N O V E M B E R

1 9 9 6

ARIZONA’S
ECONOMY
AT MID-YEAR:
THE GOOD TIMES
KEEP ROLLING ON
Marshall J. Vest
Forecasting Project Director
September 24, 1996

T

he Arizona economy remained
solid as it headed into the
second half of 1996. Consumers
are confident, housing is surprisingly
resilient, jobs are plentiful and wages
are increasing. However, several
“late-cycle” phenomena are now
present. Labor markets are very
tight, companies are beginning to
hoard labor, consumer loan problems
are surging, prices are rising at a
faster pace, and the prospects of
higher interest rates has grown more
probable. Recession is unlikely, but
much slower growth is expected.
Because the Metro Phoenix economy
continues to perform at a high level,
we’ve revised our Arizona and
Phoenix area forecasts upward for
1996. The pace is unsustainable,
however, and we continue to expect
a slower economy in the second
half of this year – and significantly
slower in 1997.
This is the phase of the business cycle
in which the economy gradually slows
down. Sectors that were hard hit in the last
recession (such as construction) have fully
recovered their losses and are setting new
record highs. Consumers have satisfied
their pent up demand – and in the process,

F A L L

acquired piles of debt that now need to be
reduced. Labor shortages in certain occupations are limiting additional expansion. So,
with the rapid-growth juvenile stage of the
expansion long since past, the pace of
expansion is now constrained by shortages
and by government policies designed to
keep the economy from overheating.
These are the good times! Jobs are
plentiful, credit available, the environment
more predictable. The economy now makes
smaller adjustments to keep supply and
demand in balance. In one quarter, we see
a little faster growth; in the next, growth
slows as inventories are adjusted.
The US economy nearly stopped growing
in 1995. In Arizona’s high-flying economy,
the trajectory flattened. Growth then resumed
in the first half of this year, boosted by lower
interest rates, higher investment spending,
and a restocking of inventories. The second
half should bring a reversal once again – to
slower growth. These short-term adjustments
are happening within the context of a gradual
slowdown. It remains to be seen whether the
economy will attain a long-run equilibrium,
or will be plunged into recession by some
(unpredictable) shock factor or policy miscalculation. For economists and those who
try to forecast economic conditions, the
period ahead promises to be pretty boring,
but for workers and business owners, this
is a nice environment.

I S S U E

RECENT EVIDENCE & OUTLOOK
Arizona continues to rank among the
fastest growing states in the nation and its
economy remains healthy at mid-year. The
pace is still too fast to sustain and we expect
much slower growth to prevail next year.
Highlights of where we are and where we’re
going follow (see forecast table on page 8).
Arizona’s wage & salary (or nonag)
job growth, after registering year-over-year
increases of 3.8% in both 95q4 and 96q1,
improved in the second quarter to 4.2%.
That pace continued into the third quarter
with gains of 4.4% in July and 4.7% in August.
Roughly 83,000 jobs have been created
during the past year.
With comparable figures for all states
through June, Arizona was the fourth-fastest
employment generator. Nevada, Utah, and
Idaho were the top three states.
Employment should grow at a 3.5 - 4.5%
rate during the remainder of this year, then
recede to near three percent by the end of
1997. Help wanted advertising in Metro
Phoenix remains at a high level, although
not as high as last year (Exhibit 1). Since
peaking in December at 112.5, the index
fell to 92.0 in July. Even so, it is nearly ten
points higher than the nation-wide index.
As the demand for labor weakens next year,
employment growth will average 3.3% and
only 2.4% the following year.

I N S I D E

ANNOUNCING THE 1997/98
OUTLOOK LUNCHEON ...........6
FORECAST TABLES ................7
EMPLOYEE TRAINING
IN ARIZONA ......................8
ARIZONA ECONOMIC
INDICATORS ......................12

EL L E R G RA DU A T E S CH O OL OF M AN A GE M EN T • C OL L EG E O F B U S IN E SS A ND P U B LI C AD M IN I S TR AT IO N
THE U NIVERSITY OF ARIZONA

