Economic Update

Sandra Watson

President and CEO Arizona Commerce Authority

If you’ve been reading the headlines, you know we have incredible momentum in Arizona right now. Our economy is growing and we are recognized as a “hotbed” of entrepreneurial activity.

Just recently, Arizona was nationally highlighted in the New York Times and INC Magazine for our surging start-up culture. Forbes, Fortune, and Fast Company have also recognizes Arizona as a top place in the country to start up, scale, and succeed.

There is great news for 2017 on the job front as well. Arizona’s unemployment rate continues to decline. According to data released in October 2016 by the Arizona Office of Economic Opportunity, the unemployment rate in Arizona has dropped to 5.5 percent. Over the past year, private-sector employers in Arizona have added 61,800 jobs at a rate of 2.8 percent, well above the national average of 1.9 percent.

Tech-sector job growth is particularly robust. Just a few months ago, CBRE ranked Phoenix as a top technology growth market in the U.S. Phoenix came in at No.2, with a 44.5 percent increase job growth that added over 15,000 new jobs from 2013 to 2015, according to the commercial real estate group’s Tech-Thirty report.
This is excellent news for all Arizonans. As the state’s leading economic development organization, the Arizona Commerce Authority (ACA) attributes this success to Governor Ducey’s leadership and vision to make our state the best place for business.

I am proud to report that the ACA is on track to achieve back-to-back, record-breaking quarters for Fiscal Year 2017 (July 1, 2016- Dec. 31, 2016), by exceeding goals for job creation and capital investment. We have had companies ranging from innovative start-ups to global brands expand their operations across the state. Here are some highlights:

ADP, a global human-resources services provider, selected Tempe for its expansion, making a $33.75 million capital investment and creating 1,500 projected new jobs.

Vector Space Systems, a micro-satellite space launch company, plans to develop its corporate headquarters and advanced manufacturing facility at the Pima County Aerospace, Defense and Technology Business & Research Park, creating 400 projected new jobs. Vector is made up of veterans from companies, such as SpaceX, Virgin Galactic, McDonnell Douglas and Sea Launch.

McKesson, a Fortune 500 healthcare services and information technology company, will occupy a 271,000-square-foot office complex in the Salt River Pima-Maricopa Indian Community. The building will be home to McKesson’s existing Scottsdale-based workforce of more than 1,400, with room to accommodate nearly 2,200 total jobs over the next five years.

SK Food Group Inc., a leader in the manufacturing and wholesale food-sales industry, will expand its operations into Arizona in a new 212,000-square-foot manufacturing facility in Tolleson. This project will create 550 projected new jobs.

Huhtamaki North America, a food-packaging leader, plans to open a new manufacturing and distribution center in Goodyear. When completed, the 750,000-square-foot facility will create approximately 300 projected new jobs and generate a capital investment of over $100 million.

These wins all demonstrate that our state’s assets – an unmatched quality of life, exceptional talent, limited regulation and culture of innovation – are things CEOs and entrepreneurs look for when they make decisions about where to start up, locate or expand. Arizona’s economy continues to accelerate and be on the rise because of it.