Phoenix economy among nation's weakest - Phoenix Business Journal:

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The first MetroMonitor study from the Washingtonb research group looks at the impacft of the recession on the 100largestt U.S. metro areas. It will be updated The study divides the metro areaz into five categories base on overalleconomic strength, and the Phoenicx area is positioned in the “second-weakest” categor with a diverse group of citied including Tucson, San Diego, Minneapolis, Orlandol and Cleveland. “Phoenix has one of the weakest economiesd in the nationright now,” accordinyg to Lee McPheters, director of the at .
“The characteristicd of this particular recession all combined to hit Arizona harder than almost any other and Phoenix has fallen furthe r than almost any other majorlabor market.” Overalp economic performance in the cities was determined in four change in employment rate from peak one-year percentage-point change in unemployment rate; change in grosws metropolitan product from peak levels; and one-yeaf change in home values. All data are current througnh the first quarterof 2009. Metro areas in Texaa and Oklahoma dominatedthe strongest-performing group, including San Antonio, Houston, Oklahoma City and Tulsa. No city west of N.M., ranked in the best-performing group.
While Detroif was ranked the weakest-performing city, metroi areas in California and Florida dominated thebottom 20. Fresno and Modesto were the California cities near the bottok ofthe rankings, as were the Florida citiea of Tampa, Jacksonville and Miami. “While some areas of the countrt have experienced only a shallow downturn and may be emerginf from therecession already, peoplee living in metro areas that are now performingy weakest economically should preparr themselves for a long recovery period,” according to studyy co-author Alan Berube, researchh director of the Metropolitan Policy Program at Brookings.
“What we did concludes is that, (for example) Phoenix was in the next-to-bottom group of metros on economic performance over the coursr ofthe recession,” he The rankings for the Phoenix metro area are all over the According to the MetroMonitor study, the Vallegy showed the strongest quarterly growth in wages from the fourth quarterr of 2008 to the first quarter of this Its gain of 2.6 percenf was far stronger than the U.S. average of 1 placing the cityat No. 1 in that category. Accordinb to the report, cities such as Phoenixd and Las Vegas that have sustained large job lossees saw their average wage levels rise over thelast quarter.
That may indicate migration to theswe placeshas slowed, especially among less skilledf workers, and that recent job losses have occurree disproportionately among lower-paying industries. While Phoenix was tops for wage the city ranked very poorlyg in nearly every othereconomivc indicator. Its quarterly drop in employmentwas 2.9 much greater than the national average drop of 1.5 That ranked Phoenix 98th among the 100 metroi areas. The Valley also performede poorly inhousing measures, ranking 92nd in the one-yearf change in housing prices, with a drop of 16.6 The national average drop was only 6.3 percent. “Phoenicx attracts potential buyers at thenationalo level.
It is a fast-movingf efficient market, and that is why prices have come ASU’s McPheters said. “The silvee lining is that homes are affordablwe againin Phoenix, setting the stage for a stronvg rebound in the economy after 2010.” The Phoenix area ranked 95th in the numbee of real estate-owned properties, with nearlhy four times more of those properties than the national REOs are properties that revert to the mortgage holdeer after an unsuccessful foreclosure According to Brookings, the nation’s 100 largest metropolitan areas those with at least 500,000 residents in 2007 collectively contain two-thirds of the nation’sz jobs and generate three-quarters of gross domestic product.
While the economt is in worse shape here than most other areas of the the Phoenix area has been down before and responded withstaggeringv growth. “Although Arizona is at a low the state and Phoenix have the capabilityy to rebound with growth rates two to three timew those of the nation asa whole.” McPheters