T UCSON, ARIZONA

EXHIBIT 1
Index of Help Wanted Ads Drift Lower

Manpower Inc.’s quarterly Employment Outlook Survey, which measures
employers’ intentions to increase or decrease
the permanent workforce, also remains
positive in their current survey. Statewide,
33% of employers expect to increase their
workforce in the fourth quarter, while only
five percent plan to decrease staffing.
Employment is growing most rapidly
in services (a 5.3% gain for the 12-month
period ending in July), construction
(5.2%), trade (5.0%) and government
(5.0%). Manufacturing jobs have grown
a modest 2.4%.
Back in 1994, when Arizona’s job base
exploded by 6.7%, manufacturing jobs
increased 7.7% and construction by 21.6%.
These two industries, which are the most
volatile over the business cycle and propel
the economy during boom periods, are now
growing modestly.
Manufacturing jobs will receive a
boost as a number of new semiconductor
“fab” plants open in the Phoenix area during
the next few years, but our forecast shows
manufacturing growth remaining in the one
to four percent range.
It’s still a bit early to call with certainty
(since the data will be revised next February),
but construction jobs may have peaked.
Residential building permits have
moved lower in recent months – to a still
high 55,000 unit annual rate; but that’s down
PAGE TWO

EXHIBIT 2
Arizona Construction Awards Near Peak?

from 60,000 earlier this year. New impact
fees in the Metro Phoenix area may have
led to some stockpiling to avoid the new fees,
and that will depress permitting for several
months. January of this year may turn out
to be the peak for residential permits in this
business cycle. For the entire year, we are
forecasting a gain of less than five percent
in total residential permits compared to
last year. Next year should bring a decline
in the range of 15-20%. Both single family
and apartment permits will decline by
similar amounts.
Although absorption of residential units
in the Tucson area has improved markedly
from the abysmal level of last year’s fourth

IT REMAINS TO BE SEEN
WHETHER THE ECONOMY WILL
ATTAIN A LONG-RUN EQUILIBRIUM,
OR WILL BE PLUNGED
INTO RECESSION BY SOME
(UNPREDICTABLE) SHOCK FACTOR
OR POLICY MISCALCULATION.

quarter, supply and demand are still significantly out of balance. From a level of less
than 3,500 units at an annual rate, absorption
has improved to nearly 6,000 units. However,
more than 8,000 new units have been
brought to market during the past year,
driving vacancy rates upward. Apartment
vacancies are now a seasonally-adjusted
9.5%, up from 6.0% one year ago. These
data are from the Drachman Institute and
the Office of Economic Development at
The University of Arizona. In Metro Phoenix,
absorption of apartment units during the past
year has tapered off to only a few hundred
units. Even so, apartment vacancies remain
under four percent.
Housing affordability in Phoenix and
Tucson continues to rank below national
averages. In the National Association of
Home Builder’s recent survey of some 181
cities, Tucson ranked 150th and Phoenix
92nd. Tucson’s index of 55.0 means that a
family earning the area’s median income
could afford to buy 55% of the homes sold.
In Phoenix, 68.6% of the homes are within
reach of the average income buyer. Although
the average price of homes sold is nearly
identical in the two areas (roughly $124,000),
incomes are much lower in the Tucson
area. During the past year, home prices
have increased in both areas by roughly five
percent. Nationwide, the average price of
homes sold, as reported by the National
A RI ZO NA'S EC O NO M Y

EXHIBIT 3
Unemployment Rate
in Arizona Equals U.S. Rate

Association of Realtors, is up six percent
during the past year to $145,400.
Residential construction is not the only
story, however. Commercial building activity,
as measured by FW Dodge Construction
Contract Awards, has strengthened
recently to $2.5 billion at an annual rate
(Exhibit 2). Office vacancies in both
Phoenix (10.4%) and Tucson (11.2%) are
below the nation-wide average (13.1%),
according to CB Commercial. New office
buildings are under construction in Metro
Phoenix for the first time this decade.
Several new hotel projects are underway
in both cities as well. And industrial space
is in short supply. Commercial construction
is out-of-sync with residential building in
this cycle and new commercial projects will
shore up the construction industry over the
remainder of this decade. Awards data are
not, as yet, reflecting a boom, but there is
great promise for the near future.
Both communication & public utilities
(CPU) and finance, insurance and real estate
(FIRE) will continue to be weak as they
adjust to deregulated environments. That
leaves services and trade to create the
lion’s share of the jobs in coming months.
Labor markets remain tight. Arizona’s
August unemployment rate was 5.4%,
three-tenths higher than the national rate
(Exhibit 3). Unemployment in Phoenix
and Tucson was even lower at 3.7% and
A R IZ ON A' S E CO N OMY

