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Job growth in Tucson remains sluggish

Metro Tucson in June had 1,900 more people employed than a year earlier, and most of those new jobs were at restaurants and bars.

But 0.5 percent job growth still kept it at the bottom of Arizona’s major metro areas, where it has been for months, the Arizona Office of Economic Opportunity reported Thursday.

Tucson’s unemployment rate, which measures the percentage of workers looking for jobs, rose to 4.9 percent in June from 4.6 percent in May. Arizona’s overall rate remained unchanged at 5.1 percent. Both are higher than the U.S. rate of 4.4 percent.

Doug Walls, research administrator at the economic opportunity office, said Arizona’s job market overall is healthy. Workers feel more comfortable about changing jobs. Consumers are eating out more. Typical summertime seasonal losses at schools, hotels and other employers came in less than their averages for the past decade.

Hourly wages at non-governmental jobs rose 4.4 percent this year in Arizona, compared to 2.4 percent in the nation. Arizona on Jan. 1 increased its minimum wage to $10 from $8.05.

Arizona overall added 62,700 jobs from June 2016 to last month.

“People are coming back into the labor force. New individuals are coming into the labor force. They are feeling more confident about their opportunities,” Walls said 

Some sectors in Tucson are doing well

University of Arizona economist George Hammond calculates three-month averages, and his latest calculations also show Tucson to be barely adding jobs. While Tucson added 1,700 jobs over the first quarter of 2017, it only added 700 in the second quarter, for a minuscule 0.2 percent growth rate (from the second quarter of 2016 to the second quarter of 2017), he said.

Arizona had 2 percent job growth statewide in the second quarter, and the national rate was 1.5 percent, according to Hammond.

The Arizona Office of Economic Opportunity’s June report showed that Tucson’s strongest growth was in the leisure and hospitality sector (especially restaurants and bars), which added 2,400 jobs over the year, for a 5.5 percent growth.

This is consistent with a nationwide trend underway since 2010, Walls said.

“We are seeing more and more people spending more on food services and drinking places outside of the home than they are on traditional grocery stores or food products that you might cook in the house,” he said.

That means fewer jobs at grocery stores. Jobs at Tucson area food and beverage stores fell by 300 in June from a year earlier, a drop of 3.2 percent.

The second strongest job growth in Tucson was in business support services, which includes call centers, according to the state report. Tucson added 900 jobs there from June 2016 to June 2017 — a 9.5 percent increase. C3/CustomerContactChannels announced plans in early July to hire 2,400 this year at its three local call centers.  It has 1,565 employees in Tucson.

Aerospace product and parts manufacturers added 700 workers over the year, for a 6 percent gain. Southern Arizona’s largest employer is Raytheon Missile Systems in Tucson, which has 10,000-11,000 employees here, according to the company.

And financial activities, a sector that includes real estate, lending and insurance, added 600 employees over the year, for a 3.5 percent growth. Health care grew by more workers, 700, but its rate was just 1.5 percent  because the sector is so large.

Job growth in other sectors, including mining, government, and construction, remained flat or grew by less than 1 percent 

The rest of Arizona is doing better. Arizona added 62,700 jobs (2.4 percent) over the year and 58,000 of those were in Maricopa County.

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Job growth in the metro areas was: Phoenix, 3 percent; Prescott, 2.1; Lake Havasu-Kingman, 1.7; Sierra Vista-Douglas, 1.5, Flagstaff, 0.9; and Tucson, 0.5.

Hammond said “I think it boils down to Phoenix being a bigger, more diversified economy. Tucson is very concentrated in government activity, which has not been growing rapidly.”

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Other Tucson economic highlights

Tucson's residential real estate market has improved this year, though it has become more of a seller’s market.  These numbers are for June and come from the Multiple Listing Service of Southern Arizona and Tucson Association of Realtors.

  • The median sales price for a single-family home rose 5.26 percent to $200,000 in June, compared with $190,000 in June 2016. The median grew $5,000 from May to June (2017).
  • Through June, 8,660 homes have sold in metro Tucson, an increase of 6 percent from the first half of 2016.
  • Homes this year sold after an average 46 days on the market in the first half of 2017. That compares with 58 in the first six months of 2016.
  • There were 3,625 active listings in June, compared with 4,175 a year earlier, a decline of 13 percent. Fewer homes for sale helps increase prices. Almost a third of homes listed for sale are in northwest Pima County
  • While the largest number of homes listed for sale are in the $200,000 to $399,000 price range, about a fifth of the homes sold for $100,000 to $159,000. Nine homes sold in June for more than $1 million.
  • Average monthly rents in June were: apartments, $498; condominiums, $836; single family homes, $1,389; townhomes, $1,076
  • Of the 320 units rented in June, 83 were in central and downtown Tucson, followed by 71 in the northwest region.