The Continuing Importance of Manufacturing in Tucson, Arizona MSA

Manufacturing remains a cornerstone of the Tucson Metropolitan Statistical Area (MSA), supporting high-paying jobs and a strong local economy. In 2024, workers in Tucson’s manufacturing sector earned an average of $109,428, significantly higher than the national average of $85,461, reflecting the sector’s economic importance locally. Transportation equipment, computer and electronic products, and machinery were among the region’s largest and highest-paying manufacturing sectors.

October is National Manufacturing Month, with the first Friday celebrated as Manufacturing Day, an observance led by the Manufacturing Institute and the National Association of Manufacturers (NAM) to promote the industry and highlight workforce opportunities.

In 2024, manufacturing accounted for 28,800 jobs, or 7.1%, of total employment in the Tucson MSA. That positioned manufacturing as the sixth-largest NAICS (North American Industry Classification System) supersector, which federal agencies use to categorize business establishments for economic data. It ranks behind government (19.5%); private education and health services (17.5%); trade, transportation, and utilities (17.3%); leisure and hospitality (11.0%); and professional and business services (10.8%) (see Figure 1).

Tucson’s share of manufacturing jobs was 7.1% in 2024. That was higher than the state’s rate of 6.0%, but lower than the national rate at 8.0%. (see Figure 2). The employment distribution by industry in the Tucson MSA closely mirrored that of the United States in 2024, with notable exceptions in government jobs and those employed in professional and business services. 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 2024

One way to gauge an industry’s importance in a region is by examining its location quotient (LQ). The LQ compares the industry’s share of local employment with its share at the national level. An LQ greater than 1 indicates that the industry is more concentrated locally than nationally, while an LQ less than 1 shows suggests a smaller presence.

Figure 3 illustrates that manufacturing accounts for a significant share of employment in Pinal, Pima, and Gila counties. Pinal County’s manufacturing LQ is 1.0, indicating its share of manufacturing jobs matches the national average. In contrast, Pima and Gila counties have higher LQs than Maricopa County, reflecting a greater concentration of manufacturing activity. These differences underscore 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. Data for some counties are not disclosed due to BLS and state confidentiality rules, presuming that the LQ is minimal and significantly biased towards a single industry.

Figure 3: Concentration of Manufacturing Employment by County (Q1 2025)

As of August 2025, Tucson MSA has added 4,200 new manufacturing jobs since the beginning of 2015 (Figure 4), representing a 17.8% increase in just under ten years. However, despite this overall growth, manufacturing employment in Tucson has declined in recent months. Nationally, manufacturing employment increased by only 3.7% over the same period.

Figure 4: Manufacturing Jobs in the Tucson MSA (Seasonally Adjusted, in Thousands)

In 2024, manufacturing was the highest-paying sector in Tucson, highlighting its significance in the local economy. Figure 5 illustrates average wages per worker across different NAICS supersectors for Tucson and the U.S. in 2024.

The data show that Tucson’s overall wages per worker were $15,943 lower than the national average, a 21.0% gap. Among the 11 NAICS supersectors, manufacturing recorded the highest wages per worker at $109,428, which was $23,967 above the national average, a 28.0% difference. Notably, in 2024, manufacturing and natural resources and mining were the only two supersectors in Tucson with wages exceeding the national average.

Figure 5: Tucson MSA and U.S. Average Wages Per Worker in 2024

In 2024, Arizona’s manufacturing sector played a major role in the state’s economy and global trade. Manufacturers exported $27.8 billion in goods, marking a 30.7% increase since 2019 and accounting for 86.2% of the state’s total exports. The sector also contributed $46.1 billion to Arizona’s Gross State Product, representing 8.4% of the state's total economic output, underscoring the significance of manufacturing as both an engine of growth and a driver of trade competitiveness.

While these statewide figures highlight the scale and economic significance of Arizona’s manufacturing sector, examining the Tucson MSA shows how this broader growth translates locally. Manufacturing spans many sub-industries, but which sectors account for the largest share of employment in Tucson? Figure 6 breaks this down, highlighting jobs and wages across the region’s largest three-digit NAICS manufacturing sectors.

The data show that transportation equipment manufacturing (NAICS 336) was the leading employer in 2024, with 13,573 jobs, which includes positions in aerospace and much of the local defense manufacturing, followed by computer and electronic products (3,168 jobs), fabricated metals (2,834 jobs), machinery (1,613 jobs), and miscellaneous manufacturing (1,381 jobs).

As illustrated in Figure 6, the three highest-paying sectors in 2024 were transportation equipment; computer and electronic products; and machinery.

Figure 6: Tucson MSA Manufacturing Jobs and Annual Average Wages Per Worker in 2024

Arizona Manufacturing: Growing Through Change

Arizona’s manufacturing sector is experiencing both growth and change. American Battery Factory (ABF), a U.S.-based manufacturer of LPF battery cells, is partnering with KAN Battery to refine production in China, aiming to accelerate the Tucson facility, now expected to be completed in late 2026. ABF projects that each of its factories will create between 300 and 1,000 jobs.

Meanwhile, TSMC’s Arizona operations are expanding, including a second N3 fab in Phoenix (2028) and a third N2/A16 fab planned for completion by the end of the decade, thereby strengthening the state’s role in semiconductor manufacturing. At the same time, Intel is restructuring its Chandler operations, cutting roughly 800 jobs locally as part of broader global layoffs, reflecting industry adjustments even as Arizona remains a key manufacturing hub.