LB - Yavapai College 0523 Industrial Machine 728x90

Home | Classifieds | Place Ad | Public Notices | Galleries | Kudos | Obits | Real Estate | Subscriber Services | Villager | Health Directory | Contact Us
The Verde Independent | Cottonwood, Arizona

home : latest news : state May 28, 2016


11/12/2013 3:09:00 PM
Auto sales fuel resurgence of Arizona economy

Howard Fischer
Capitol Media Services


PHOENIX -- Arizona's economy continues to mend, spurred largely by a 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 - 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.


    Most Viewed     Recently Commented
•   Marana man suffers skull injury, brain bleed following ATV crash (3260 views)

•   Man arrested on numerous charges after crashing stolen motorcycle (2396 views)

•   Blaze erupts from panel van at gas station (2325 views)

•   Smoke on the mountain, where lighting struck repeatedly (1803 views)

•   State Investment Board questions legality of Prop. 123 disbursements (1027 views)





Article Comment Submission Form
Comments are not posted immediately. Submissions must adhere to our Use of Service Terms of Use agreement. Rambling or nonsensical comments may not be posted. Comments are limited to Facebook character limits. In order for us to reasonably manage this feature we may limit excessive comment entries.
Submit an Article Comment
First Name:
Required
Last Name:
Required
Telephone:
Required
Email:
Required
Comment:
Required
Passcode:
Required
Anti-SPAM Passcode Click here to see a new mix of characters.
This is an anti-SPAM device. It is not case sensitive.
   


Advanced Search

HSE - We want to hear from you
HSE - Father Son Look a Like Contest
HSE - Readers Choice 300x100
Find more about Weather in Cottonwood, AZ
Click for weather forecast





Submission Links
 •  Submit your feedback about our site

Find It Features Blogs Celebrate Submit Extras Other Publications Local Listings
Classifieds | Place Ad | Galleries | Kudos | Real Estate | Subscriber Services | e-News | RSS | Site Map | Find Verde Jobs | Contact Us
LB - RoomStore 0503

© Copyright 2016 Western News&Info, Inc.® The Verde Independent is the information source for Cottonwood and Verde Valley area communities in Northern Arizona. Original content may not be reprinted or distributed without the written permission of Western News&Info, Inc.® Verde News Online is a service of WNI. By using the Site, verdenews.com ®, you agree to abide and be bound by the Site's terms of use and Privacy Policy, which prohibit commercial use of any information on the Site. Click here to submit your questions, comments or suggestions. Verde News Online is a proud publication of Western News&Info Inc.® All Rights Reserved.

Software © 1998-2016 1up! Software, All Rights Reserved