SIERRA VISTA — Major sectors of the local economy are near the end of the slump caused by the recession and are ready for an upswing by the end of 2009, according to a local economic research group.

Speaking to hundreds of local business and city leaders at the 2009 Sierra Vista Economic Outlook Luncheon on Wednesday, Robert Carreira, director of the Cochise College Center for Economic Research, said that losses seen in markets such as construction and retail are likely to level off in the coming months, and they could see improvements by the end of the year.

“If you look at the history of recessions, and how long they typically last, there’s a good chance the current one is near its end,” Carreira said.

“I think retail sales are near the bottom (of the recession),” he said, calling this the “longest recession of the post World War II period.”

Carreira said he looks for sales to begin to show signs of improvement before 2010.

“I expect that to occur later this year,” he said. “Perhaps around the holiday shopping season.”

Prior to that, Carreira said he sees local restaurant and bars sales, which have been in a recession since October 2007, gaining ground this year.

“I expect a recovery of restaurant and bar sales probably sometime in the first half of 2009,” he said.

The slowdown of new home construction may have ended even earlier than other areas of the local economy.

“On the city level, it looks like the bottom may have come in 2007,” he said.

Home prices should maintain their current levels or see a slight decrease this year, he added.

During his presentation, Carreira pointed out the many milestones marking the recession, like a 6.3 percent drop in gross domestic product in the final quarter of 2008, “the largest single quarter drop in production since the first quarter of 1982.”

His prediction that inflation will remain in check in the near future — “due to all the downward pressure on prices” — was tempered by concerns that extra cash printed by the government to pay off its debts will be problematic in 2010.

“Increasing the money supply is the classic definition of inflation,” he said. Pressure to keep prices down will be alleviated as the economy recovers, “but all that new money will still be out there.” Carreira said he has doubts about Treasury Secretary Timothy Geithner’s plan to have that extra money removed from the economy in time.

“There’s a potential that inflation will become a concern in 2010,” he said.

In a speech following Carreira’s economic assessment, Sierra Vista City Manager Chuck Potucek extolled the benefits of living in Sierra Vista during tough economic times with a top 10 list that included the city’s emphasis on public safety, which he illustrated with images of the new Sierra Vista Fire Department Station 3 and an artist’s rendering of the upcoming additions to the Police Department.

Herald/Review reporter Derek Jordan can be reached at 515-4680 or by e-mail at derek.jordan@svherald.com.

WHERE TO CONTACT

If you want more information about Sierra Vista’s economy or to see a copy of the Sierra Vista Economic Outlook 2009, call the Center for Economic Research at 515-5486, send an e-mail to cer@cochise.edu or go online to www.cochise.edu/cer.