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While economic growth is likely to slow in 2019, Arizona is expected to rank among the top five states for job creation. Which local industries are booming? And with many possible outcomes for current U.S. trade disputes, what’s the potential disruption headed into 2019?
Top experts will deliver their predictions for the state and nation at the Valley’s largest and most trusted economic forecasting event on Wednesday, Nov. 28. About 1,000 people are expected to attend the 55th annual Economic Forecast Luncheon.
Regional, statewide and local forecasts will be presented by Lee R. McPheters, research professor of economics and director of the J.P. Morgan Chase Economic Outlook Center at Arizona State University's W. P. Carey School of Business, and editor of the Arizona and Western Blue Chip Economic Forecast publications.
Among McPheter's predictions:
• Although growth is expected to slow somewhat in 2019, Arizona will rank among the top five states for job creation in manufacturing, construction and professional and technical services as the economy adds some 75,000 new jobs.
• The Arizona unemployment rate will continue to decline during the year ahead, dipping below 4 percent for the first time in more than a decade.
• Phoenix will remain one of the nation’s most dynamic metro areas, accounting for eight out of every 10 new jobs created in the state.
• In spite of rising interest rates, strong demand will push single-family home permits in the Greater Phoenix area over the 25,000 mark in 2019; continuing job growth will spark some 6 million square feet of new industrial construction and vacancy rates in multifamily, office, retail and industrial space will remain low by historical standards.
The U.S. and global economic forecasts will be presented by Bart Hobijn, professor of economics at the W. P. Carey School of Business.
Among Hobijn's predictions:
• It is “all systems go” for the U.S. economy in 2019. Though growth is expected to slow a bit in 2019, the fundamentals will remain strong because of several temporary factors that have boosted it during this year dissipating.
• The unemployment rate is set to decline a bit further while wage and broader compensation growth will slowly accelerate.
• Job growth also looks to remain solid with about 170,000 jobs a month added to nonfarm payrolls in 2019.
• There are some wrenches that could be thrown into the forecast. First of all, stock market valuations are high compared to the underlying earnings levels and outlook. Second, the reorganization of global supply chains in response to trade disputes can negatively impact the economy. Finally, slowing global economic growth might be a drag on the U.S. economy.
Keynote speaker John H. Cochran will touch on health care, environment, taxes, financial regulation and U.S. housing. He’ll also discuss policies to support long-term growth, in each case highlighting a way out of the partisan divide. Cochrane is a professor of finance and economics, and the Rose-Marie and Jack Anderson senior fellow at the Hoover Institution at Stanford University. He maintains the Grumpy Economist blog.
The luncheon will be held from 11:15 a.m. to 1:15 p.m. Wednesday, Nov. 28, at the Phoenix Convention Center — North Ballroom. Registration required.