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Posted Oct 22, 2020, 1:30 AM
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Join Date: Jan 2010
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Cherry Economic outlooks for the metro:
https://www.bizjournals.com/phoenix/...ok-like-a.html
Quote:
“Foreign companies lost six months of business from the pandemic. First, from closures in home countries, then from disruptions in trade with the U.S.” Christine Mackay, director, Phoenix Community and Economic Development.
“Our members in Arizona said that although exports were hard to ship, they found ways to pivot their products to get them shipped.” said Doug Bruhnke, president and CED of the Global Chamber
“We believe there will be a shift toward more localized, regional hubs for manufacturing across all industries.” Sandra Watson, president and CEO, Arizona Commerce Authority
Federal policy severely damaged exporting opportunities before the coronavirus migrated into the United States. Despite the policy disruption, Arizona modestly stayed on course over the last several years, shipping exports valued around $19.5 billion per quarter, sometimes shipping more, sometimes shipping less. The impact of the pandemic on the state’s exports was marginal in total trade dollars, but individual commodities reacted differently.
“Our members in Arizona said that although exports were hard to ship, they found ways to pivot their products to get them shipped,” said Doug Bruhnke, president and CED of the Global Chamber, based in Phoenix. “My conversations leave me with the impression that exports didn’t take the same hit as the overall market.”
The numbers from the U.S. Census Bureau for the first seven months of 2020 reflect Bruhnke’s perception.
Some commodities showed severe declines. When the pandemic shut down customs and borders between the U.S. and the world, consumer exports from Arizona took a big hit. Overall, the consumer-oriented product exports dropped in half from March to April and a little less in May. Vehicle parts dropped almost 70 percent in the first month of the health emergency.
There’s a shift in the wind. While June export values were close to March levels, global companies realized that diversification is necessary to maintain a consistent flow of goods to customers. The pandemic has created an uptick in foreign direct investment interest.
“Foreign companies lost six months of business from the pandemic,” said Christine Mackay, director, Phoenix Community and Economic Development. “First, from closures in home countries, then from disruptions in trade with the U.S.”
Mackay said that foreign companies are looking at Phoenix more than ever as a base for U.S. or North American operations. FDI will be significant for greater Phoenix because the metro saw a 20 percent decline in export values in the first half of 2020 compared to a year earlier. She says that the Valley has the workforce companies need and significantly less cost than coastal areas.
Bruhnke agrees, “Our international members are telling us that the market stumbled, but that they are seeing opportunity in the U.S. next year.”
2021 could be a good year for global trade in Arizona when combining FDI opportunities with increased manufacturing activity in Phoenix.
“There is a significant opportunity to pursue opportunities in manufacturing as companies look to re-shore some operations,” said Sandra Watson, president and CEO of the Arizona Commerce Authority. “As we know, the weaknesses in any empire are exposed during a crisis, and the pandemic has certainly exposed supply chain gaps, which has become a matter of national security. We believe there will be a shift toward more localized, regional hubs for manufacturing across all industries.”
Arizona has strength in global trade, despite the less-than-U.S.-average share of the state’s gross domestic product based upon international trade. Arizona is one of only nine states Census data show to have a positive balance of trade. This means Arizona is exporting goods and services with greater values than it imports.
Despite the dismal pandemic numbers, Arizona was still outperforming the national average for the products with less of a hit than elsewhere in the nation. Minerals and ores actually increased 5 percent in April over March. Arizona’s biggest export, computer and electrical products, dropped just 35 percent in April, where nationally it dropped by almost half.
Strong trade relations developed between Arizona and its partners, Mexico, Canada and China, helped hold total state exports at reasonably healthy levels. Exports to Mexico and Canada dropped 35 percent in April compared to March, and a little more in May. By July, trade with the state’s North American partners was close to equaling March numbers. Exports to China dropped over 10 percent in April and May, but by June, they were higher than March, showing a rapid return to pre-pandemic volume. The export values were still better than most U.S. states.
Overall, Arizona exports for the first seven months of 2020 came in at $11.7 billion, compared to $14.2 billion for the same period in 2019 and $13.0 billion in the first seven months of 2018. The first quarter of 2020 reflected a slowdown, with exports dropped nearly 10 percent compared to the same quarter in 2019. Tourism is considered an export industry and its lagging numbers in the first quarter hurt the state’s overall export volume.
