H1 2023 Phoenix Market Update

H1 2023 Phoenix Market Update

 

The recent upswing in interest rates has mitigated the fervor in Phoenix's market, and the possibility of restrictions on residential properties, stemming from water supply shortage concerns, could potentially dampen market activities in the near to intermediate future. Nevertheless, the continued operations of numerous large-scale, multi-year manufacturing facilities, especially those focused on advanced manufacturing, keep the construction market vibrant. Consequently, the labor market is still experiencing growth, although a dearth of skilled workers, both blue- and white-collar, is keeping construction costs elevated. While Phoenix's cost of living remains relatively low compared to other major west coast locales, an upward trend is becoming evident. Although the economic forecast has shown signs of improvement since late 2023, the effects of the new restrictions are yet to be determined.

 

Now, let's review the figures provided:

 

Between 2017 and 2024, there has been considerable fluctuation in various sectors. Overall, there was a marked total increase of 27.2% in 2020 followed by a significant decline of -13.4% in 2023, recovering slightly to 6.7% in 2024.

 

The Residential sector saw a striking 49.2% rise in 2020, followed by a harsh drop to -21.8% in 2023, then a small recovery to 8.2% in 2024. The Commercial sector remained relatively stable, with a notable drop to -10.6% in 2021, stabilizing to a 6.1% growth in 2024.

 

Manufacturing experienced some volatility, with a drastic drop to -12.1% in 2017, then a significant increase to 12% in 2022, followed by a considerable decline to -11.1% in 2024. The Healthcare and Education sectors displayed similar patterns, with the former showing a peak in 2020 and a low in 2023, and the latter reaching its low in 2022, followed by slight recovery in 2024.

 

The 'Other Structure' and Infrastructure categories also exhibited variability. Infrastructure had the most pronounced swing, with a high of 12.7% in 2020 and a low of -15.4% in 2022, rebounding significantly in 2024 to 12%.

 

Overall, these figures reflect the volatile nature of the market, with sharp increases followed by drastic declines in many sectors, likely due to external influences like the interest rate hike and water supply concerns. It remains to be seen how the Phoenix market will adapt to these ongoing changes.