EXHIBIT 4
Consumer Price Inflation
in Metro Phoenix Surges

3.6%, respectively. During the past year,
Arizona’s labor force grew by 4.1% and the
number of unemployed declined by 10%.
Many businesses report that their major
challenge today is finding skilled workers.
In the electronic components and semiconductor industries, employers appear to
be hoarding workers.
Labor shortages have yet to affect wages
to a large degree, with the exception of wholesale trade, where average hourly earnings
are up 7.9% for the 12-month period ending
in July. Wages in retailing are up 4.0% and
construction wages are 3.1% higher. Both
mining and manufacturing have increased
less than two percent and utilities less than

COMMERCIAL CONSTRUCTION
IS OUT-OF-SYNC WITH
RESIDENTIAL BUILDING IN THIS CYCLE
AND NEW COMMERCIAL PROJECTS
WILL SHORE UP THE
CONSTRUCTION INDUSTRY OVER
THE REMAINDER OF THIS DECADE.

one percent. All but wholesale are lagging
behind inflation locally.
Arizona and Nevada led the nation in
personal income growth last year with a
9.4% gain. In per capita terms, Arizona’s
increase was a strong 5.7%, the largest in
a decade. Personal income growth slowed
in the first quarter to 8.1% on a year-overyear basis. Individual income tax
withholding, a good proxy for wage and
salary disburse-ments that comprises nearly
two-thirds of total personal income, remains
very robust, however. Recently, withholding
moved to a higher level, registering
increases near 15% for the 12-month period
ending in July. These two measures are
telling a very different story about how the
economy is doing. There have been no
recent changes in the tax law, so the upward
surge in withholdings remains a mystery.
During the past year, consumer prices
in the Phoenix metro area have increased
by 6.6%, more than double the nationwide
rate and the highest in 14 years (Exhibit 4).
Transportation costs are up a whopping
10.4%, reflecting higher gasoline prices.
Entertainment prices are up 7.8% followed
by other goods & services (5.6%). Housing
prices, which were running in excess of eight
percent last year have settled to a more
moderate 5.5%. Medical costs (4.2%),
food & beverage (4.1%) and apparel (2.1%)
are the other categories. Higher inflation in
PAGE THREE

EXHIBIT 5
Total Bankruptcies in Arizona
Stand at HIghest Level Since 1992

EXHIBIT 7
Alternative Scenarios –
Nonag Job Growth, Arizona

EXHIBIT 6
Retail Sales by Category, Arizona
($000s and percent change from a year ago)
Current Month: June 96
$000s

% chg
current
month

% chg
past 12
months

$158,343

26.0

11.1

General Merchandise Stores

233,635

-10.5

3.2

Food Stores (no food sales)

177,791

-9.9

4.4

Motor Vehicle Dealers

392,619

7.3

11.4

Misc. Automotive, Motorcycle
and Boat Stores

139,418

7.4

11.3

Apparel and Accessory Stores

135,208

-1.2

3.6

Furniture, Home Furnishings
and Equipment Stores

121,948

3.1

6.4

Miscellaneous Retail Stores

157,492

9.6

7.0

$2,315,561

4.4

7.5

Building Materials, Hardware, Garden
Supply and Mobile Home Dealers

Total Retail

Source: Arizona Department of Revenue and Economic and Business Research Program, The University of Arizona

Phoenix is to be expected, since it is among
the fastest-growing metro areas in the country.
However, inflation should moderate next
year as the transitory effects of gasoline
prices abate. Moreover, deregulation in the
communications, utilities and financial services industries should lead to lower prices
in those sectors and help moderate overall
inflation for years to come. We expect a
PAGE FOUR

return to the three to four percent range
for inflation next year.
Restaurant & bar sales received a
boost during the first quarter from several
sporting events including the Super Bowl,
the Fiesta Bowl where the national collegiate
champion was determined, Tucson’s Copper
Bowl, and professional golf tournaments in
both Phoenix and Tucson. First quarter sales

were up a strong 13.5% from the prior year.
Second quarter sales receded to a more
normal 7.2% gain. We expect a nine percent
increase for all of 1996, followed by a gain
of less than four percent next year.
Retail sales also received a boost in
January (up 14.5%), but sales for the entire
first quarter were a very modest 5.4%. The
pace quickened in the second quarter, reaching 7.7%. That’s about what we expect for
all of 1996. Next year, however, consumers
will tighten their belts considerably and a
gain of less than four percent is expected.
Autos are a major component here and
although new car sales remain high, they
are more likely to move lower rather than
higher in this environment.
Nationwide, lenders are beginning to
tighten consumer lending standards in
reaction to increasing credit risk, and this
will act as a brake on consumer spending.
Consumer debt is at high levels and delinquencies are increasing. According to the
American Bankers Association, consumer
loan delinquencies for eight types of closedend installment loans reached 2.32% in
June, up from 1.95% 12 months earlier and
the highest in three years. Delinquencies in
Arizona are well below the nationwide rate
at 1.43% in June. Even so, Bankruptcies
in Arizona have been rising at a brisk 25%
annual rate during the past year and are
quickly approaching levels last seen at the
ARIZONA'S ECONOMY