Micah Miranda, economic development director for Chandler, says that his city sees increased interest from foreign companies wanting to build or take facilities in the southeast Valley. Mackay noted that Phoenix has a strong pipeline for foreign direct investment from companies in manufacturing and production. Watson says the state has closed deals with some significant FDI projects, and more announcements are coming soon.
Without exporting, the Arizona economy cannot be sustained.
In 2019, export GDP share was 6.7 percent. The average of all other states is closer to nine percent. In 2007, it was under 6 percent but rose to 7.1 percent in the final year of the last administration. The share has been in decline since but leveled off over the past few quarters.
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https://www.bizjournals.com/phoenix/...rong-2021.html
Quote:
By Eric Jay Toll, special to the Phoenix Business Journal
(Companies) now put Arizona on the shortlist, and we’re competing as a top tier market.” Christine Mackay, director, Phoenix Community and Economic Development
“Our pipeline (of new development projects) is the most robust I’ve seen in years.” Chris Camacho, president and CEO, Greater Phoenix Economic Council
“Notably, all of the (new businesses coming to Arizona) won in this year come from California.” Sandra Watson, president and CED, Arizona Commerce Authority
Despite the pandemic’s devastating impact on some business sectors, Arizona saw many new businesses open during the second quarter of 2020. That number, nearly 20,000, was higher than any western state other than Colorado, according to Federal Reserve Economic Data from the Federal Reserve Bank of St. Louis, which publishes the quarterly national economic results.
If the thought is that construction, retail and tourism are driving the state’s economy, the idea is 13 years out-of-date. Today, advanced industries – manufacturing, technology, bioscience healthcare, and business and financial services – are where Arizona jobs are based. In fact, Arizona has more financial services jobs than Wall Street.
The way businesses around the world look at Arizona has also changed.
“Arizona is a top-tier business destination today, and that’s something new,” said Christine Mackay, director, Phoenix Community and Economic Development. “More years ago than I want to admit, companies would come here because it was cheap to do business. Not anymore; they put Arizona on the shortlist, and we’re competing as a top-tier market. We’re winning more new business than we see head to other locations.”
While the economy stumbled due to the pandemic, economic developers see 2021 as a year for with strong potential.
“Our pipeline (of interested companies) is the strongest I’ve seen in years,” said Chris Camacho, president and CEO of Greater Phoenix Economic Council, in an interview this spring. “Companies are still planning expansions, and we are seriously competing for those expansions.”
Bringing in those expanding facilities, regional offices and relocating headquarters takes time. At the same time, the new jobs are coming, local business is growing.
“We’re seeing many new businesses opening in the prime employment sectors, for example, around the Chandler Air Park,” said Micah Miranda, Chandler Economic Development director. “Developers are building spec office space, and we see a lot of activity from local businesses.”
There’s a lot of anticipation among the professional economic developers that 2021 will be a strong year.
“During FY 20, we worked 133 projects with companies that committed to creating 24,865 new Arizona jobs at an excellent average wage of just over $68,000 and investing $15.1 billion in capital into our communities,” said Sandra Watson, president and CEO of the Arizona Commerce Authority. “The technology and innovation industry led the way substantially in terms of both projects and jobs. At just over a month into Fiscal Year 2021, we were off to a strong start with commitments from 18 companies to create 5,059 new jobs for Arizonans. Notably, nearly all of the attraction projects won in this fiscal have come out of California. Technology and manufacturing continue to be two areas of strength for Arizona.”
When the dust settled as the second quarter ended, June 30, 2020 – also the first quarter for the pandemic – Arizona saw a net increase of nearly 20,000 new businesses, according to FRED.
There’s no question, economists are saying, that Arizona’s accelerating growth put on the emergency flashers in 2020. However, the local economy didn’t crash.
The 19,830 new businesses opening turning on the lights in the second quarter 2020 were just 145 fewer than the number formed in the first quarter and almost 3,000 more than those starting in the last quarter of 2019—a record-setting year for new business starts.
