Ring’s Reflections

Ring's Reflections: The 'Five C's' impact on today's Arizona economy

2014-05-08T00:00:00Z Ring's Reflections: The 'Five C's' impact on today's Arizona economyBob Ring Special to the Arizona Daily Star Arizona Daily Star

In the final installment in this series, we’ve arrived at the question of how much the historic bedrocks of our economy, Arizona’s traditional Five C’s affect the current state economy.

Size of our economy

First let’s look at the significant contributors to Arizona’s economy today. A useful measure to compare industry groups is Arizona’s Gross Domestic Product (GDP). Think of GDP as the state’s adjusted gross income.

Using the latest data available, the U.S. Bureau of Economic Analysis assessed Arizona’s GDP for 2012 at $267 billion, and broke down this number into the contributions of each economic sector.

The accompanying pie chart displays the results.

Arizona’s total employment in December 2012 was 2.78 million people.

Five C’s today

The contributions of the Five C’s to Arizona’s economy are largely contained in the 7 percent piece of the GDP pie chart labeled “Mining, Agriculture, Leisure and Hospitality.”

Mining includes copper, molybdenum, coal, gold, silver and uranium for a GDP total of $5.1 billion, of which $4.37 billion was from copper mining. Copper mining’s workforce was approximately 10,500 people.

The agriculture category includes livestock and crop production for a GDP contribution of $2.1 billion.

Livestock covers cattle, including beef and a sizable dairy industry, hogs and pigs, sheep and lambs, and goats. Cattle ranching accounted for revenues of $1 billion.

The most important crops in Arizona, in order of production value, were hay, lettuce, cotton, wheat, corn, broccoli, cauliflower, citrus and barley. Production value for cotton was $300 million and for citrus, approximately $38 million. Total farm labor was estimated at around 20,000 people.

There is no GDP element to measure the dollar value of climate.

In my previous column, I wrote about how the importance of Arizona’s fabulous climate was most directly reflected in tourism and travel to our state.

So to get some kind of handle on the economic value of climate today, let’s continue to look at the value of travel.

The Leisure and Hospitality GDP piece in the pie chart includes arts, entertainment, recreation, accommodation and food services.

Much of that is related to travel. There are also travel-related revenues associated with all the other economic sectors.

According to Dean Runyon Associates in a report of Arizona travel, the GDP contribution of the travel industry was $7.6 billion in 2012, with employment of 161,300 people.

So the contribution of the Five C’s to Arizona’s 2012 GDP was approximately $13.3 billion of the total of $267 billion, or about 5 percent of Arizona’s current economy.

Future of the five C’s

That relatively low portion of the Arizona economy is not likely to grow much. Copper and cattle production and climate-related travel should sustain or even show modest growth. The smaller contributions of cotton and citrus are expected to continue their recent decline.

Comparing the Five C’s employment to total state numbers confirms the modest impact of the Five C’s on the overall Arizona economy.

According to Linda Obele, writing in the Phoenix Business Journal in 2010, the bigger growth opportunities for Arizona’s future economy are aerospace/defense, technology, renewable energy, health care and small businesses.

Obele quoted Barry Broom, then president and CEO of the Greater Phoenix Economic Council: “The idea that these industries (the Five C’s) are not economically important is a mistake. But you can’t change the economy unless you’re in growth markets.”

Let me conclude by repeating something from the introduction of this series, a comment by Bruce Dinges, publications division director for the Arizona Historical Society, quoted in the Arizona Capitol Times in 2012:

“The cowboy, the miner, the farmer, the fruit grower and the health-seeker are inextricable parts of our history — and our mythology. They personify who we are and what we strive to be. But, most of all, they are reminders of the optimistic outlook and pioneering spirit that continues to motivate Arizona and Arizonans. From this perspective, they are as relevant as ever.”

Bob Ring is a longtime Southern Arizonan and avid historian. E-mail him at ringbob1@aol.com

Selected sources and information: “Arizona Industries Move Beyond the 5 C’s,” Linda Obele, December 2010; Arizona Travel Impacts, 1998-2012, Arizona Office of Tourism, 2013; Bureau of Labor Statistics Data, Arizona Labor Force Timeline, 2014; Comparative Economic Indicators: Year vs. Year Analysis of Real Total Industry Earnings, Arizona, 2000 vs. 2012, Arizona Regional Economic Analysis Project; Economic Impact of Mining on Arizona, Arizona Mining Association, 2012; U.S. Bureau of Economic Analysis, Gross Domestic Product by State, 2013; U.S. Department of Agriculture, Arizona Annual Livestock and Arizona Annual Crops, 2013; “5 C’s: A Vision of progress and prosperity for more than 100 years,” Arizona Capitol Times, Aug. 6, 2012.

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

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