end of the 1990-91 recession (Exhibit 5).
It has apparently become fashionable for
people to file bankruptcy, even those who
have never missed a payment and have the
wherewithal to pay back their debt.
For their part, Arizona consumers remain
quite optimistic. The index of consumer
confidence measured by the Behavior
Research Center remained near its peak
for this business cycle. This measure has
had a narrow range for the past one and
a half years. Confidence in Phoenix is at
its cycle peak, while in Tucson, the index
has displayed unusual volatility from one
quarter to the next.
Arizona recorded the second largest
increase in population last year, according
to the U.S. Department of Commerce. Its
3.5% increase trailed only Nevada’s 5.0%
gain. Idaho was a distant third with a 2.7%
gain. As an indicator of population dynamics,
residential electric customer growth
in both the Tucson and Phoenix metro areas
has moved to the highest level seen during
this expansion. Some 48,000 new residential
customers have been added during the past
12 months. Population is the wild card in
the outlook. Continued high numbers of
new residents could pump energy into the
economy and keep growth high. New residents prop up retail sales, keep the housing
market moving forward and provide a
growing labor pool from which new job
openings are filled. We are forecasting a
3.0%, or 125,000, gain in population this
year, down from 3.4% and nearly 140,000
in 1995. Next year we project a 2.7% gain
or 117,500 persons.

RETAIL SALES BY CATEGORY
For the month of June, retail sales statewide increased 4.4% from June of last year
(Exhibit 6). Sales of building materials
(up 26.0%) and at miscellaneous retail
stores (up 9.6%) registered the strongest
increases. For the 12-month period that
ended in June, motor vehicle dealers, the
miscellaneous automotive group and building materials all recorded gains in excess
of eleven percent. Total retail sales for the
12-month period gained 7.5%.
These figures are provided by the Arizona
Department of Revenue (DOR). EBR’s
monthly survey of retail establishments,
conducted in partnership with First Interstate
Bank of Arizona, was recently discontinued.
As EBR’s survey data comes to an end,
ARIZONA'S ECONOMY

analysts will be pleased to know that they
can still gain valuable insights into spending
trends using the DOR data. Technically, EBR’s
survey and Department of Revenue figures
measure behavior of different groups, and
are therefore not comparable. As a result,
EBR’s estimates should not be updated with
the DOR data. Fortunately, DOR has been
tabulating these data since mid-1987 and
we have added these to our database. Also,
data are available for all counties as well as
state-wide aggregates.

METRO AREA UPDATE
AND PROSPECTS
The sun continued to shine on the PhoenixMesa Metro Area’s economy during the
second quarter. Nonag jobs accelerated
from the first quarter’s 4.5% gain (compared
to the year earlier) to 5.0% in the second.
The trend continued into the third quarter
with July’s 5.3% gain. In the most recent

NATIONWIDE,
LENDERS ARE BEGINNING
TO TIGHTEN CONSUMER
LENDING STANDARDS
IN REACTION TO
INCREASING
CREDIT RISK,
AND THIS WILL ACT
AS A BRAKE
ON CONSUMER
SPENDING.

job rankings of all metro areas compiled by
Arizona State University, Phoenix-Mesa was
second only to Atlanta in the large-metro
rankings (39 areas with more than 750,000
jobs), and 11th when compared to all metro
areas, both large and small (nearly 300
metro areas). Second quarter retail sales
were a strong 11.3% higher than a year
earlier, resale home sales rested at a recordhigh 44,000 annual rate, and both building
activity and population growth remained
near peak levels for this expansion.
The pace is slowing in metro Phoenix,
but not as fast as expected. Therefore, we’ve
raised our forecasts for this year – job and
personal income growth both by 0.7%, and
sales by more than 2.5%. We continue to
expect a significant slowing during the
remainder of this year and next to rates of
growth more in line with long-term averages.
For example, job growth of under four
percent next year and only 2.5% in 1998
is expected.
Metro Tucson’s economy has already
slowed to what might be considered “normal”
levels. Employment growth over-the-year in
recent months has been running in the 2.53.5% range, up from only 0.75% in the final
quarter of last year. Retail sales registered a
solid 7.2% gain in the first quarter, then
a soft 1.5% gain during the second. Both
building permits and awards have leveled
off and resale home sales are steady after
regaining lost ground in early 1995. Overall,
Tucson is behaving about as one would
expect for this stage of the business cycle.
For Tucson, our forecasts for 1996 remain
largely unchanged from those found in last
quarter’s forecast, except for a small boost in
retail sales. Tucson appears to have reached
an equilibrium steady-state and is expected
to continue growing throughout the next two
years at a pace similar to that which exists
today. Expect job growth of 2.5-3.0%, population gains averaging 2.1%, and retail sales
increases in the neighborhood of five percent.

