Arizona Department of Administration delivered a sobering Jobs Forecast Thursday predicting Arizona is projected to gain 114,000 Nonfarm jobs over the two projected years (2014 & 2015). This represents a growth rate of 4.5 percent over the two projected years. An over-the-year gain of 53,500 jobs is projected in 2014 and 60,400 jobs in 2015. The rate of growth projected for Nonfarm employment is 2.1 percent in 2014 and 2.4 percent in 2015. Arizona’s Nonfarm employment is forecast to continue a slow, subpar growth in 2014 and gradually gain momentum in 2015. This is consistent with improvement seen in many economic indicators.
While the U.S. has regained 95 percent of the jobs lost since its pre-recession peak, Arizona has recovered only 56 percent of lost jobs as of February 2014. Despite this discrepancy, the economic fundamentals in Arizona continue to improve. Ten of the eleven major sectors are forecast to see employment growth over the two forecast years. The housing market in Arizona continues to grow. Home prices are also gradually increasing but still lower than the pre-recession peak.
All sectors of the Arizona economy are projected to gain jobs during the 2013-2015 forecast time period with the exception of the Government sector. For the two forecast years, the major sectors with projected employment gains in descending order include: Educational and Health Services (24,200 jobs); Trade, Transportation and Utilities (24,000 jobs); Leisure and Hospitality (18,600); Financial Activities (17,200); Professional and Business Services (16,600 jobs); and Construction (11,700 jobs). Smaller gains are forecast in: Manufacturing (1,300 jobs); Information (700 jobs); Other Services (700 jobs); and Natural Resources and Mining (400 jobs). The only major sector with a projected loss is the Government (1,700 jobs).
The growth rate over the 2013-2015 forecast time period for various sectors in descending order of magnitude are: Construction (9.5 percent); Financial Activities (9.3 percent); Leisure and Hospitality(6.8 percent); Educational and Health Services (6.5 percent); Trade, Transportation and Utilities (5.0 percent); Professional and Business Services (4.5 percent); and Natural Resources and Mining (3.0 percent). Relatively, slower rate of growth is projected for Information (1.8 percent); Manufacturing (0.8 percent); and Other Services (0.8 percent). The only major sector with negative rate of growth forecast is the Government (-0.4 percent).
The state faces headwinds with respect to federal government uncertainty. Austerity policies adopted have slowed the pace of economic recovery to some extent as reduced government spending, employment, investment and higher taxes reduce the level of real, effective demand in the economy. There are risks from consumers that could add uncertainty to the forecast. Despite some job growth and lowering in the unemployment rate, many consumers in the U.S. continue to face employment insecurity, lower wages and high debt. Constrained budgets persist for a large majority of households inhibiting their spending ability.
There are many positive indicators suggesting improvement in the overall economy. An overall improving international economy is expected to foster economic activity on the domestic front. Economic indicators such as; GDP, employment, industrial production, wholesale and retail sales, capacity utilization rate, household net worth, income levels, consumer spending, residential real estate markets, private domestic investment are showing an improvement since the recession. There are also risks associated with uncertainties as mentioned above. However, we believe the positive factors listed above outweigh the uncertainties in support of our forecast.
Get detailed information, graphs and charts on Arizona data at www.azstats.gov