Experts: Az’s population growth will rebound
Increase in people could take several years
PHOENIX – The rapid population growth that drove Arizona’s economy before the Great Recession could return in large part within several years as things improve elsewhere, experts say.
“We were a people magnet for decades,” said Dennis Hoffman, an economics professor at Arizona State University’s W.P. Carey School of Business. “We’re not a people magnet right now. But there’s increasing signs the magnetism is coming back.”
Estimates from the U.S. Census Bureau show that Arizona’s population grew by 1.08 percent from July 2010 to July 2011, adding nearly 70,000 people. That’s fairly consistent with 1.1 percent and 1 percent growth in the previous two years.
During the latest boom, Arizona’s population growth peaked at 3.3 percent from July 2004 to July 2005, adding 187,000 people.
Elliott D. Pollack, CEO of the economic and real estate consulting firm Elliott D. Pollack & Co., said Arizona’s economic growth depended on adding 100,000 people every year. The population boom fueled growth in “people–serving” jobs, such as doctors, real estate agents and salespeople, he said.
Pollack said he doesn’t expect Arizona to return to the job growth of 2007, just before the crash, until 2015.
“It will be almost a lost decade,” he said.
Marshall Vest, an economist with the University of Arizona’s Eller College of Management, said many people across the country can’t move because they owe more on their homes than they’re worth.
“We’re experiencing the lowest mobility in this country that we’ve seen at least in 60 years,” he said.
Numbers from the Arizona Office of Employment and Population Statistics suggest that population growth is even slower than the Census Bureau estimates. The office found an 0.58 percent increase – representing about 37,000 people – from July 2010 to July 2011.
That number could mean that more people actually are leaving Arizona since natural population growth created by births minus deaths is usually between 35,000 and 38,000, said Jim Chang, the state demographer.
“We stand behind our numbers,” he said.
Chang said that when Arizona emerges from the recession it would be realistic to expect population growth of 1.5 percent to 2 percent annually. That could begin in three or four years, he said.
In the long term, Chang said, population growth above 3 percent is unsustainable and unhealthy for the economy because it can lead to a bubble in home prices with a surge in speculation and a shortage of jobs for those moving here.
“For many years, Arizona has been relying on population growth,” Chang said.
Pollack said that Arizona will eventually lure more people to live here because of factors including its nice climate and relatively inexpensive housing.
“Have any of those dynamics changed? Not really,” he said.