median Home Price (Site Built) Cochise County 2004: $150,000 2005: $186,000 (24.0%) 2006: $205,250 (10.3%) 2007: $206,579 (0.6%) 2008: $195,000 (-5.6%) Sierra Vista Area 2004: $162,500 2005: $199,900 (23.0%) 2006: $216,713 (8.4%) 2007: $217,479 (0.4%) 2008: $209,500 (-3.7%)

31. Cochise College Center for Economic Research New Commercial Construction—Sierra Vista

32. Cochise College Center for Economic Research Outlook New residential construction likely at or near bottom (county & city) Existing home sales approaching bottom Home prices should continue to hold or decline modestly Commercial construction remains relatively strong

33. Cochise College Center for Economic Research Conclusion Based on historical trends, most of the recession is probably behind us The economic stimulus package will have an impact on the economy There have been some signs that we’re at the bottom Employment probably won’t improve until late 2009 or early 2010

34. Cochise College Center for Economic Research