Economic forecast for Verde Valley economy? Partly sunny skies

‘I feel like this region gets it’ says economic expert Jim Rounds

VVREO Chair Jennifer Wesselhoff says her organization is “rooted in that cooperative spirit of regional partnerships in representing all of our communities.” (Photo by Tom Tracey)

VVREO Chair Jennifer Wesselhoff says her organization is “rooted in that cooperative spirit of regional partnerships in representing all of our communities.” (Photo by Tom Tracey)

VERDE VALLEY – During its Annual Speaker Event at the Clark Memorial Clubhouse Oct. 21, the Verde Valley Regional Economic Organization (VVREO) received a forecast by Rounds Consulting Group giving a glimpse of sunlight even as economic clouds continue to roll-in.

Verde Valley makes its case

VVREO Chair Jennifer Wesselhoff opened the event saying “VVREO is rooted in that cooperative spirit of regional partnerships in representing all of our communities. VVREO strives for excellence in four main areas: Economic wealth development, stewardship of nature, sense of place and quality of life.”

She pointed-out the progress made by stakeholders, including SR 260 expansion with accompanying broad band internet, $605,000 in USDA loan and grant funds for micro-entrepreneurs-hips and the region’s selection as one of 22 sites worldwide on the Nat Geo web tour.

“We know each of our individual communities are greater whenever we work together and strive with partnerships, not only improving the vitality and prosperity of the region, but a sense of community in the lives of each other and our individual cities,” said Wesselhoff.

Town of Clarkdale Vice Chair Richard Dehnert noted “if you look at an old newspaper article from 1927, it talks about how the Rotary and Kiwanis clubs were going to promote tourism in the Verde Valley. That was 1927 and we are still working on it”, noting the town launched a new promotional website at www.experienceclarkdale.com.

The outside expert gives his insider forecast

“Nobody wants to talk to an economist,” opened Jim Rounds of Rounds Consulting Group. “Sometime you need to put it into the right context, to get a little outside support or get help to gather some data.”

His Tempe-based firm specializes in economic development, revenue forecasting, budget development, strategic planning and marketing. A self-described “independent,’ he believes it takes both public and private sectors to succeed in encouraging small business “growth from within” while at the same time investing in education and work force training.

What the Verde Valley is doing it right

Rounds believes the two biggest strengths of the Verde Valley are its partnering skills and its forward thinking.

“I feel like this region gets it,” said Rounds. “The first thing that I noticed in coming here was that we can talk about how we can advance things because we are already coordinated. That’s a huge step.” He added that “I commend you for getting past those tough issues, getting past egos, to have private sector support and government support.”

He also noted that economic growth since the last recession has doubled in this county compared to the statewide average, with Yavapai County having grown 94 percent compared to Arizona’s 41 percent.

“You are improving the economy at a very respectable pace. The data is very consistent with stronger areas,” said Rounds. “I see it as forward thinking. You don’t eat an apple for dinner and wonder why you didn’t lose 10 pounds the next day.”

What the Verde Valley can do better

Comparing the Verde Valley with other successful communities, Rounds noted a few tweaks that have jump-started other regions.

“We need to modify tax laws. We don’t have to be the lowest, it just needs to be adjusted,” said Rounds, pointing out a balance between welcoming new enterprise while understanding “you have to pay for stuff that businesses need and that people need.”

He also believes “we can do more than one thing. Policy makers in a large part like to reduce things to one or two items. The key is finding experts in different things. You aren’t an expert in everything.”

“Focus on what you do best,” said Rounds. “The data inputs have to support it. Just because you did something 10 years ago doesn’t mean you do it moving forward.”

He compared it with someone of his smaller stature trying to become a basketball star.

“Even if I quit my job and spent all my time at the park focused on dunking a basketball, that’s not what I do best,” he said. “Focus on areas you do well.”

Rounds also believes “we’ve done a terrible job in job training” at the county as well as state level. He shared a story about a program that touted an entry-level fast food worker rising to a distribution career.

“But what I want to know is why 1,000 students dropped out of that program? Were they wiped-out, too tired because the training was from 7 to 10 at night and they had family? I don’t know, but no one asked the question.”

Where are the jobs?

The good news is that the Verde Valley is showing growth in jobs. The bad news is that “we are adding to jobs but not the quality of jobs,” said Rounds.

“We are not going to get those manufacturing jobs back because there are global issues at play,” said Rounds. “In Arizona, the major employers used to be Motorola and Honeywell. Now it’s Walmart. We dropped the ball for two decades statewide.”

