GREATER PHOENIX ECONOMIC COUNCIL MITCHEL ALLEN VP, BUSINESS DEVELOPMENT, INDUSTRIAL

Transcription

1 GREATER PHOENIX ECONOMIC COUNCIL MITCHEL ALLEN VP, BUSINESS DEVELOPMENT, INDUSTRIAL

2 GREATER PHOENIX ECONOMIC COUNCIL

3 OUR MISSION Attract and grow quality businesses and advocate for Greater Phoenix s competitiveness.

4 GREATER PHOENIX ECONOMIC COUNCIL ABOUT We are supported by Maricopa County, 22 cities and towns, and more than 150 private-sector investors ,000+ $14.4B SINCE 1989 GPEC has assisted more than 740 businesses as they relocate and expand to GPEC has brought more than 130,000 jobs to the region. GPEC has helped bring $14.4 billion in capital investment. the region.

5 GREATER PHOENIX ECONOMIC COUNCIL GPEC PARTNERS GPEC MEMBER COMMUNITIES Member Community Apache Junction Avondale Buckeye Casa Grande Chandler El Mirage Fountain Hills Gila Bend Gilbert Glendale Goodyear Maricopa Mesa Peoria Phoenix Queen Creek Scottsdale Surprise Tempe Tolleson Wickenburg Youngtown

6 BUSINESS ATTRACTION GPEC SERVICES IN-DEPTH MARKET DATA & ANALYSIS Analysis of current wage rates, labor force, skill levels based on occupation and industry, etc. OPERATIONAL COST ANALYSIS Comparisons across major markets with analysis of transportation, real estate, tax incentives, labor costs, etc. CONNECTIVITY TO KEY RESOURCES Introductions to colleges, universities, workforce assets, state and local regulatory authorities, job training programs, startup resources, business leaders, etc. SPEED TO MARKET SUPPORT City permitting, entitlements and certificates of occupancy SITE-SELECTION ASSISTANCE Listing of value-based assets, unique buildings and shovel-ready sites ECONOMIC IMPACT ANALYSIS Evaluation of your project s economic impact and community benefit ECONOMIC POLICY COMPETITIVENESS Annual review of current economic development program offerings

7 ECONOMIC SNAPSHOT

8 The national picture of economic growth is strong Unemployment Rate Real GDP, Quarterly Percent Changes % Corporate Profits as a % of GDP (5-Year Moving Average) Corporate Profits as a % of GDP (5-Year Moving Average) 25,000 Dow Jones Industrial Average, Monthly Closing Value 8% 20,000 6% 15,000 4% 10,000 2% 5,000 0% May 2018 Sources: BLS Current Population Survey and Consumer Price Indexes, University of Michigan Survey of Consumers, and BEA retrieved from FRED 12

9 But the economy is producing more geographically unequal outcomes. Shrinking share of U.S. counties matching national rates of business and job growth Business establishments Employment Source: Census CBP 13

10 and Americans are more stuck in place than ever before. Percent of Population Moving Across State Lines 4.0% 3.0% 2.0% 1.0% 0.0% Source: U.S. Census Bureau, State-to-State Migration Flows

11 The U.S. startup rate remains near its all-time low. New Firm Startup Rate 16% 12% 8% 4% 0% Sources: U.S. Census Bureau Business Dynamics Statistics 15

12 Inadequate access to capital limits opportunity in much of America. Nearly one out of every four community banks has disappeared since 2008 In real terms, small business lending remains down by a quarter 75% of all venture capital concentrates in three states: California, New York & Massachusetts 10,000 8,000 $800 6,000 4,000 2, Billions of 2009 dollars $600 $400 $200 75% Number of U.S. Community Banks $ Sources: FDIC and National Venture Capital Association 16

13 American communities face disparate economic realities. 52 million Americans (1 in 6) live in economically distressed zip codes. Arizona: Over 24% of the population lives in a distressed zip code Prosperous Distressed Learn more at eig.org/dci 17

