Employment growth projected to be lower: But Arizona stronger than other areas of country
PHOENIX – Arizona is expected to add jobs at a lower rate between now and 2024 than it has since the end of the recession.
Doug Walls, research administrator for the Office of Economic Opportunity, said Wednesday, Oct. 5, the total employment should grow by about 580,000 over the 11-year period studied, starting with 2014 numbers. He said that translates out to about a 1.9 percent annual growth.
That compares with a 2.3 percent growth rate annually since the recession ended.
Still, Walls said that 1.9 percent is expected to outpace the average of the rest of the country, where jobs are expected to grow at about 0.6 percent a year for the next 10 years.
“It might not be where the economy was in the past,” he told members of the state’s Finance Advisory Committee, a group of economists that predict revenue growth, “but relative to other economies around the nation, Arizona is coming in quite strong.”
Walls acknowledged, though, that there may be less to that growth rate than it seems.
Put simply, Arizona was hit particularly hard, losing more than 300,000 jobs during the recession, a drop of about 8.5 percent. That was one of the steepest in the nation.
“Our companies are still recovering from the recession we just went through,” he said.
One of the brighter spots, he said, is the state’s financial sector that includes banks, mortgage companies, insurers and real estate rental. It is expected to grow by more than 25 percent over the decade.
Still, that pales in comparison with construction growth, with jobs expected to grow at a rate of close to 4.1 percent a year.
But here, too, those numbers need to be put into perspective.
Prior to the recession, there were more than 244,000 people employed in construction in Arizona, or close to one out of every 11 jobs. That dropped by more than half, to fewer than 110,000.
So even after a 45 percent growth rate over a decade, that still will leave total construction employment in 2024 at close to 30,000 jobs short of where they were at their peak.
A lot of that, he said, is dependent on population growth.
Economist Elliott Pollack said there’s another connection between construction jobs and population – the state’s health care sector also continues to grow. In some ways, though, that is not surprising. It was the only segment that did not lose jobs during the recession.
Walls said he expects that sector to balloon even more as the state’s population ages and older people need more services. In fact, he predicted that the number of Arizonans 65 and older will more than double by 2050, outpacing other categories.
Pollack, also a member of the Finance Advisory Committee, had his own take on employment growth. He said it is the state’s leisure and hospitality industry – hotels, restaurants and bars – that has had the most rapid recovery from the recession of all the industries.
Conversely, Pollack said, manufacturing has regained only about a quarter of the jobs lost.
What’s important about all that, he said, is that jobs in the leisure and hospitality industry pay an average of $23,309 a year.
Many pay less, with other figures from the Office of Economic Opportunity showing the average salary for food preparation and storage jobs, including the fast food industry, at less than $19,000 a year. And close to 9.5 percent of all jobs in the state are in that subsector.
Pollack said there’s little sign that manufacturing will ever recover, not just in Arizona but nationally. So what that means is the state has been trading high wage jobs for those that pay less – sometimes a lot less.