Arizona is a dynamic state, with a robust labor market, all the signs that this state may be recession proof.
Lexi Porterfield is a skilled trades coordinator, academic advisor, and recruiter at Central Arizona College– she goes to careers fairs to recruit students for the skilled trades programs at CAC.
She also helps companies that contact her when they have job openings– Porterfield sets up times for the companies to present at CAC, bridging the gap between companies and students in an economy where workers are desperately needed.
“The wonderful thing about us here at CAC, we offered free tuition during that time. So they didn’t even have to worry about paying for school. They just needed to get there, learn so they could get back out and do something to make money for themselves,” said Porterfield.
During the pandemic, the unemployment rate in Arizona reached 13.8 %, the highest for Arizona that year. When the economy started to reopen, the unemployment rate started trending downwards, now at 3.5%, which is also the national average.
Arizona’s labor market is tight and has exceeded the United States during the pandemic years. During the 2020 recession, Arizona lost fewer jobs than all but ten other states and gained them faster than any other state except for four. In addition, during the pandemic, the population growth was at 7,179,943 residents and has increased to 7,359,197 in 2022. The state’s GDP in 2020 was 382,072.3 bn and reached 458,949.8 bn in 2022.
Additionally, job growth was 2.2 % in March, with 1,900 jobs added in manufacturing. But over the past year, most job growth has been in job sectors such as manufacturing, construction, financial activities, skilled trades, utilities, and transportation. Most jobs lost in the pandemic’s early days have been replaced with workers.
The state has also been resilient to the interest rate hikes the Federal Reserve has continued to enact since March of 2020– to fight stubborn inflation, increase overall unemployment and fight wage growth.
According to the data from the Bureau of Labor and Statistics and Arizona Office of Economic Opportunity, Arizona may be recession-proof, as the unemployment rates have been plunging since April 2020.
“Overall, the State’s labor market is dynamic, that means that firms are struggling to hire, and they’re raising wages to bid for the workers that are out there,” said George W Hammonds, a research professor at The University of Arizona.
Since there is an abundance of jobs, to connect the employer to students further, Porterfield developed an event on campus called Welding demo day– where high school students in the area connect with industry partners– these businesses show what they do or even offer job positions to students looking for jobs.
Her colleague, Andrew Clegg, works with companies to identify training programs for their future or current employees and places them in business, manufacturing, nursing, and healthcare programs.
“I work with those companies to try to match what we currently offer, or look at building new programs or modifying the programs that we have to get their new or potential employees trained,” said Clegg, the Director of Career and Workforce.
Both Porterfield and Clegg said that there are so many job openings in sectors like skilled trades and manufacturing because there are not enough skilled workers for those specific jobs.
Clegg said many employers have announced they are locating in Pinal county but have yet to start hiring because they are either under construction or have yet to start construction. But, new employers have not had an issue and have been able to find new workers.
Clegg said that people looking to make a career in manufacturing may have had other careers not in manufacturing. Therefore, the career changer will need training for their new career.
“Lucid motors, they need so many people that their bringing them in that don’t have skill in manufacturing or electric vehicle manufacturing,” said Clegg.
Companies such as Lucid Motors, Intel, Proctor and Gamble, Kohler, LG Electronics, and Taiwan Semiconductor Manufacturing Company are expanding in Arizona because it has a business-friendly atmosphere, low taxes, and is close to California.
Additionally, there are many supply chains; the State is close to the ocean and has a rail system that runs throughout the State.
Clegg said that Arizona has few natural disasters and reliable electrical supply and utilities.
Manufacturing companies have also been expanding in Arizona because of the 52.7 billion in loans and grants from the CHIPS ACT, created to reduce the dependence on chips imported from abroad and create more American jobs.
After the CHIPS ACT was signed into law by President Biden. Manufacturing companies expanding in Arizona use other job sectors, like construction, to help build their factories – this may be why construction was a sector that saw growth because manufacturing companies are helping create jobs in other sectors which may be why the unemployment rate is low.
But economists predict the unemployment rates may change soon.
“I expect it’ll kind of come down to how the national economy is doing,” said Evan J. Taylor, an assistant professor of economics at The University of Arizona.
Taylor said it would follow the nation because the Fed has been raising interest rates five points over the last 18 months, and the Federal Reserve rates take a while to affect the economy.
“I expect the unemployment rate to gradually trend up. It will trend up for a couple of reasons. National growth is likely to slow as we go through the next year and that will affect Arizona’s growth, labor demand is likely to soften and that will contribute to a gradual increase in the State’s unemployment rate from where it is now,” said Hammond.