Most will likely occur in the Phoenix area while Tucson continues to lag in recovering from the 2008 recession.
In the race of states to attract new business, Arizona is gaining ground on its economic development efforts and looks good for greatly improving its economy in the next five years, according to recent magazine rankings.
Sadly, Tucson is not pulling its share of economic development for the Grand Canyon state.
Both Forbes and Area Development Site and Facility Planning magazines give Arizona high marks for its efforts to attract companies with high-quality economic development.
Arizona in Top Half of Forbes List
Forbes magazine ranked Arizona 22nd in its annual “Best States for Business” list for 2014. We at Commercial Real Estate Group find that just about right, in line with Arizona’s 19th ranking in the Pollina Corporate Top 10 Pro-Business States for 2014.
“The Grand Canyon State’s job and economic growth forecasts over the next five years are among the best in the United States,” says the Forbes ranking based on six factors. “Population growth through 2018 is expected to be the fastest in the country.”
This is how Arizona fared in the six factors based on historical data:
- 5th in growth prospects
- 17th in labor supply and in regulatory environment
- 25th in business costs
- 40th in quality of life
- 47th in economic climate.
While Arizona’s economic climate was dismal in the last five years, according to the report’s metrics, its future is promising.
Arizona Wins Silver Shovel Award
Area Development gave one of its 2014 Silver Shovel Awards to Arizona for its “achievements in attracting high-value investment projects that will create a significant number of new jobs in their communities.”
Arizona was one of three to win the silver award in the category of states with populations between 5 million and 8 million. The other two were Indiana and Tennessee. Missouri won the category’s top honor called the Gold Shovel Award.
“Bioscience is quite strong, generating $36 billion in annual revenue and employing more than 100,000 workers,” the magazine said about Arizona. It noted that the finance and insurance sector is expanding and that the “hottest sector” is IT.
The publication ranked states based on their top-10 job-creation and investment projects that started in 2013. Arizona’s top 10 projects totaled nearly 9,900 new jobs and represented a nearly $2.4-billion investment.
All of those projects occurred in the Phoenix-Mesa-Glendale metropolitan statistical area (MSA). That means Tucson, as the state’s second largest MSA, contributed nothing to the state’s award.
Tucson Near Bottom of Leading Locations
Indeed, when Area Development took a look at 379 MSAs to see what areas are in good positions to take advantage of the new economy, Tucson ranked a disturbing 313th.
Phoenix-Mesa-Glendale came in at 115th and Flagstaff earned a rank of 172nd in the “Leading Locations for 2014” list.
Tucson’s position was between Fresno, Calif., and Colorado Springs, Colo.
The magazine used four categories to rank the MSAs.
- In “Prime Work Force,” which measures the quality of the labor pool, Tucson ranked 259th.
- In “Economic Strength,” including employment and gross manufacturing product, Tucson ranked 305th.
- In “Recession-Busting Cities,” which measures how well cities recovered from the recession, Tucson was 312th.
- In “Year-Over-Year Growth Cities,” measuring short-term economic growth, Tucson came in 330th.
“This is a disaster for Tucson,” says Michael Coretz, principal of Commercial Real Estate Group of Tucson. “Granted, this report ranks areas based on past numbers, but this proves that we have not recovered yet from the recession and fare much worse than many, many other cities.”
Coretz believes there is positive movement, including
- The University of Arizona’s establishment of Tech Launch Arizona that will more quickly bring to market innovation and invention from its faculty
- better efforts to strengthen international trade with Mexico
- steady growth in the bioscience industry.
“However, we have a long way to go before Tucson can be a meaningful contributor to Arizona’s emerging success in bringing companies and their quality jobs to our state,” he adds.
Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States. For more information call 520-299-3400.