His research does show statewide growth in job industries such as leisure and hospitality (228 percent); education and health services (182 percent); financial activities (165 percent); professional and business services (100 percent) and information services (87 percent).

When it comes to analyzing data, though, Rounds cautions policy makers to ask more questions, “like the kid in the back seat of the car during a road trip asking ‘why, why, why?’”

“The consumer confidence index is not as useful as in the past. In the 80’s and 90’s, it was ‘I got a raise.’ In the last five years, it’s ‘I didn’t get laid-off.’ It means something different now,” said Rounds. “I know a person who was making $200,000 selling homes. He lost his job. He is now is in retail, making less than when he first started working. He lost a job and gained a job, but it doesn’t tell the whole story, does it?”

While Arizona ranked 8th nationwide in job growth (with Idaho scoring 1st, Oregon 2nd and Utah 3rd), no state exceeded single-digit growth.

“The millennials have inherited an economy that they didn’t create and they have a lot of student debt,” said Rounds.

How small things become big things

In his recommendation to economic development directors, Rounds has found that trying to attract the biggest enterprises is not always the best course of action. He described a community that concentrated on attracting one big enterprise at the exclusion of multiple smaller enterprises.

“A big company relocating does not work in a region like this. Instead, get a supplier to that big business where the wages are as high as the business itself,” said Rounds. “Small business can create that expansion.”

In much the same way, Rounds is forecasting a series of small economic forces about to affect the Verde Valley.

“Someone threw a rock in the bucket and it fell down (in 2008) and it took a long time to come back up,” said Rounds. “What is happening now is not a major shock but a lot of little ones (he named currency devaluation, unstable governments and a stock market inflated beyond growth). But what happens when you fill a bucket with a lot of little rocks over a period of time? It’s just as heavy.”

“In the next two or three years, we are going to have a downturn, but it will look more like 2001 than in 2008 because we were slower (than other states) to recover,” he said.

Non-profit contribution

An attendee asked Rounds about the contributions made by non-profits.

“We are real economic players but oftentimes not included in the conversation,” she said. “How do we better utilize organization involved in employment education, recovery retraining, and educational scholarships so our students have access to four-year or technical training in ways we never considered before?”

Rounds said “it depends on the skills set. We don’t have to reinvent the wheel. Just bring the wheel to the community. Figure out your niche and work with economic developers.”

“Economic development is not driving the economy in every case”

Rounds equates economic developers as team members in the Olympic sport of curling.

“Economic development is not driving the economy in every case. The economy is already moving in a certain direction,” said Rounds. “It’s like curling. That rock is going forward - - that’s the economy. Either you are sweeping the ice in front of the rock to help it move towards its target or else you are slowing it down.”

“You have choices be optimistic about. Things are going to slow a little bit but it’s a great time to invest in infrastructure and budget planning. We will have a great opportunity to get past this,” said Rounds.

Latest Verde Valley job information

Alexandria Wright, director of the Regional Economic Development Center at Yavapai College, offers her employment research and analysis skills to help grow enterprises and municipalities throughout northern Arizona. Here are her latest findings on the Verde Valley job market:

Top Ten job earnings

  1. Government ($60,000 average)
  2. Manufacturing
  3. Health Care and Social Assistance
  4. Professional and Scientific
  5. Construction
  6. Real Estate and Rental
  7. Retail Trade
  8. Administrative and Support
  9. Accommodation and Food
  10. Other Services ($22,000 average)

Top Ten job sectors

  1. Accommodation and Food
  2. Retail Trade
  3. Government
  4. Health Care and Social Assistance
  5. Construction
  6. Other Services
  7. Manufacturing
  8. Administrative and Support
  9. Professional and Scientific
  10. Real Estate and Rental

Fastest growing industries

  1. Accommodation and Food
  2. Retail Trade
  3. Health Care and Social Assistance
  4. Construction
  5. Manufacturing
  6. Administrative and Support
  7. Professional and Scientific
  8. Arts and Entertainment
  9. Wholesale Trade
  10. Utilities

Fastest growing occupations

  1. Food Preparation and Serving
  2. Office and Administrative
  3. Sales and Related
  4. Building and Grounds Cleaning
  5. Construction and Extraction
  6. Transportation and Material Moving
  7. Management
  8. Installation and Maintenance
  9. Production
  10. Business and Financial

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