The local paper in Phoenix, The Arizona Republic, published a great summary about the Arizona economy and my favorite topic—Jobs. Please take a look below for the full article, but here are a few highlights:
–We are still at 60% of jobs recovered from pre-recession numbers.
–Construction, typically our get-out-of-the-slump card, is severely lagging.
–One bright spot is medical expansion. Arizona is becoming quite the spot for destination treatment, including the fabulous Banner MD Anderson facility in Gilbert. (Ok, that’s a plug for one of my favorite not-for-profits.)
–Education continues to lag compared to the rest of the US. This will be a topic of continued discussion during the next few months. I know both candidates for Governor are focused on this campaign hot potato.
I am bullish on Arizona, not just because this is my home and my family’s home for over 100 years. I believe this state has its best days ahead of it. The slow recovery aside, I believe the future looks bright.
5 Measures of Arizona’s Economy As Fall Season Arrives
By: Ronald J. Hansen
August 31, 2014
(Photo: Charlie Leight/The Republic)
Labor Day has become the unofficial end of summer. As it was intended as a celebration of workers, this seems a good time to ask whether workers have much to celebrate in Arizona. Here are five measures of the state’s economy heading into the fall, with some bright spots highlighted.
1. Jobs remain scarce
Before the Great Recession, Arizona’s unemployment rate stood at 4 percent and the state was awash in growth. Five years after the downturn technically ended, Arizona has restored less than 60 percent of its recession job losses. The state has a 7 percent unemployment rate. Both of which are well behind the national average.
Bright spot: Much of the expected growth in jobs over the next two years will be in health-care services, retail positions and in the hospitality industry, said Aruna Murthy, director of economic analysis for the Arizona Office of Employment and Population Statistics. Arizona also should continue to see rapid growth in jobs in financial activities, although it remains a small portion of the overall workforce.
2. Wages are flat
For those who have work, wages in Arizona have scarcely moved in recent years after adjusting for inflation. While employers have groused that skilled construction workers, for example, are hard to find, the expected wage inflation in those fields hasn’t materialized, said Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W.P. Carey School of Business at Arizona State University. Instead, the state typically sees about 2 percent annualized wage inflation, he said.
Arizona isn’t unique in having relatively flat wages. It has been happening nationally for years.
Bright spot: It is hoped that as jobs in health-care services and the financial sector continue to grow in Arizona, that growth will help lift the average wage profile for workers here. CEOs increasingly cite Arizona as a desirable place to do business, in part because of relatively low taxes and low worker costs, McPheters said.
3. Construction hasn’t recovered
No industry personifies Arizona’s boom-to-bust character better than construction. The field peaked at 244,000 workers in mid-2006 and today employs 118,000. The loss of its relatively good wages also has rippled through the wider economy. “The big surprise has been that construction is dead in the water, and that’s been one of our drivers,” McPheters said.
Murthy said hopeful near-term signs in construction are still hard to find. Permits for residential construction have picked up recently, suggesting more work may come in the months ahead, she said. But construction of non-residential buildings in particular has fallen off.
4. Spending is low
Not surprisingly, a weak job market and relatively flat wages have hurt Arizonans’ buying power. Per capita spending remained lower in Arizona in 2012 than it was in 2007, even after adjusting for inflation. Only Nevada fared worse. It takes money to spend; too many Arizonans have too little of it.
Bright spot: While spending figures aren’t great, they are improving. Retail sales have been steadily rising, and sales of autos in particular have grown sizably in recent years. Vehicle sales are back to 80 percent of pre-recession levels.
5. Education still matters
Arizona ranks 29th in the nation in the percentage of adults with four-year college degrees or more and eighth in the U.S. for the percentage of adults with less than a ninth-grade education. Add to the data a troubling reputation as a state that spends relatively little on primary education. States that tend to have greater shares of college-educated workers tend to have higher incomes.
And when considering whether to relocate to a new state for work, executives and other college-educated parents also consider education quality.
Bright spot: While the educational picture at the state level isn’t great, college attainment in the Phoenix area generally matches the U.S. as a whole. However, compared with other metro areas, Phoenix still lags in four-year degrees.