Archive for October 14th, 2008

The Tucson region has rested on it’s great climate and influx of new residents for virtually all our economic development. We have three industries that run are the overwhelming economic engines in our region. The big three are; construction and real estate related activities, tourism and the government sector. GTEC settled on bringing in low paying call centers and is no longer in existence. (GTEC background HERE.)  TREO is working on their blueprint and point to successes but at the end of the day the big three still dominate our economy. Info on the 2008 blue print HERE.

Real Estate and construction related activities which are fueled long term by people’s desire to move to our region. This industry was super heated during the sub prime boom and bust we are currently experiencing. We will recover but the bitter pill will be hard to swallow for the short term. The slump started back in 2007, just when the County was INCREASING their staff. 
 

The slowdown was clear by January or February, said Tom Doucette, owner of local builder Doucette Communities.

“I’d have to be awfully skeptical to criticize that decision (to hire), but it seems they ignored the signs of what was happening,” Doucette said. “They hear the development community say things are bad, and they think we just don’t want to pay more fees.”

Tourism is way down all over our valley. The national economic pressures are causing ripple effects all over our region. Tucson International Airport is loosing flights and airlines, bed taxes are down, people are being laid off and again the near future doesn’t look good.

The government sector which makes up 7 out of the top 10 employers in our region is finally starting to slow. The UofA is talking about cost cuts, City and County coffers are slowing down causing departments to downsize. From the federal to the state to local government we are in for the biggest drop in revenue and slow down than we’ve seen in decades.

As a community we live and die on NEW MONEY entering the system. With pressures on our big three industries our NEW MONEY supply will dry up and the circulation system will slow to a crawl.

Economic pressures on a national level effect everyone. Those communities that have diversified their economic base will weather the storm much better than us. Hold on it’s going to be a bumpy ride.