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Where the Jobs Are: Phoenix
2012-02-01
by Mary Anne Thompson
Hard hit by the recessed economy, Arizona’s capital city struggles to rise again
Phoenix, the capital city of Arizona, will rise again, experts say, despite the city’s placement at the epicenter of the national recession. Arizona felt the effects of the tumbling economy a few months earlier than the rest of the country, thanks to its heavy reliance on the booming real estate industry. The housing debacle had a rippling effect on Arizona’s other industries, and has eventually affected Phoenix’s overall economy.
Although Phoenix’s economic recovery will be painfully slow, net job growth is expected to climb by 2 percent this year. The Mountain Monitor, a publication of the Brookings Metropolitan Policy Program that tracks indicators of economic recovery in the country’s western states, recently found Phoenix showed the most progress in terms of job recovery. This is thanks in large part to the city’s broad range of industries; at least a dozen individual industries drive the $181 billion Greater Phoenix economy.
Although employment in some sectors has declined in the past year, and the local unemployment rate is up to 8.7 percent, other sectors are showing some growth. The manufacturing and finance industries saw modest increases this year, while the tourism industry saw an impressive 3 percent growth in employment, and health care experienced a 6 percent increase.
Industries
If there is one generalization that can be made about Phoenix’s economy, it is that most people here have white-collar jobs. Of the 1.7 million workers in Greater Phoenix, roughly one-third have management or professional jobs (nearly 600,000 people). Another third have sales and office occupations (509,000 people).
Seven Fortune 500 companies are headquartered in Arizona, and all of them are in or around Phoenix. These include Avnet (electronics wholesaler), Freeport-McMoRan Copper & Gold (crude-oil producer), Insight Enterprises (electronics wholesaler), PetSmart (pet products retailer), US Airways Group (commercial airline), Republic Services (waste management) and Apollo Group (education provider).
Construction
Phoenix’s population more than doubled from 1990 to 2005, and all of these newcomers needed places to live, work, shop and play. Phoenix construction companies scrambled to keep up, juggling as many projects as they could find workers to build. By mid-2006, 185,600 locals, almost 10 percent of the Phoenix workforce, were directly employed by construction companies.
Over the next three years, half of these workers lost their jobs as the local housing market ground to a halt. Construction employment in Phoenix dropped by more than 80 percent over the last three years, and it continues to fall, although not as drastically, according to the Bureau of Labor Statistics. Over the last 12 months, 3 percent of Phoenix’s construction jobs disappeared.
However, things may be looking up for Phoenix’s beleaguered construction industry. The growing field of renewable energy production is creating a need for new manufacturing facilities and local construction and design companies are stepping up to the plate. Phoenix-based SmithGroup Inc. has already fashioned a production facility for energy company Power-One and plans to build a facility nearby for Gestamp Solar Steel.
Financial
Eight percent of the local workforce holds a financial job. American Express operates its financial transactions, website and customer information center in Phoenix. Bank of America, Chase Bank, Discover Card Services, USAA and Wells Fargo Bank also have major offices or headquarters in the area.
The local financial industry has stumbled in the wake of the nation’s banking shakedown. There are 11,000 fewer financial workers in the Phoenix metro area today than there were three years ago. This year, the financial industry lost 500 jobs in just one month – one of the few sectors in the area to still be losing jobs. However, things may be looking up. Employment in this sector has actually grown by nearly half a percent from this time last year. Robert Half International’s Financial Hiring Index reports that a net 14 percent of area chief financial officers (CFOs) plan to increase their finance and accounting departments.
Health Care
The health care industry in Phoenix has grown in proportion to its retirement communities. Many people like to grow old in sunny Phoenix, and as they age, they require more trips to the doctor. Geriatrics is not, however, the only health care specialty in the area. Many of the state’s hospitals are located in the Phoenix metropolitan area, including a Mayo Clinic research hospital in Scottsdale that employs 4,000 locals and serves 90,000 patients each year. Banner Good Samaritan Medical Center in downtown Phoenix cares for more than 43,000 patients annually, employing 4,200 Arizonians, including 1,700 physicians.
Medical science is also becoming an important Phoenix industry. Cutting edge medical research centers like the Translational Genomics Research Institute (TGen) and the Biodesign Institute at Arizona State are drawing more health care technology companies to Phoenix. Occupations predicted to have the most job openings in the state between 2006 and 2016 include physicians and surgeons, medical and health services managers, and medical laboratory technologists, according to the Arizona Department of Economic Security–Research Administration.
Manufacturing
Manufacturing employs 111,000 people in greater Phoenix. Aerospace manufacturing is especially prevalent here. Boeing Company employs 4,000 people in the Phoenix area, mainly in its Boeing Helicopter Company division where Boeing manufactures the Apache Longbow attack helicopters. Honeywell Aerospace employs 3,300 people in Greater Phoenix; its local operations include aircraft manufacturing for commercial, business, defense and space use.
Some predict the ending of NASA’s space shuttle program will benefit the area’s aerospace manufacturing industry. Virginia-based Orbital Science Corp., a maker of satellites and space launch vehicles, is expanding its facility in nearby Chandler. Last year it received a $70 million contract from NASA to create an observatory that will measure carbon dioxide levels in the atmosphere. And, C4 Systems, a Scottsdale-based company owned by General Dynamics that employs 7,000 locals, received a $642 million contract to modernize NASA’s ground network for tracking satellites.
If they don’t build aircraft, Phoenix manufacturing plants probably make computer parts. Intel, for example, employs 10,000 people at its two manufacturing and research complexes in the Phoenix area. Intel makes many of its computer chips in Chandler, a suburb in the East Valley.
Tourism
Of course, Phoenix’s warm weather has always drawn its share of tourists. Almost 14 million people visit Phoenix every year. Some of them come to play golf at one of 200 area courses. Many of them come to watch sporting events like Major League Baseball’s spring training or NCAA Football’s Fiesta Bowl. They stay at one of the 230 hotels, inns and resorts in Greater Phoenix. All combined, tourism generates 184,000 jobs in the metro area.
Phoenix’s tourism industry suffered during the recession. Leisure and hospitality companies in the Phoenix-Mesa-Scottsdale metro dropped 7 percent of their workforce over the past several years. This year, however, things look brighter. Employment is up 3 percent over last year, and Smith Travel Research is predicting Phoenix hoteliers will see a 10 percent increase in revenue per available room compared to last year.
Conclusion
The Phoenix economy is stronger than it looks. Yes, the local unemployment rate of 8.7 percent has more than doubled since the recession began, but it is still lower than the national rate (9.1 percent). The population is growing and the weather is inviting. Certain industries, like tourism and health care are already expanding, and the prevailing belief is as soon as Arizona’s real estate market stabilizes, Phoenix will be ready to rise again.
Mary Anne Thompson is the Founder and President of Going Global, Inc. (www.goinglobal.com), a subscription database service that contains career and employment information for more than 80 locations. More than one million users enjoy Going Global’s unique content, which is researched in-country by local career experts and updated annually. Mary Anne is also an author, lecturer and frequent guest on various media outlets, including NBC and CNN International. Previously, Mary Anne served as an attorney and advisor to President Ronald Reagan in the White House.
http://goinglobal.com/
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