A best-performing cities index shows Tucson’s economy is finally on the move. Workforce demands will mean a need for more Tucson commercial space.
After nearly a decade of poor job growth and weak economy, Tucson has made a big move to not only get back to the U.S. average, but to surpass that benchmark in the near future.
Tucson showed so much improvement that it had the third biggest jump in the Milken Institute’s Best-Performing Cities 2018 index. The report was released in January 2019.
The Tucson metropolitan area leaped from 154th in the 2018 rankings to 102th out of 200 large cities that were studied by the Milken Institute for its annual report.
It’s the best showing since 2010, when Tucson ranked 77th. Between then and 2018, the highest slot that Tucson held was no. 112 in 2011.
I like the Milken report because it measures how well cities are creating and keeping jobs and growing economies. These conditions drive the use of Tucson commercial space to support these workers in their jobs and personal lives.
This year the report shows that we are doing the right things to add to the local workforce and drive development of Tucson commercial space to meet growing demand.
Here are some indicators that are moving in positive directions. The U.S. average is set at 100 points.
- The short-term job growth (August 2017-August 2018) earned 100.41 points. That was a jump of 92 points over last year.
- The one-year job growth (2016-2017) earned 99.97 points, a 63-point jump.
- The one-year wages and salaries growth (2015-2016): 99.17 points, up 44 points.
The five-year job growth and five-year wages and salaries growth measured below 97 points each. These measures still reflect Tucson’s sluggish economy right after the end of the Great Recession.
It’s obvious to Commercial Real Estate Group of Tucson that the increases come from Tucson’s successful efforts to attract job-dense employers such as Target, Caterpillar, HomeGoods and Amazon.
What I’m most excited about is the picture drawn by the index’s metrics on high-tech output. I believe that these industries are crucial for Tucson’s economic health and the growth of Tucson commercial space. The report agrees.
“Knowledge-based economies—those with innovation industries and skilled labor at their core—have done well on the…index in recent years by adapting to economic and political changes,” it says.
Tucson has done well in these measures in recent years and continues to get better.
- The one-year relative high-technology GDP growth (2016-2017) scored 101.69 points, an 88-point rise over last year and above the national average.
- Tucson’s high-tech GDP location quotient (LQ) in 2016 was 1.17. Anything over 1.00 means the concentration of high-tech workers is higher than the U.S. average.
The Milken index counted 10 high-tech industries in Tucson whose output was higher than the U.S. average. The index tracks 19 industries for its measure of the number of high-tech GDP LQ over 1.
There are several other indicators that Tucson’s high-tech workforce makes the metropolitan area a major force in associated industries.
A recent study by the Oliver Wyman Forum examined U.S. Bureau of Labor Statistics to rank Tucson as the second fastest-growing technology metropolis in the United States.
The forum’s City Readiness initiative is aimed at helping cities thrive in increasing urbanization and technological innovation. It took a look at the growth of computer-related jobs between 2007 and 2017. Those jobs included computer systems analysts, computer and information systems managers and computer programmers. It also measured job growth among developers of application and systems software.
For urban areas with 1 million to 3 million people, Tucson showed a growth rate of 33%, as did Austin, Texas.
The Orlando-Kissimmee-Sanford area in Florida logged a 36% increase in tech jobs. Salt Lake City came in fourth at 31%. The study compared 34 metro areas, including Charlotte, North Carolina; Portland, Oregon; Las Vegas, Nevada; Sacramento, and New Orleans.
Recent bureau statistics show Tucson has higher-than-average LQs for medical scientists, hydrologists, software developers and electrical and electronics engineers.
And a 2016 Brookings Metropolitan Policy Program study showed five advanced-industry workforce areas in which Tucson has specialized-level LQs. It also found that Tucson had seven areas with better-than-average LQs.
Tucson Commercial Space Assets
These results tell me that Tucson has been successful in attracting many high-tech companies with good-paying jobs, especially in aerospace and defense, optics, biosciences and biotechnology, mining and smart transportation.
Sun Corridor Inc., the University of Arizona’s Tech Launch Arizona, Startup Tucson and local venture capitalists have worked hard to attract and develop companies, which eventually require Tucson commercial space.
Industry development organizations like the Arizona Technology Council’s Optics Valley have focused their efforts to support and grow local companies. For instance, Optics Valley has recently received a Small Business Administration (SBA) contract to further invest in optics in Arizona.
Pima County and the city of Tucson have done their parts by developing synergistic areas for development such as Opportunity Zones, the Sonoran Corridor, the Southwest Employment and Logistics Center and the Aerospace Research Campus.
Toss in the UA’s Tech Parks Arizona and there is plenty of room and enthusiasm to continue Tucson’s upward climb in workforce and economic vitality.
To learn more about available and developing Tucson commercial space, particularly for high tech, contact Commercial Real Estate Group of Tucson at email@example.com or +1-520-299-3400.