Wednesday, February 06, 2008

Construction Economy

These parts of Arizona aren't representative of the nation as a whole, but they aren't unique either. Growing regional economies were essentially feeding themselves.

PHOENIX -- When residents of Maricopa, Ariz., south of Phoenix, vote in the presidential primaries Tuesday, it will be against a backdrop of vacant storefronts and sprawling, terra-cotta-roofed subdivisions that are studded with for-sale signs as far as the eye can see.


And while the region counts the aerospace company Honeywell International and computer chipmaker Intel among its largest employers, housing is the biggest component of the local economy, with construction accounting for nearly one in 10 jobs, or about 50 percent more than the national average.

"Our economy out here is based on residential growth. That's our engine," said William A. Gosnell, a principal in Lee & Associates, one of Phoenix's largest commercial real estate firms. But with housing inventories and foreclosures up and prices down, residential construction slowed to a crawl, crippling the overall economy in the process.