Manufacturing Employment Opportunities in Tucson, Arizona MSA
How important is the manufacturing sector to the Tucson Metropolitan Statistical Area (MSA)? In 2023, 15.1% of Tucson’s Gross Domestic Product (GDP) was in the manufacturing sector. That was the third highest share of GDP among industries in Tucson.
In 2023, 15.1% of Tucson’s Gross Domestic Product (GDP) was in the manufacturing sector. Wages were also high in this sector, with an average of $106,129 per worker, which was $23,554 above the nation. Transportation equipment manufacturing, which includes aerospace products and parts, was by far the largest and highest-paying manufacturing sector in Tucson in 2023. In 2023, manufacturing accounted for 28,300 jobs or 6.9% of total employment in the Tucson MSA. That positioned manufacturing as the sixth-largest NAICS (North American Industry Classification System) supersector, which is used by federal agencies to categorize business establishments for economic data. It ranks behind government (19.0%), trade, transportation, and utilities (17.3%), private education and health services (17.0%), professional and business services (12.0%), and leisure and hospitality (10.9%). See Figures 1 and 2.
In 2023, Tucson at 6.9% had a larger share of manufacturing jobs compared to the state (6.0%) but a smaller share than the nation (8.2%). The employment distribution by industry in the Tucson MSA closely mirrored that of the United States in 2023, with notable exceptions in government jobs and those employed in the trade, transportation, and utilities sector. It is important to note that the employment share includes military positions within the federal government.
Figure 1: Tucson MSA Employment Shares by Industry in 2023
Figure 2: U.S. Employment Shares by Industry in 2023
One way to measure the importance of an industry is to look at its Gross Domestic Product (GDP) estimates. GDP shows the total value of all the goods and services created by the labor and capital in a certain area. GDP provides key information on the industrial mix of a region, this tells us which sectors are larger or smaller. This can provide valuable insight into how global and national events may impact local growth compared to other area.
In 2023, 15.1% of Tucson’s GDP was in the manufacturing sector, compared to 10.2% for the nation. That positioned the manufacturing sector as the third largest industry in Tucson, following financial activities at 20.0%, and government at 17.2% Figure 3 highlights the industry shares of GDP in Tucson and the U.S. by NAICS supersector for 2023.
Figure 3: Tucson MSA and U.S. Industry Shares of GDP in 2023
Another way to evaluate the relative importance of an industry in a region is using its location quotient (LQ). LQ isa measure of how important an industry is in a specific area compared to the national average. An LQ greater than 1 means the region has a larger share of jobs than the national average. An LQ less than 1 means the region has a smaller share of jobs compared to the national average.
Figure 4 illustrates that the manufacturing industry makes up a large share of the employment mix in Pinal, Pima, and Gila Counties. The manufacturing LQ in Pinal County (1.1) is higher than the state average, showing that the area has a relatively strong concentration in manufacturing. Similarly, the manufacturing LQs in Pima and Gila Counties surpass that of Maricopa County, suggesting a higher concentration of manufacturing operations in these two counties. The differences highlight how the role of manufacturing varies across counties. It is important to note that the industry shares used to compute the LQs in the graph do not include military employment.
Figure 4: Concentration of Manufacturing Employment by County (Q2 2024)
As of December 2024, Arizona has added 5,400 new manufacturing jobs since the beginning of 2015 (Figure 5). That was a 22.8% increase in manufacturing employment in just under nine years. Nationally, manufacturing employment increased by only 4.0% during this same period.
Figure 5: Manufacturing Jobs in the Tucson MSA (Seasonally Adjusted, in Thousands)
From 2016 to 2023, Tucson's manufacturing industry was in a vulnerable state compared to the nation. The economic recession caused by the COVID pandemic led to a sharp decline of 7.0% in Tucson’s manufacturing employment between 2019 and 2020. The pandemic also severely affected manufacturing employment across the United States. From 2020 to 2021, Tucson and the U.S. saw strong recoveries following the pandemic's initial impact, with the U.S. experiencing a larger rebound (+6.6%) compared to Tucson's +3.4%. In 2023, Tucson's manufacturing employment grew by 0.2%, while the nation's declined by 2.7%.
In 2023, manufacturing contributed to a significant portion of Tucson’s GDP due to the relatively high wage in that sector compared to others. Figure 6 illustrates the wages per worker across different NAICS supersectors for Tucson and the U.S.in 2023.
The data reveals that Tucson's overall wages per worker were $15,164 lower than the national average, marking a 20.9% gap. Out of the 11 NAICS supersectors, manufacturing had the highest wages per worker at $106,129, which was $23,554 more than the national average, translating to a 28.5% difference. It's also worth noting that in 2023, manufacturing and natural resources and mining were the only two supersectors in Tucson with wages exceeding the national average.
Figure 6: Tucson MSA and U.S. Wages Per Worker in 2023
Manufacturing encompasses a wide range of activities across various sub-industries. Which specific sectors contributed the most employment opportunities in Tucson? Figure 7 breaks down manufacturing jobs and wages for workers in Tucson by the largest three-digit NAICS sectors.
The data show that Transportation Equipment Manufacturing (NAICS 336) was the leading employer in 2023, with 13,358 jobs, which includes positions in aerospace and much of the local defense manufacturing, followed by computer and electronic products (3,207 jobs), fabricated metals (2,763 jobs), machinery (1,555 jobs), and miscellaneous manufacturing (1,380 jobs).
As illustrated in Figure 7, the three highest paying sectors in 2023 were transportation equipment; computer and electronic products; and machinery.
Figure 7: Tucson MSA Manufacturing Jobs and Wages Per Worker in 2023
The Future Is Now for Manufacturing Growth?
Manufacturing plays a large role in Arizona's economy, job creation, and technological advancement.
State manufacturing activity and jobs are expected to grow during the next few years. A major driver of that growth is new investments in semiconductor production (TSMC and Intel) in Arizona, accompanied by the co-location of some parts of the associated supply chain.
In Tucson, a notable development in the manufacturing sector is the American Battery Factory (ABF), which has commenced the construction of a two-million-square-foot gigafactory. This project is expected to create 1,000 jobs, generate $1.2 billion in capital investment, and strengthen the state's clean energy economy. The first phase of the facility is expected to be completed by 2025.
