Benson Economic Outlook2013

National Economy Recession ended June 2009, slow recovery since 2008-2009: 8.7 million jobs lost 2010-2013 (May): 6.3 million jobs gained GDP up 15 consecutive quarters Unemployment still high: 7.6% (May) Some positive signs (housing, labor market, consumer

confidence) Fiscal policy/sequestration/budget cuts remain a threat Monetary policy/interest rates supportive of growth

Arizona Economy

Local EconomyBenson & Cochise County

Cochise County Retail Sales Growth

Jan 2007M

arM

ayJulSepN

ovJan 2008M

arM

ayJulSepN

ovJan 2009M

arM

ayJulSepN

ovJan 2010M

arM

ayJulSepN

ovJan 2011M

arM

ay JulSepN

ovJan 2012M

arM

ay JulSepN

ovJan 2013M

ar

-30%-20%-10%

0%10%20%30%40%50% Inflation adjusted; compared to same month previous year

Benson Retail Sales Tax Revenue Growth

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Jan 2

007

Mar

May

Jul

Sep

Nov

Jan 2

008

Mar

May

Jul

Sep

Nov

Jan 2

009

Mar

May

Jul

Sep

Nov

Jan 2

010

Mar

May

Jul

Sep

Nov

Jan 2

011

Mar

May

Jul

Sep

Nov

Jan 2

012

Mar

May

Jul

Sep

Nov

Jan 2

013

Mar

Compared to same month previous year; unadjusted

Retail SalesCochise County Benson (TPT Revenue)

2013* 4.5% -1.3%2012 4.5% 5.4%2011 -1.2% -5.6%2010 -4.8% -0.4%2009 -4.2% -4.8%2008 -6.5% 0.6%2007 -1.3% 38.2%Cochise County inflation-adjusted to CPI-U / Benson unadjusted* Jan—Apr only; comparison to same period the previous year

Restaurant and Bar Sales Growth

Jan 2007M

arM

ayJulSepN

ovJan 2008M

arM

ayJulSepN

ovJan 2009M

arM

ayJulSepN

ovJan 2010M

arM

ayJulSepN

ovJan 2011M

arM

ayJulSepN

ovJan 2012M

arM

ayJulSepN

ovJan 2013M

ar

-40%-30%-20%-10%

0%10%20%30%40%50%

Cochise County Benson

Inflation adjusted; compared to same month previous year

Restaurant and Bar SalesCochise County Benson

2013* -5.2% 15.1%2012 -4.4% -6.5%2011 -0.2% -11.1%2010 0.0% -3.7%2009 0.3% 9.1%2008 0.2% -0.6%2007 0.1% -3.1%Inflation-adjusted to CPI-U * Jan—Apr only; comparison to same period the previous year

Accommodation Sales Growth

Jan 2007M

arM

ayJulSepN

ovJan 2008M

arM

ayJulSepN

ovJan 2009M

arM

ayJulSepN

ovJan 2010M

arM

ayJulSepN

ovJan 2011M

arM

ayJulSepN

ovJan 2012M

arM

ayJulSepN

ovJan 2013M

ar

-80%-40%

0%40%80%

120%160%200%

Cochise County Benson

Inflation adjusted; compared to same month previous year

Accommodation SalesCochise County Benson

2013* -14.6% 66.5%2012 -17.2% -13.7%2011 -13.1% -6.1%2010 8.3% 1.0%2009 -9.0% -5.5%2008 1.0% -7.5%2007 19.7% 17.6%Inflation-adjusted to CPI-U * Jan—Apr only; comparison to same period the previous year

Sales Outlook Countywide retail on rebound but

sequestration/defense cuts threaten Countywide hospitality will continue to

struggle, particularly accommodation Benson sales, particularly hospitality, will

continue to improve

Unemployment

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*2%

4%

6%

8%

10%

12%

14%

16%

United States ArizonaCochise County Benson (EPS)Benson (CER)

* Jan-May only; seasonally adjusted

Unemployment (Monthly)

Jan 2012

Feb

Mar

Ap

r

May

Jun

Jul

Au

g

Sep

Oct

No

v

Dec

Jan 2013

Feb

Mar

Ap

r

May

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

16.0%

8.3%

7.6%

8.6%

7.8%8.2%

8.1%

14.3% 14.1%

9.4%9.2%

United States ArizonaCochise County Benson (EPS)Benson (CER)

Nonfarm Job Growth (Cochise County)

Jan 2008M

arM

ayJulSepN

ovJan 2009M

arM

ayJulSepN

ovJan 2010M

arM

ayJulSepN

ovJan 2011M

arM

ayJulSepN

ovJan 2012M

arM

ayJulSepN

ovJan 2013M

arM

ay

-5.0%-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%4.0%

Compared to same month previous year

Job Gains/Losses (Cochise County)

Professional and Business Services

Educational and Health Services

Manufacturing

Trade, Transportation, and Utilities

Information

Financial Activities

Other Services

Leisure and Hospitality

Mining and Construction

Federal Government

State and Local Government

-350 -250 -150 -50 50 150 250 350

325

150

75

50

25

25

0

-25

-100

-275

-300

Chart Title

12 months ended May 2013

Job Gains/Losses % (Cochise County)

Manufacturing

Professional and Business Services

Information

Educational and Health Services

Financial Activities

Trade, Transportation, and Utilities

Other Services

Leisure and Hospitality

State and Local Government

Federal Government

Mining and Construction

-10% -5% 0% 5% 10% 15% 20%

13.0%

7.8%

6.3%

3.0%

2.5%

0.8%

0.0%

-0.6%

-4.3%

-4.7%

-7.1%

Chart Title

12 months ended May 2013

Employment Outlook National and state labor market improving Government job losses (Fort Huachuca and

state/local) pose threat Border security deal may boost federal employment Nearby job creation (e.g., Rosemont Mine, Red Horse

Wind Project, Sierra Vista hospital construction) may help Benson residents

New Residential ConstructionSFR Permits

2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

200

400

600

800

1,000

1,200

0

20

40

60

80

100

120

926

1,0461,108

900

472404 380

347 319274

0 25

104

25

64

38 3218

10

Cochise County Benson

Co

ch

ise

Co

un

ty

Be

ns

on

2004 2005 2006 2007 2008 2009 2010 2011 20121,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

70

80

90

100

110

120

130

140

150

160

1,825

2,097

1,675

1,500

1,184

1,197 1,247 1,2031,286

152143 144

143

103101

89

77

90

Cochise County Benson

Coch

ise C

ount

y

Bens

on

Home SalesMLS only

Home PricesMedian Price (site-built only)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$139,900

$173,900

$192,569 $195,000

$184,000 $182,500

$173,172

$142,145

$119,000 $115,000

$80,250

$100,000

$128,950

$160,000

$145,000

$155,000

$125,000

$106,000 $88,250

$99,000

Cochise County Benson* 1st Quarter only

Outlook New residential construction stalled due to

competition from foreclosures Existing home sales volume given boost from

foreclosures/lower prices

Conclusion National economy hampered by fiscal woes/federal budget cuts,

but some positive signs State economy improving County

Defense budget cuts Border security deal may help

Benson Highway construction completed Job creation in nearby areas UAS training facility?

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