Tucson's Job Growth Hits a Higher Gear

Author(s)
George Hammond, Ph.D., EBRC Director and Research Professor
Published
09-01-2016

Job growth in the Tucson MSA hit a much higher gear during the past year (Exhibit 1). In fact, preliminary data from the U.S. Bureau of Labor Statistics suggests that Tucson’s over-the-year job growth hit 14,900 in July, which translates into a gain of 4.2%. Tucson’s job growth outpaced the nation (1.7%), Arizona (3.0%), the Phoenix metropolitan area (3.1%), and all other metropolitan areas in the state except Prescott (6.4%).

Further, our growth has been fast compared to other similarly sized metropolitan areas in the U.S. In fact, Tucson ranked 3rd out of all metropolitan areas with 500,000 or more residents. (Bloomberg article)

What drove the job growth? As Exhibit 2 shows, most of the net job gains were in education and health services; government (especially state and local education); financial activities; and professional and business services. Tucson also generated solid growth in leisure and hospitality; manufacturing (including aerospace); trade, transportation, and utilities; and information. Construction; other services; and natural resources and mining posted modest job losses.

The strong job growth in July is particularly striking and the industry composition of that growth is a bit odd. Note that we normally see a substantial drop in state and local government education jobs in June and July.  The drop this year was much less severe than in June-July 2015. What really stands out from the data is the unusually poor performance of this sector last year, not so much the strength this year. Without the strong over-the-year growth in education, Tucson’s job growth would have been 3.6%. That’s still strong, but not in the top 10.

Keep in mind that the job data so far this year is preliminary and will be revised in March 2017. During the past couple of years those revisions have been large and have reduced the employment estimates. For instance, last year the preliminary data suggested that Tucson added 5,000 jobs from 2014 to 2015, for 1.4% growth. When the final data were released, job growth was revised down to 2,900 jobs (0.8% growth). The Economic and Business Research Center's (EBRC) preliminary evaluation suggests we may well see a downward revision of the 2016 data. Overall, even with a downward revision to the current data, EBRC believes that the Tucson metropolitan area is adding jobs at a much faster clip this year than it did last year.

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