Arizona Economy Update
Despite some indication that the economy might be slowing, experts are generally optimistic about Arizona’s resilient recovery. The state’s economy is showing signs of normalization, with quit and hire rates returning to pre-pandemic levels. Solid gains have been reported in the labor market, and population growth, though modestly slowing, remains robust.
In the first quarter of 2024, the Economic and Business Research Center (EBRC) released an updated forecast that continues to reflect a strong economy. According to the report, personal income in Arizona rose by 6.5% in 2023, up from 4.9% in the previous year. This indicates that while there may be some normalization, the growth trend remains intact.
Arizona boasts other strong indicators, such as job gains that have continued at a solid pace. Although the unemployment rate ticked up slightly, it remains historically low. Additionally, the state’s population growth through mid-2022 was driven by accelerated net migration, which is critical as the economy continues to diversify and attract new businesses.
Another key area of resilience is the state’s housing market. While single-family housing permits declined significantly in the second half of 2022, primarily due to housing affordability concerns, Phoenix inflation rates have eased but remain rather rapid. These trends suggest that the state is navigating the challenges associated with rapid growth effectively.
Looking forward, experts are bullish on the state’s prospects. ASU economists predict a decade of job growth in various sectors, including health care, public administration, manufacturing, and more. Furthermore, the state’s semiconductor industry is poised to become a major driver of the Arizona economy. This deepens the optimism among economic experts for the next decade, as the state’s friendly business environment and strong economic fundamentals are expected to continue attracting new commerce and investment.
In general, while there may be minor bumps along the way, Arizona’s economy is expected to maintain its resilience and continue its strong growth trajectory over the next decade.