14 Over 50 million Americans live in economically distressed communities. Prosperous Distressed 5.7% Adults w/o High School Diploma 22.5% 6.2% 20.8% 4.8% 145.9% Poverty Adults not Working Housing Vacancy Median Income Ratio 26.7% 41.8% 14.4% 68.6% 24.5% Change in Employment -6.0% 12.6% Change in Establishments -6.3% Source: EIG s 2017 Distressed Communities Index covering zip codes,

15 These trends hold true locally. Arizona Cumulative Change in Employment by Quintile Source: EIG s Escape Velocity 19

16 ECONOMIC SNAPSHOT JOB GROWTH SINCE THE RECOVERY Greater Phoenix recovered peak pre-recession job numbers in August 2016 Current total nonfarm payroll employment is 2,060,600 Since the recovery began the region has gained 413,400 jobs Greater Phoenix Job Growth Jobs in Thousands Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Source: AZ Office of Economic Opportunity Labor Statistics, June 2018, not seasonally adjusted, preliminary numbers

17 ECONOMIC SNAPSHOT JOB RECOVERY FORECAST Greater Phoenix job growth is projected to be 2.8% from 2017 to 2018 AZ job growth is projected to be 2.52% from 2017 to 2018 U.S. job growth is projected to be 0.7% from 2017 to Projected Non-Farm Employment Growth Jobs in Thousands Source: University of Arizona Economic and Business Research Center, May Bureau of Labor Statistics, projections.

18 ECONOMIC SNAPSHOT EMPLOYMENT GROWTH Rank out of 50 states Ranking among all metro areas greater than 1,000,000 Year Rank Year Rank Year Rank # MSA s Year Rank # MSA s Source: Arizona State University, U.S Bureau of Labor Statistics

19 ECONOMIC SNAPSHOT COST OF LIVING The overall cost of living in the Greater Phoenix region is 5.0% below the national average. Cost of Living Comparison for Select Markets Region 100% Composite Index 13.61% Grocery Items 27.59% Housing 10.06% Utilities 9.59% Transportation 4.00% Healthcare 35.15% Misc. Goods Services San Antonio, TX Albuquerque, NM Phoenix, AZ Salt Lake City, UT Austin, TX Houston, TX Dallas, TX Las Vegas, NV Denver, CO Chicago, IL Portland, OR San Diego, CA Los Angeles, CA Boston, MA Seattle, WA Arlington, VA San Francisco, CA New York City, NY and Source: C2ER Cost of Living Index 2017 Annual Average

20 ECONOMIC SNAPSHOT CURRENT MAKEUP OF INDUSTRY The recovery was led by Professional and Business Services, Health Care and Social Assistance, Leisure and Hospitality, Finance and Insurance, and Government. Current Employment by Industry Industry Job Gains in Recovery % Growth Total Nonfarm % Professional and Business Services % Health Care and Social Assistance % Leisure and Hospitality % Construction % Finance and Insurance % Retail Trade % Manufacturing % Transportation and Utilities % Educational Services % Information % Government 9.2 4% Real Estate, Rental, and Leasing % Other Services 2.7 4% Wholesale Trade 1.0 1% Natural Resources and Mining 0.2 7% Source: AZ Office of Economic Opportunity Labor Statistics, June 2018, not seasonally adjusted, preliminary numbers

21 ECONOMIC SNAPSHOT CURRENT MAKEUP OF INDUSTRY Overall diversification of industry employment remains similar to diversification pre-recession. Most significant changes are a relative growth in Health Care and Social Assistance, and decline in Construction and Retail Trade. Pre-recession Employment Diversity Current Employment Diversity Real Estate, Rental, and Leasing Educational Services Information Educational Services Information Real Estate, Rental, and Leasing 1% Professional and 2% 2% Professional and Transportation and Business Services 17% Transportation and Utilities Business Services 17% Other Services 4% Other Services 3% Wholesale Trade 5% Wholesale Trade 4% Finance and Insurance 6% Government 13% Finance and Insurance 7% Government 11% Manufacturing 7% Manufacturing 6% Construction 8% Retail Trade 13% Construction 6% Retail Trade 12% Health Care and Social Assistance 9% Leisure and Hospitality 10% Health Care and Social Assistance 13% Leisure and Hospitality 11% Source: AZ Office of Economic Opportunity Labor Statistics, June 2018, not seasonally adjusted, preliminary numbers

22 ECONOMIC SNAPSHOT WAGE GROWTH In Greater Phoenix and AZ, overall real personal income and real per capital personal income grew faster than the national average from 2015 to Real Personal Income (millions of chained 2009 dollars) % Growth Greater Phoenix 179, , % Arizona 257, , % United States 14,201,215 14,363, % Per Capita Real Personal Income (chained 2009 dollars) % Growth Greater Phoenix 39,235 39, % Arizona 37,889 38, % United States 44,255 44, % Source: Bureau of Economic Analysis, May 2017.

