PHOENIX — Economist Aruna Murthy had a few words about the state’s projected job growth Thursday when she made her predictions.
“Stagnant.” “Slow.” “Subpar.”
That’s based on her forecast that Arizona employers will hire just 53,500 new workers all of this year. That means the number of Arizonans working at the end of this year will be just 2.1 percent higher than it was at the beginning of 2014 — the same slow growth rate the state has recorded for the past two years.
Murthy, the director of economic analysis for the state Department of Administration, said the largest growth rate will be in Maricopa and Pinal Counties, where she predicts employment will increase this year by 44,600. But even that picture is hardly rosy: Those two counties added 48,500 workers last year.
And everywhere else is expected to fare worse.
Murthy figures Pima County will add 4,400 workers this year, just a 1.2 percent year-over-year growth.
At this rate, she and her staff predict the state won’t reach its prerecession employment levels until sometime in 2017. And that recovery won’t be across the board.
Leading the prediction for growth for this year and next is the state’s health care industry.
Anticipated population growth will lead to the continued need for more doctors and urgent care centers. Murthy figures employment in places like doctors’ offices and urgent care centers will grow 3 percent this year and 3.2 percent in 2015.
There also will be increases in employment in the traditionally lower-wage segments of the economy like retail trade, which is likely to see a 3 percent jump in the number of workers, with a 3.8 percent growth rate in the number of people working at bars and restaurants.
At the other end of the spectrum, Murthy says Arizona’s manufacturing industry will lose jobs this year, with the potential for small growth in 2015. She said there are no signs employment in that sector of the economy will come back to where it was in 2006 in the foreseeable future — if ever.
Economic uncertainty is the issue, starting with consumers. Arizonans are putting more money into savings. “It tells you that people are not willing to spend as much as they would like to spend,” Murthy said.
She said consumers are still uneasy about their jobs and not willing to take on new debt. In fact, many people are using the money they have to pay off existing debt instead.
At the same time, Arizonans are earning less now than they were before the recession.
In inflation-adjusted dollars, Arizona per-capita income was $39,819 in 2007, compared with $37,078 in the most recent figures available.
That, in turn, leaves companies unsure of demand and unable to make business investments, Murthy said.
The dim prognosis for manufacturing employment comes despite the fact Gov. Jan Brewer has made a big push to attract these firms to Arizona. Just last month she signed legislation to exempt such firms from having to pay the same state sales taxes on electricity and natural gas that other companies and individuals pay.
That’s on top of previously approved measures specifically aimed at manufacturers, like one that gives them the ability to base their state corporate income tax on what percentage of their products they sell within Arizona. Put another way, a firm that makes items solely for the military can now escape this tax entirely.
But Murthy said other factors are working against such efforts.
One is that much of Arizona’s manufacturing sector is linked to defense and other federal spending that faces budget restraints.
That showed up in the most recent employment figures, which found employment in computer and electronic parts jobs down by 1,800 in the last year, with a 1,300 year-over-year drop in jobs at aerospace firms.
Moreover, as companies automate, items that used to be made by humans are now being built by expensive machinery, Murthy said.