In the first six months of 2019, a record number, 40,856, new businesses formed in Arizona. For the year, the Bureau of Economic Analysis reported that Arizona led the U.S. in state gross domestic product growth. Despite the pandemic impact in the first half of 2020, Arizona saw 39,805 new businesses form, the second-highest number of formations over the first six months of a year since 2005.
“Despite the pandemic challenges, we’ve had some big wins from an economic development perspective . . . This momentum is a big strength heading into (2021),” said Sandra Watson, president and CEO of Arizona Commerce Authority, the state’s economic developer. “A lot of eyes are on Arizona as a result of a high-profile (foreign direct investment) project with Taiwan Semiconductor Manufacturing Company and the fact that our state now has not one, but two, next-gen automotive OEMs. This is a very exciting time to be leading economic development efforts in Arizona. I am extremely confident that Arizona will lead the nation in economic growth as we continue to recover from the pandemic.”
The economic growth in Arizona is coming from multiple directions, both internally and from outside companies. This is a healthy formula for good financial news going into 2021.
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https://www.bizjournals.com/phoenix/...o-economi.html
Quote:
Resilience and recovery - these are two words we’ve heard a lot throughout 2020, a year that has tested all of us in ways we previously never would have imagined.
There is no question that the COVID-19 pandemic has had significant impacts on our economy, not just in Arizona but worldwide. As we continue to cautiously navigate each day, prioritizing public health above all else, there are positive indicators for our state’s future.
Following the lessons learned during the 2008 recession, the Arizona Commerce Authority was laser-focused on diversifying our state’s economic base. Today, that effort has paid off and Arizona has significant strengths across several high-growth industries including business and financial services, technology and innovation, bioscience and health care, aerospace and defense, and advanced manufacturing.
In addition, under the pragmatic leadership of Governor Ducey, our state is on very stable financial footing. Due to his responsible management, Arizona has consistently benefitted from a structurally-balanced budget that makes targeted investments in key areas such as education and families, increased the balance in the rainy day fund to a record high of $1 billion, and seen our credit rating upgraded twice by Moody’s to Aa1.
Arizona also offers one of the best environments in the nation for both companies and individuals. Top talent, streamlined regulation, and affordable costs allow businesses to start and scale quickly. Plentiful job opportunities mean people can find a fulfilling career quickly, and thanks to first-in-the-nation occupational licensing reform implemented by Governor Ducey, those with a professional license in good standing in any other state can simply transfer it to Arizona when they move here. Vibrant communities, year-round outdoor activities, and affordable living costs draw and retain new residents.
Prior to the pandemic, Arizona led the nation in economic and population growth. Over the past year, our state was consistently ranked among the top five for economic momentum by State Policy Reports, which takes into account measures of personal income, employment, and population growth. This momentum, combined with a substantially-diversified economy, fiscal stability, and attractive value proposition, has helped Arizona weather the storm during the pandemic.
Despite economic headwinds, the level of interest in investing in Arizona has not declined. While there was a period during which some companies paused their plans, activity has resumed and economic development opportunities are on the rise. Not only does our momentum remain strong, the projects we’re working currently represent more jobs than roughly the same number did a year ago - an indicator of the quality and size of companies looking to Arizona as a location for growth. For evidence of our state’s ability to land global, industry-leading companies and continue to grow them: look no further than Taiwan Semiconductor Manufacturing Corp’s selection of Phoenix for a $12 billion U.S. factory, and Raytheon’s choice to locate the headquarters of its newly integrated Missiles & Defense business at its Tucson site. These announcements further elevated Arizona’s profile on the world stage, and I am confident we’ll be sharing more big news in the coming months.
As we consider what lies ahead, it is undeniable that we still face uncertainty. Yet from it’s earliest days, Arizona has been a place shaped by leaders with a pioneering spirit and fierce determination. Throughout the pandemic, the agility, tenacity, and compassion demonstrated by Arizonans have been remarkable. Businesses and their employees have pivoted, innovated, and served our communities when we needed it most. This gives me incredible confidence that together, we’ll leverage our strengths, keep moving forward, and Arizona will once again lead the nation in economic growth.
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