State's Hot Economic Performance to Continue in 2001, Say 'Blue Chip' Forecasters

PHOENIX-As is expected across the nation, Arizona’s economy will slow somewhat over next year, compared with its robust performance during the past two years. However, the state should continue to be a national leader in job growth next year, second only to Nevada, according to Arizona State University’s annual economic forecast for 2001.

The report, which was released Wednesday by Dr. Lee McPheters, associate dean of ASU’s College of Business, is a compilation of forecasts for Arizona and the Western states by 70 analysts who track economic performance for ASU economic publications.

The forecasters predict that while a drop in all key growth indicators is likely next year, the state’s overall economic performance “will stack up very favorably when compared to most states in the nation, especially on such measures as population and job growth.”

The Grand Canyon State enjoyed incredible growth in job creation–5% since 1993–and ranked among the top five states for job growth for 92 consecutive months–a feat unparalleled by any other state in the nation. Although the new year is likely to see the lowest level of new jobs created in nearly a decade, the consensus prediction calls for 71,800 more jobs being added to the economy. This represents a 3.2% increase, down from the average 5% in previous years.

The greatest growth will be in service jobs, which are expected to increase by more than 5%. Last year 40,000 new service jobs came on-line. The lowest growth is predicted in the construction and manufacturing sectors, which should be about 2% next year. Even so, the experts point out that the state’s construction employment is at an all time high, providing 160,000 jobs–twice the number there was when the boom began in 1993.

Arizona personal income was up 7% for 1999 and a similar increase is anticipated for year 2000. The 2001 forecast, however, calls for a slight dip in personal income to 6.4% due to slightly slower growth in jobs, which is expected to impact the influx of new residents. Arizona’s population, which has grown by an estimated 2.8% for the past two years, is expected to increase by 2.7% next year, or 135,000 people–about the same number gained this year.

Using the key measures of population gains and new job creation, forecasters count the western states of Nevada, Arizona, California, Montana, Idaho, Colorado Texas and Utah, respectively, among the top 10 in job growth in 2001. They conclude that these top job producers will “continue to rank among the leading economic growth states for the year 2001,” setting the pace for the US economy.