Ariz. economy continues to mend - Ahwatukee Foothills News: Money

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Ariz. economy continues to mend

Print
Font Size:
Default font size
Larger font size

Related Stories

Posted: Saturday, November 16, 2013 7:45 am

Arizona’s economy continues to mend, spurred largely by people buying cars and parts. Newly released figures from the Department of Revenue show retail sales reported to the state in September topped $4.2 billion. That reflects purchases made in August.

The last time August sales were that high was in 2007, prior to the recession.

Driving much of that was more than $666 million in sales of new and used cars. That’s 16 percent above what it was a year ago — and 60 percent higher than in 2010 when, in the words of economist Dennis Hoffman of Arizona State University, “seemingly, nobody wanted a car.”

Economist Elliott Pollack said the boom in car sales is not surprising, what with Arizonans having hunkered down during the recession and opted to keep what they had running.

“The average auto is now ancient,” he said. “There’s a point where they almost have to” replace it.

And Pollack said that situation has forced consumers to go into debt for a new car or truck even as they are spending less on other items — and even working to pay off credit cards.

But that raises the obvious question: How long can this double-digit year-over-year increase in auto sales continue?

Hoffman said he sees no sign of sales leveling off, at least for the near future.

“What you’ve got going here is historically low automobile loan interest rates,” he said. That, in turn, creates an opportunity for people to buy new cars that may get up to 15 miles more per gallon than what they are currently driving.

“You’re mixing fuel efficiency with really low interest rates,” Hoffman said. “I think it’s a catalyst for people continuing to purchase automobiles.”

Pollack said cars and trucks became a priority because of that aging fleet. But he believes that as the economy improves — and with it, employment and income — people will loosen the grip they have on their wallets.

“There’s pent-up demand for other things,” he said.

Hoffman said it used to be that consumer spending was tied to people moving to the state.

“Historically, we’ve had 50,000 to 60,000 new entrants rolling into the state,” he said. “They buy a car, they buy a house, they buy furniture.”

That inflow slowed to a trickle during the recession, at least in part because people elsewhere were “upside down” on their mortgages, could not sell their homes and, therefore, were unable to migrate.

Hoffman said that is beginning to change. But he said that, for the foreseeable future, any increase in consumer spending in Arizona, of all types, is more likely to be tied to how people feel about what’s happening in the economy.

“People make decisions like this based on job security,” he said.

The new report also shows a nearly 24 percent increase in the value of residential construction this year versus the same period a year earlier.

That, however, is still less than a third of housing activity in 2006, before the real estate bubble burst.

Pollack said that year-over-year increase is only partly due to increased construction. He said the number of permits is only about 8 to 9 percent higher than it was a year earlier.

“The rest would be prices,” he said.

But Pollack said he is not worried about creating another real estate “bubble,” where prices went up to unsustainable levels.

“It’s like if you were a retailer or a manufacturer and you found yourself with excess inventory,” he said. “The first thing you’d do is put it on sale.”

Pollack said what buyers had been paying represented those sale prices.

“And now that that excess inventory is getting whittled down, prices are going back up,” he said. “But they’re still way below the previous peak.”

More about

More about

More about

  • Discuss

Gov. Brown Appoints New Public Utility Commissioners to Replace Florio and Sandoval

Martha Guzman Aceves and Clifford Rechtschaffen both come from the governor’s office with strong environmental protection backgrounds. Martha …

Published: December 31, 2016 - 10:14 am @ https://www.greentechmedia.com/articles/read/gov.-…

Obama preparing to penalize Russia for hacking

WASHINGTON — The Obama administration is preparing to penalize Russia over the hacking of Democratic officials during this year's presidential…

Published: December 31, 2016 - 10:16 am @ http://www.usatoday.com/story/news/politics/2016/1…

Kerry’s Blunt Words for Israel Denounced by Lawmakers in Both Parties

A bipartisan chorus of lawmakers, upset with President Obama’s decision last week to allow the passage of a United Nations resolution condemni…

Published: December 31, 2016 - 10:14 am @ http://www.nytimes.com/2016/12/28/us/politics/john…

Mail truck tips on Mesa street

MESA, Ariz. - A mail truck ended up on its side in a crash Wednesday. Mesa police say a single-vehicle collision left the United States Postal…

Published: December 31, 2016 - 10:12 am @ http://www.12news.com/news/local/valley/mail-truck…

Reports of mall disturbances light up social media

A flurry of reports of mall melees and disturbances rippled across social media Monday on a day Americans swarmed shopping hubs for post-holid…

Published: December 31, 2016 - 9:51 am @ http://www.usatoday.com/story/news/nation/2016/12/…

Graham, McCain want Russia sanctions after election hacking

Top Republican senators said Wednesday that the incoming Congress and President-elect Donald Trump should impose new and tougher sanctions on …

Published: December 31, 2016 - 9:13 am @ http://www.foxnews.com/politics/2016/12/28/graham-…

Immigration Is the Only Hope for States That Helped Trump

The decline of manufacturing does not explain the decline of Wisconsin. Photographer: Daniel Acker/BloombergFacebook Twitter Email Print Share…

Published: December 31, 2016 - 7:17 am @ https://www.bloomberg.com/view/articles/2016-12-28…

Creator of the Red Solo Cup dies at 84

FOX 32 NEWS - The creator of the Red Solo Cup died on Wednesday, December 21, 2016 at the age of 84. Robert Leo Hulseman lived in Northfield, …

Published: December 31, 2016 - 7:07 am @ http://www.fox4news.com/trending/225996868-story

12 Cars You Can Legally Import to the US in 2017

slide-4320347 There were plenty of great vehicles produced abroad that Americans (outside of Canada) haven't been able to import until they hi…

Published: December 31, 2016 - 7:06 am @ http://www.autoblog.com/photos/cars-you-can-legall…

Raw sewage bubbles out of ground, Mesa apartment residents fed up

MESA, AZ - People who live at one apartment complex in Mesa said they have a problem that stinks — raw sewage bubbling up out of the ground an…

Published: December 31, 2016 - 6:35 am @ http://www.abc15.com/news/region-southeast-valley/…

Facebook

ahwatukee.com on Facebook

Twitter

ahwatukee.com on Twitter

RSS

Subscribe to ahwatukee.com via RSS

RSS Feeds

Spacer4px

Most Popular

Online poll

Loading…