23 ECONOMIC SNAPSHOT PER CAPITA PERSONAL INCOME Year Per Capita Personal Income in Dollars 2000 $28, $28, $29, $30, $32, $34, $37, $38, $37, $35, $34, $36, $37, $38, $39, $41, $42, Source: Federal Reserve Bank of St. Louis, July 2018

24 ECONOMIC SNAPSHOT HOUSING MARKET TRENDS Home prices are trending steadily upward, and increased by 7.26% in Greater Phoenix from May 2017 to May Jun-2002 Nov-2002 Source: S&P/Case-Shiller Home Price Index, July 2018 Greater Phoenix Home Price Index Apr-2003 Sep-2003 Feb-2004 Jul-2004 Dec-2004 May-2005 Oct-2005 Mar-2006 Aug-2006 Jan-2007 Jun-2007 Nov-2007 Apr-2008 Sep-2008 Feb-2009 Jul-2009 Dec-2009 May-2010 Oct-2010 Mar-2011 Aug-2011 Jan-2012 Jun-2012 Nov-2012 Apr-2013 Sep-2013 Feb-2014 Jul-2014 Dec-2014 May-2015 Oct-2015 Mar-2016 Aug-2016 Jan-2017 Jun-2017 Nov-2017 Apr-2018

25 KEY BUSINESS DEVELOPMENT TRENDS

26 KEY BUSINESS DEVELOPMENT TRENDS KEY BUSINESS DEVELOPMENT TRENDS Corporate Services Office Optimization Product Availability Tech Trends Out of California International Activity Data Sciences and Marketing Automation

27 CORPORATE SERVICES OFFICE OPTIMIZATION

28 FINANCIAL SERVICES JOB GROWTH CORPORATE SERVICES OFFICE OPTIMIZATION The region is positioned for strong and continued job growth in the industry with a 25% change and more than 27,000 new jobs in the past 5 years. This is unmatched by other comparable markets considering that average earning in the region is $88.5k while others range from $111K to $149K. Source: EMSI

29 CORPORATE SERVICES OFFICE OPTIMIZATION TOP FINANCIAL SERVICE INDUSTRIES & JOBS IN THE REGION The region is growing with total of 27,000 jobs in the Financial Service Industry. Ranking Source: EMSI, Industry Description Phoenix-Mesa- Scottsdale, AZ Depository Credit Intermediation 29,221 34,788 2 Activities Related to Credit Intermediation 21,790 24,955 3 Agencies, Brokerages, and Other Insurance Related Activities 14,297 24,187 4 Non-depository Credit Intermediation 16,087 19,154 5 Insurance Carriers 16,892 18,806 6 Securities and Commodity Contracts Intermediation and Brokerage 9,621 11,848 7 Other Financial Investment Activities 5,134 7,168 8 Monetary Authorities - Central Bank Other Investment Pools and Funds < Insurance and Employee Benefit Funds <10 <10 Total 113, ,996

30 TOP 15 GPEC LOCATES CORPORATE SERVICES OFFICE OPTIMIZATION Over the last 5 years, the following firms have created 12,355 new jobs in the financial service or corporate service industry.

31 PRODUCT AVAILABILITY

32 INDUSTRIAL VACANCY RATE PRODUCT AVAILABILITY The region's vacancy rate will continue to decrease based on data from the last 5 years that shows the rate changing from 11% to now 6.3%. This demonstrates strength in market demand to absorb industrial real estate. Source: CoStar

33 5 -YEAR SF AVAILABILITY BY CLASS PRODUCT AVAILABILITY 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000, Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 Class A Class B Class C Source: CoStar

34 PRODUCT AVAILABILITY ADVANCED MANUFACTURING INITIATIVE 21 10M 100+ GPEC had 21 industrial manufacturing locates in the fiscal year 2018 (50% of locate activity). Greater Phoenix had 10 million square feet of industrial absorption in GPEC has over 100 active manufacturing prospects in the pipeline. 75 The lack of building inventory has lost approximately 75 manufacturing or advanced manufacturing projects.

