UA economists: Tucson economy, job growth to accelerate

Tucson’s economy is gaining steam, with faster growth predicted for the next two years, University of Arizona economists said Friday.

The metro area’s job growth is expected to be in the 2 percent range in 2017 and 2018, after posting an anemic 0.6 percent growth in 2015 and an expected 1.4 percent increase this year, George Hammond, director of the UA’s Economic and Business Research Center said at the Eller College of Management’s annual economic forecast luncheon at Westin La Paloma Resort.

Hammond said manufacturing jobs are expected to increase, reflecting the announcement of 2,000 new jobs coming at Raytheon Missile Systems over five years, and additions by companies including rocket-launch startup Vector Space Systems.

But he said most new jobs during the next three years are expected to be in education and health services; leisure and hospitality; professional and business services; and trade, transportation, and utilities.

The forecast calls for modest job losses in natural resources and mining, reflecting low copper prices.

The projected growth rates are up from last year’s forecast and translate into 5,300 net new jobs this year, 7,100 in 2017, and 7,600 in 2018.

If Tucson’s job growth hits the forecast in 2016, that would be the fastest pace since 2012, while the forecast growth rates in 2017 and 2018 would be the fastest pace since 2006, before the Great Recession, Hammond said.

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The UA economists upped their outlook for 2016 job growth earlier this year, from to 1.4 percent from 1 percent at last year's forecast. 

“It looks to be a better year for job growth,” Hammond said, based on data through October.

He noted that Tucson’s over-the-year job growth through the first 10 months of the year accelerated to 0.9 percent in 2016, from just 0.5 percent in 2015.

Sectors adding the most jobs in the third quarter were education and health services; manufacturing; government; and trade, transportation and utilities. Employment increases in manufacturing in part reflected growth in the aerospace sector.

More than 500 people packed a ballroom at La Paloma to hear presenters Hammond and Anthony Chan, chief economist for banking giant Chase, share their predictions regarding job growth, the housing sector, the stock market, interest rates and more.

Chan spoke about the global economy and financial markets, predicting that the U.S. economic and equity market outlook will remain bullish for 2017.