"Tucson's economy will regain momentum next year after a somewhat sluggish performance this year," according to UA Eller Economist George Hammond.
Still, Hammond believes when preliminary numbers for 2017 are finalized, the year will look better than first thought.
"More reliable job estimates have begun to trickle out and they show stronger gains in the first three months of the year," he said.
That should give the economy momentum going into the new year.
Housing permits were up 13.6% in the first nine months of 2017 over 2016. A strong housing sector will help lead the way to a stronger 2017.
Housing prices were up 7.6% in Tucson year to year which is good news for builders.
Hammond believes there will be an increase in jobs in the manufacturing sector, specifically the aerospace industry paced by Raytheon, which is increasing its workforce.
"Tourism is seeing an increase," Hammond said which should give rise to an increase is service sector jobs.
Banking and financial services should also do well in 2018 he believes.
Hammond sees an increase in wage growth in the state but that's generally because of a voter passed initiative raising the state's minimum wage.
Wages could "accelerate from 2.4% in 2016 to 3.2% this year," Hammond said. Incomes, he predicts could rise as much as 4.8% in 2019.
Government spending is on the increase again which fuels 20% of the Tucson economy. Tucson has an over reliance on government jobs, 22%, but when the federal government and federal economy is improving, it drives the local economy as well.
That bodes well for increased spending in the coming year which fuels expansion.
If there is a dark cloud on the horizon, it's the devaluation of the Mexican peso.
The peso has lost 44% of its value against the American dollar since 2014 which has in turn led to a 19.4% decrease in exports to Mexico, Arizona's largest trading partner.
Tucson also relies on Mexican shoppers for the holiday season but despite the peso devaluation, shopping continues strong.