35 EMPLOYMENT OVERLAYS PRODUCT AVAILABILITY The Employment Overlay Initiative provides clients certainty, speed to market, and cost savings. Employment Overlays are intended to allow prospective employers and property owners the ability to efficiently move through the entitlement and permitting process, saving them time and money. The community will identify and designate the design standards. Identify a team of senior planners and reviewers. As long as design standards are met, approvals can made administratively at the community level. Develop and create a customized permitting timeline to help identify areas in which can speed up the entitlement process. Permits must be reviewed within five business days.

36 TECH TRENDS OUT OF CALIFORNIA

37 SAAS COMPANY GROWTH TECH TRENDS OUT OF CALIFORNIA SaaS continues to be a leading industry coming out of the Bay Area. Over the years, GPEC has helped several SaaS companies grow and expand to the market, notably DoubleDutch, Gainsight and Upgrade, which recently announced further expansion. The GPEC pipeline also has about a dozen SaaS-related projects in various stages of the pipeline. At least two are expected to make an announcement that Phoenix will be the location for their satellite office in Q3.

38 VENTURE CAPITAL ACTIVITY IN ARIZONA TECH TRENDS OUT OF CALIFORNIA Much of Arizona s VC activity is in the SaaS space as well. Key success stories include: Integrate closed a $23 million E round June 2018 CampusLogic received a $55 million private equity investment in April age has doubled the size of their HQ in Chandler over the past year due to 80% yearover-year growth

39 CALIFORNIA DEAL PIPELINE TECH TRENDS OUT OF CALIFORNIA Of the active prospects in the pipeline, 27.2% of the total are California deals PROSPECTS 85 LOCATION UNKNOWN

40 TECH TRENDS OUT OF CALIFORNIA VENTURE CAPITAL TREND DATA The average deal size in the financial industry is $3.42M There are 12 deals in the last 5 years accounting for $41.1M of total funding Source: CBInsights

41 INTERNATIONAL ACTIVITY

42 INTERNATIONAL ACTIVITY FY19 FDI STRATEGY The strategy will focus on supporting the development of The Connected Place, with regards to: Growth-stage companies that have already closed on A round or higher developing IP and are looking to bring new products and services to the U.S. market in: Artificial Intelligence Cybersecurity/Blockchain E-commerce FinTech Health-Tech/Wearable Robotics High-value electronics, semiconductor and aerospace manufacturers, and supply chain that are developing IP and looking to bring new products and services to the U.S. market

43 INTERNATIONAL OUTREACH Sales missions to Hong Kong, Taiwan and Mexico City will take place next month. In Q1 we are also executing 3 workshops in the U.K. for the FinTech Sandbox: Media FinTech Sandbox Launch Event: London Monday, September 17 West Coast Workshop: Manchester Tuesday, September 18 AZ FinTech Sandbox Clinics: London Wednesday and Thursday, September 19 & 20 INTERNATIONAL ACTIVITY 18.2% OF ACTIVE PROSPECTS IN THE PIPELINE ARE INTERNATIONAL We will attend The MedTech Conference later this month.

44 DATA SCIENCES & MARKETING AUTOMATION

45 DATA SCIENCES & MARKETING AUTOMATION DATA SCIENCES & MARKETING AUTOMATION SINCE DECEMBER % 96, OPEN RATE S SENT LEADS GENERATED

46 PE & VC FUNDING AUTOMATION CAMPAIGN DATA SCIENCES & MARKETING AUTOMATION Company receives funding Decision maker identified, generated & verified using software Contact information & relevant data entered into marketing automation database, platform & campaign Contact receives 3 personalized s over the course of 3 weeks s track link clicks and GPEC website engagement Qualified & responsive contacts transferred to CRM as leads

