PHOENIX — Job growth and home prices are slowly rebounding, but the state has a long way to go and automatic federal budget cuts aren't helping, some of Arizona's top business experts said Thursday.
Four faculty members from the W.P. Carey School of Business at Arizona State University delivered their latest forecasts at an annual economic outlook luncheon.
They said Arizona has gained back nearly 40 percent of the 314,000 jobs that were lost during the recession, but that pace is well behind the nation as a whole.
Arizona is projected to add 61,000 jobs this year. The fastest growing industries are expected to be construction, wholesale trade, information, state government, and leisure and hospitality. In 2012, the state added nearly 49,000 jobs.
"Last year, we finally bounced back to No. 8 for employment growth and No. 7 for population growth," said research professor Lee McPheters. "However, the sequester and other factors have been clouding the economy here in recent months, and the year-over-year job growth ranking issued in March dropped Arizona down to No. 13. The state will have to wait a couple more years for full recovery."
Still, the forecasts show Arizona is doing better than most states. The rate of population growth has inched up to 1.3 percent, and personal income is expected to increase by more than 5 percent this year and 6 percent in 2014.
Economics professor Dennis Hoffman said the economy is being helped along by real estate and stock market recoveries, as well as low fuel prices and business innovations. Still, he said the national debt crisis, political squabbling in Washington and economic difficulties abroad are resulting in uncertainty.
Hoffman said on the state level, Arizona could be affected by decisions that have yet to be made on possible Medicaid expansion, the loss of a temporary sales tax increase, and the potential taxing of online sales.
As for the housing market, the experts said the median home price in the Phoenix area is up 58 percent to $175,000, and foreclosures dropped 60 percent between March 2012 and March 2013.
Mike Orr, director of the business school's Center for Real Estate Theory and Practice, said he expects foreclosure rates to dip below long-term averages by the end of next year.
The experts did say there is a chronic shortage of homes for sale now that there is no flood of cheap foreclosures and short sales.