Tucson Economy Improves But Slowly – March 23, 2016
George Hammond is director and research professor in the Economic and Business Research Center at the Eller College of Management, University of Arizona. In a recent article for the Arizona Daily Star on March 22, 2016, he wrote that the local economy of Tucson is improving but some things just continue to be slow in recovery. The MAP (Making Action Possible) Dashboard website at the University of Arizona Business Research Center shows that the metro Tucson area only added 2,900 jobs on average between 2014 and the end of 2015. This fell way below the national average of 2.1% compared to Tucson’s 0.8% and the state rate of 2.6%. Most of the job gains in Tucson were service providing sectors like education, health services, leisure and hospitality and business services like call centers.
Declines in federal spending began with the budget cuts and sequestering of 2013. According to the article these cuts mattered more to Tucson because of our local focus in government activity being a large share of Tucson’s economy. State and local government are a large part of the Tucson economy with federal government accounting for 7.8% of local production. Median home prices increased by four percent in 2015. Permit activity remains slow. The MAP Dashboard shows that the Tucson metro area added only 2,209 residents last year for 0.2% growth. The national average was 0.7% and the state rate was at 1.4%.
Mr. Hammond predicts moderate growth for 2016 but warns that the value of the dollar compared to the Mexican peso exchange may affect Arizona’s exports and Mexican visitor spending in Arizona.