47 VC FUNDING AUTOMATION CAMPAIGN RESULTS DATA SCIENCES & MARKETING AUTOMATION 28.5% OPEN RATE 20,735 S SENT 439 PAGES VIEWED 6.6 MIN AVG. TIME ON PAGE

48 OUR REGION

49 OUR REGION DEMOGRAPHICS Population Workforce Median Age Some College 4.7M 2.3M %

50 OUR REGION MARKET SIZE (2017) GREATER PHOENIX 4,649,287 WEST VALLEY 838,045 PHOENIX 1,579,253 EAST VALLEY 1,646,086 MARICOPA COUNTY 4,221,684

51 OUR REGION MARKET GROWTH (2027) GREATER PHOENIX Projected growth of 20.5% to 5.60 million MARICOPA COUNTY WEST VALLEY 1,067,700 PHOENIX 1,847,200 EAST VALLEY 1,925,171 Projected growth of 19.5% to 5.04 million 27.4% 17.0% 17.0%

52 BUSINESS ATTRACTION

53 BUSINESS ATTRACTION FY18 QUICK OVERVIEW 42 COMPANIES LOCATED IN FY18 $1.2 BILLION IN CAPITAL INVESTMENT 8,606 JOBS CREATED IN THE REGION 122% OF GOAL 20% INTERNATIONAL 104% OF LAST YEAR 21 MANUFACTURERS LOCATED IN FY18 *Numbers as of July 1

54 LOCATE OVERVIEW BUSINESS ATTRACTION

55 BUSINESS ATTRACTION FY18 PROSPECT ACTIVITY ACTIVE PROSPECTS 299 FY18 PROSPECTS 279 CAPITAL INVESTMENT POTENTIAL $15.4 B JOB POTENTIAL 63,335 SQUARE FOOTAGE POTENTIAL 69,411,161 *Numbers as of July 1

56 BUSINESS ATTRACTION FY2018 PROSPECT ACTIVITY OFFICE PROSPECTS 126 office prospects in FY18; up from 117 in FY17. 6 prospects over 200,000 SF in FY18; down from 11 in FY prospects under 25,000 SF in FY18; up from 55 in FY are looking for existing space, 8 build to suit, 7 no preference. INDUSTRIAL PROSPECTS 153 industrial prospects in FY18; up from 150 in FY prospects over 200,000 SF in FY18; up from 39 in FY prospects under 25,000 SF in FY 18; down from 28 in FY are looking for existing space, 27 build to suit, 42 no preference. 200, , , , , , ,000-99, ,000-99, ,000-74, ,000-74, ,000-49, ,000-49, Under 25, Under 25, *numbers as of July 1

57 GETTING INVOLVED AT GPEC

58 GETTING INVOLVED AT GPEC GPEC COUNCILS INTERNATIONAL LEADERSHIP COUNCIL Advises on the direction and implementation of GPEC s export and foreign direct investment efforts, and provides guidance to increase program impacts. HEALTHCARE INNOVATION COUNCIL Works to advance healthcare and bioscience initiatives for the region, and establish Greater Phoenix as a center of excellence, anchored by innovative assets and world-class leadership. COMMUNITY BUILDING CONSORTIUM Applies collective commercial real estate experience to help capture business development opportunities and increase the region s transactional capabilities. ECONOMIC DEVELOPMENT DIRECTORS TEAM Advises the GPEC president & CEO and the staff on local economic development trends, offers insight on the pulse of city and town councils, and partners with GPEC to finalize location decisions. GPEC NEXT LEADERSHIP COUNCIL Advises GPEC leadership and the board on the development of the strategic plan, annual action plan and metrics, and the Washington, D.C. mission. MAYORS AND SUPERVISORS COUNCIL Convenes mayors of GPEC communities and county supervisors for regular updates on strategic initiatives. AMBASSADOR PROGRAM Ambassadors help communicate, educate and inform stakeholders, policy-makers, citizens and media about key regional economic development issues.

59 THANK YOU GREATER PHOENIX: Where talent is bred, community is built, and business thrives Greater Phoenix Economic Council GPEC.ORG 2 N. CENTRAL AVE., SUITE 2500, PHOENIX, AZ INFO@GPEC.ORG (602)