Thanks to booming tourism and a growing tech industry in the Valley, the economic forecast for the area seems to be strong.
Team members from KDI Wealth Management, a financial planning firm founded in Payson in 2005, presented a hopeful forecast for 2026 during the Tuesday, Dec. 2, Rim Country Regional Chamber of Commerce Economic Forum at The Rim Club, 300 S. Clubhouse Road.
After a brief introduction, KDI Wealth Management CEO Kevin Dick asked those in the room whether they were optimistic about the economy going into the coming year.
“For those of you who are bullish, we would agree. We would agree cautiously,” said Dick. “In fact, we just got the Auto Sales Report, which is a leading indicator of the economy, and auto sales are actually good. They’re not as robust as they were a year ago, but they’re good. Real estate is still forecasted to grow 3 to 4 percent.”
Historically, the average growth of real estate over time in the state has been 2 to 3 percent, said Dick. “It’s not overvalued. And we also know that with inflation, the cost of goods to build a home have gone up substantially.” He said there was more good news that the price of lumber is starting to come down for the first time in almost a decade.
An unknown factor will be whether interest rates will be reduced, said Dick. “Interest rates actually do more to facilitate the sale of homes than pricing.” He said that he hopes that the rate will remain in the normal range of around 6%.
As a rule, Dick said, Arizona’s Gross Domestic Product grows at around 1 to 2%. “We’re looking at real estate to stay in that same realm, staying at a normal pace.”
KDI Wealth Management Associate Advisor Dylan Justice said that overall, financial markets have been doing well, adding that the key to contemporary investing is to keep a diversified portfolio.
“It’s been a little bit challenging with the administration,” said Justice. “There have been a lot of changes. And people don’t want to invest a lot of money when they don’t know the rules they’re playing by.” He said that the market was shaken up by policy shifts and the recent government shutdown, “but monetary policy is improving.”
Justice said that retail trends show that people are still spending money regardless of their stated feelings about the current financial situation.
“That’s one of the main reasons we look at spending. When people really stop spending money, that’s when they’re really hurting. People are saying they are hurting at the moment, but the spending backs up that the money is still there.”
With billions of dollars being spent to build out Artificial Intelligence technology, companies like Intel and Nvidia are expected to continue to have a huge impact on market trends. That’s good news for Arizona, which is a major player in the microchip industry.
Still, Justice said that international stocks have been outperforming domestic markets, partly due to a recent decrease in the value of the dollar, “so you want to make sure to diversify.”
To summarize, Dick said, “we’re expecting 1 to 2% growth. We’re expecting tourism to continue to dominate as an industry in Arizona. Second this year is going to be tech.”
He said that during the COVID-19 pandemic, many people rediscovered the outdoors, “which is really good thing for Payson.”
“The economy, it is shifting from mining and ranching to healthcare, education, services and tourism,” said Dick. “Tourism is consistent across all four seasons, and it has become a boon for rural Arizona. Off the charts.”
