AZ could add 59,000 jobs next year, but not many in Tucson

2013-11-08T00:00:00Z AZ could add 59,000 jobs next year, but not many in TucsonBy Howard Fischer Capitol Media Services Arizona Daily Star
November 08, 2013 12:00 am  • 

PHOENIX — There will finally be as many people working in Arizona at the end of next year as there were in 2005.

But a new report Thursday shows it will take perhaps three more years for state employment to match its pre-recession peak in 2007.

And even at that point, Arizona’s jobless rate won’t be anywhere close to what it was — below 4 percent — before the economy went into the tank. That’s because while there will be as many jobs as there were in 2007, the state’s overall population will have grown.

Aruna Murthy, director of economic analysis at the state Administration Department, questions whether Arizona will ever see unemployment numbers that low again.

The most recent figures put Arizona’s jobless rate above 8 percent. The “new normal” unemployment rate for the state — if and when it gets there — could be in the 6 percent range, Murthy said.

Not surprisingly, most new jobs will be in the Phoenix metro area, where about 70 percent of the population already resides.

That area of the state will get even more than its fair share of the 59,000 jobs Murthy expects for 2014. She figures 46,700 of the new jobs — or four out of every five — will be in Maricopa and Pinal counties.

Pima County is expected to add 7,800 jobs in 2014, with the other 13 counties dividing up the 4,400 remaining.

The report was released the same week that Gov. Jan Brewer announced two new employers in the Phoenix metro area: a supplier for Apple, and Gigya.

Asked what Brewer has done to land companies elsewhere in Arizona, press aide Andrew Wilder provided no specific examples.

Instead, he said the Arizona Commerce Authority, which Brewer chairs, has been instrumental in creating 1,300 jobs in rural Arizona since its inception more than two years ago. The authority also provides grants to rural communities to make infrastructure improvements to attract employers, he said.

With the Phoenix-area employment propping up the numbers, Murthy said Arizona is posting faster job growth than the national average.

But even at that, Arizona has recovered fewer than half of the more than 300,000 jobs lost since peak employment in late 2007. By contrast, the national average for job recovery is at 78 percent of pre-recession levels.

More jobs will not necessarily translate into better pay for Arizonans.

Per-capita income, a figure of all income against population, now is $34,806. In inflation-indexed dollars, it will drop by $2 by 2014, Murthy said. In 2007, the figure for Arizona was $36,229.

Some of that loss may be due to the state’s increasing elderly population, who get added to the equation even though they are not employed. And the output per employee in Arizona is less than the national average, said Jack York, a senior economist at the Administration Department.

Whatever the factors, Murthy thinks wages in Arizona will remain essentially flat.

Not all segments of the state’s economy will grow at the same rate.

One of the biggest increases, at least on a percentage basis, will be in Arizona’s beleaguered construction industry. Murthy figures its employment should increase by 7.1 percent in 2014.

But that will bring the total number of people working in construction up to just 132,700, only 54 percent of when the sector peaked seven years ago.

Murthy said she couldn’t say whether Arizona will ever need as many construction workers as it had in the boom days, when construction accounted for close to one out of every 10 people in the workforce.

“We may not need that many homes as in 2006 when the rate of population growth was significantly steeper,” she said.

The state’s health-care industry, which never was affected much by the recession, will continue to grow. The prediction is it will add 12,600 jobs in 2014, a 4.7 percent increase.

At the other extreme, Murthy is predicting anemic growth in the manufacturing industry: It will add just 1,500 jobs, or about 1 percent. She said much of this can be tied to cutbacks in federal spending, which directly affects the state’s aerospace companies.

The private education industry, which includes such giants as the University of Phoenix, is expected to shed 1,700 jobs overall, a drop of about 3 percent.

Thursday’s report also predicts that by December, Arizona will have gained 48,500 jobs this year. That is 20 percent less than Murthy had predicted in last year’s forecast for 2013.

There were factors that weren’t known at the time. The biggest is the “sequestration” of federal dollars, the forced cuts in military and civilian spending after Congress could not agree on a budget deal. Murthy figures that move alone lost the state between 10,000 and 15,000 jobs.

On top of that was the increase in the payroll tax rate that took effect earlier this year. And the three-week government shutdown also took a toll.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Most Popular

Featured businesses

View more...

Deals, offers & events

View more...