The Arizona labor market has begun to show some signs of improvement in recent months, although overall growth remains modest and home prices continue to fall, according to the State Monitor report released Nov. 17 by BMO Capital Markets Economics.
The Arizona labor market has picked up recently, with four straight quarterly gains, lifting employment 1.7 percent above year-ago levels in the third quarter. Still, payrolls are a deep 10 percent below pre-recession levels. Manufacturing and construction led the pack with more than a 3 percent increase year-over-year, but after peaking at more than 9 percent of nonfarm payrolls at the height of the 2006 boom, construction now makes up just 4.6 percent of total employment.
According to Steve Johnson, President, Arizona Region of M&I, a part of BMO Financial Group, “We are invested in our clients’ success, and we are continuing to help them navigate this uncertain economy. We provide an unparalleled combination of sector expertise, local knowledge and mid-market focus, all designed to help drive our clients growth.”
The Arizona economy continues to grapple with a depressed housing market. Home sales are continuing to chip away at the housing supply, up 9.2 percent year-over-year in the second quarter. Months’ supply in Phoenix dropped to levels essentially similar to before the downturn – three months in quarter two. Construction activity is extremely quiet, with little sign of momentum.
“The pace of price declines does not appear to be mellowing. Housing starts have averaged fewer than 13,000 through August and are not gaining traction. This compares to peak activity of about 85,000 in 2006,” Robert Kavcic, an economist for BMO Capital Markets, said in a written statement.