Flagstaff can expect continued modest economic growth in the next year, local economists predicted at the 42nd annual Northern Arizona University Economic Outlook Conference Thursday morning.
Flagstaff experienced a lower rate of job growth than the state's for the year through September 2017: 0.6 percent compared to the state’s 1.25 percent, NAU economist Ron Gunderson said.
“Flagstaff is in for a reasonably good year,” Gunderson said.
However, he added that the threat of increasing the fee to visit the Grand Canyon to $70 per vehicle could deter tourism in northern Arizona, and a shortage of construction workers has created problems for developers.
“Flagstaff should experience growth consistent with the nation’s economy,” Gunderson said.
Nationwide, consumer confidence continues to increase, Gunderson said, approaching the most recent highest point, which was recorded in December 2000.
Gunderson and the other two economists featured in the panel discussion, Dennis Foster and Elliott Pollack, all said the nation is experiencing a slow recovery from the latest economic recession.
“There were a lot of people who were unemployed longer than they had to be because of the crappy recovery,” Pollack said.
Pollack said in Arizona, 88 percent of job creation has happened in the greater Phoenix area, and Arizona ranked 12th in employment growth in 2017, with nearly all counties slowing down in employment growth over the last year.
“Employment growth has been abysmal in this cycle, but that’s true nationally,” he said.
Slow population growth in Arizona has also hindered faster economic recovery, the panelists said.
Pollack said the cost of rent in Arizona is increasing at two-and-a-half times the rate of inflation, meaning there is an imbalance of supply and demand illustrating a need for new multifamily housing.
The effects of the slow growth are particularly noticeable in non-metro areas, he said.
Both Gunderson and Pollack expressed worry about President Donald Trump’s desire to leave the North American Free Trade Agreement.
“If we really want a Depression, we’ll get out of all these trade agreements,” Gunderson said, adding that Mexico is Arizona’s top trade partner.
Pollack said he “certainly wouldn’t fool around with NAFTA,” and said the country should “make it easier to get people with skills into this country, because we need them.”