PHOENIX, ARIZONA--(Marketwire - June 18, 2012) - The Arizona economy continues to grapple through the housing crisis but progress is being made as the existing home supply is gradually reduced. Real GDP grew a modest 1.5 percent in 2011, consistent with the national average, as tourism expanded and construction grew. Growth should accelerate modestly in 2012 to 1.9 percent according to the State Monitor report released today by BMO Capital Markets Economics.
The Arizona labor market picked up early in 2012, with nonfarm payrolls up a solid 2.1 percent year-over-year in April, the fastest pace in four years. Still, employment has only recovered about a quarter of the job losses recorded during the recession. Construction employment is up almost 8 percent year-over-year but the level is still depressed at less than half peak levels. Meantime, leisure and hospitality continue to expand 2.5 percent year-over-year while government layoffs have ceased. The jobless rate was still high at 8.2 percent in April, but continues to gradually decline.
"Our sector experience, local knowledge and mid-market focus are all designed to help drive our clients' growth," said Steve Johnson, President, Arizona Region of M&I, a part of BMO Financial Group. "We are invested in their success, and we are continuing to help them navigate this uncertain economy."
Population growth remains weak, checking in at just 1.1 percent in 2011. That's down from peak growth of 3.3 percent in 2005 and 2006 at the height of the housing boom.
Home prices have been relatively stable since mid-2011. A sign that overbuilding in state is getting worked off. Indeed, the months' supply in Phoenix-Mesa-Scottsdale sat at just 2.9 in 2012 Q1, below the long-run norm of about 5.5 months.
"Impressively, existing sales have recovered the peak-to-trough decline seen during the recession," according to Sherry Cooper, Chief Economist, BMO Financial Group.
BMO Financial Group announced in 2011 that the company is making an additional $5 billion in business credit available to support the U.S. business-led recovery.
The full State Monitor report can be downloaded at www.bmocm.com/economics.
About BMO Financial Group
Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through over 650 branches and approximately 1,350 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion.