The Arizona Builders Alliance and the Arizona chapter of the Association of General Contractors held a Joint Economic Forecast Seminar Oct. 15 in Phoenix that featured AGC Chief Economist Ken Simonson who discussed Arizona’s construction industry and his forecast for the state’s 2015.

While much of the construction industry in America has been on a fairly steady upturn lately, Arizona remains one state is not following along with the trend, he said, citing such evidence as a loss of construction jobs and that spending had receded to early recovery levels. While Arizona construction firms might wish for greater growth, Simonson pointed out that the recovery has been stronger in Arizona — one of the most “sluggish” states in the U.S. — than in many other places.

“The U.S. is actually doing much better than most developed countries,” said Ken Simonson chief economist, Associated General Contractors of America. “One of the areas that is lagging is Arizona.”

He said there are three prime reasons for the slowing recovery, and especially in Arizona and New Mexico: Tight government spending; online shopping and the decline in needs for office space. He also noted that although Nevada has seen an uptick in activity recently, it is due to  their economy being more tied to the economies of other states due to its reliance on the gaming industry and tourism.

As far as the future is concerned, he said he sees that movement to spur public spending is not likely to change thanks to a reticence on the federal and local levels.

“Public spending stayed steadiest early on in the recession due to TARP and BRAC,” he says.

After TARP expired and government spending was even further curtailed, that sector has been hit especially hard, he says.

“Public spending, whether it be federal, state, or on the local level, has been scraping by,” he said.

As far as online sales are concerned, he says it has contributed to the soft retail construction market which is not likely to change. However, there is one small benefit, although it does not make up for most of the retail decline.