FORECAST RISKS
The biggest risks to the outlook at this
point are net migration flows, which could
remain high and keep the economy moving
forward at above average rates. On the
negative side are emerging problems with
consumer credit, which could lead to lower
consumer spending and higher interest rates.
Additionally, the structure of the economy is
changing quickly with deregulation of the
PAGE FIVE

communications, utilities and financial
services industries. Our experience with
deregulation of the transportation and telephone industries suggests that employment
and prices should fall.
Although the U.S. economy appears to be
in good shape at present, it is possible that
the slowdown later this year could turn into
recession in 1997. Inflation could take a turn
for the worse, interest rates could spike
along with Fed tightening, and a mild shortlived recession would follow. In this (CYCLE)
scenario, Arizona’s manufacturing employment falls, migration flows slow significantly,
construction activity takes a dive, and
Arizona’s economy slows to a crawl in 1997.
Job growth is only 1.6% in 1997, three full
points below the BASE. Personal income,
rather than increasing by 7.8% and 6.9%,
manages gains of only 6.3% and 5.0% during
1997 and 1998.
Alternatively, the economy could turn out
to be stronger as the bond market rallies, the
Fed cuts interest rates, consumers continue
spending, business investment surges, and
exports grow rapidly as economies of our
trading partners, including Mexico, improve.
Arizona’s manufacturing employment surges,
a boom in commercial construction arrives
in full force and migration flows remain
much higher than assumed in the BASE.
The results (our HIGH scenario) for 1997
shows population growth of 2.8%, job gains
of 4.6% and personal income gains in the
high-seven percent range.
We assign subjective probabilities of
20% to the CYCLE and 15% for the HIGH
scenario. That leaves 65% for the BASE
case (Exhibit 7). $

S P O N S O R S

Arizona Bank
Arizona Joint Legislative Budget
Committee
Arizona Public Service Company
Bank One of Arizona
City of Tucson Government
Estes Homebuilding Company
Pima County Government
Salt River Project
Tucson Electric Power Company
Tucson Newspapers
U S West Communications
Wells Fargo Bank

PAGE SIX

What’s in store
for Arizona’s economy?
Find out at The University of Arizona
College of Business and Public Administration’s

1997/1998 ECONOMIC
OUTLOOK LUNCHEON

Presentations by
Marshall J. Vest
Economic and Business
Research Program
Gerald J. Swanson
Economics Department
Meet Mark Zupan
New Dean of the College of Business
and Public Administration

Tuesday, January 21, 1997
Noon-2:00 p.m.
Westin La Paloma
$35 per person; $280 per table of 8*
Reservations required.
Call 621-2930 for information
and reservations
*Fee is not a charitable contribution.

ARIZONA'S ECONOMY

F O R E C A S T

T A B L E S

Forecasts for Arizona
Personal Income ($ mill)
percent change
Per Capita Personal Income
percent change
Aggregate Retail Sales ($ mill)*
percent change
Population (000s, mid-year)
percent change
Net Migration (000s)
Wage & Salary Employment (000s)
percent change
Goods-Producing
percent change
Construction
percent change
Manufacturing
percent change
Service-Providing
percent change
Trade (Wholesale & Retail)
percent change
Services
percent change

1994
78,049.8
8.7
19,136.6
5.2
34,969.9
10.7
4,078.6
3.4
100.3
1,691.9
6.7
310.6
11.8
108.5
21.6
190.1
7.7
1,381.4
5.6
416.4
6.9
484.9
7.6

1995
86,767.7
11.2
20,571.1
7.5
37,765.4
8.0
4,217.9
3.4
98.5
1,786.1
5.6
325.8
4.9
120.0
10.6
193.8
2.0
1,460.3
5.7
447.7
7.5
518.7
7.0

1996
93,577.3
7.8
21,547.2
4.7
40,993.1
8.5
4,342.9
3.0
82.0
1,863.2
4.3
340.3
4.4
126.7
5.6
201.0
3.7
1,522.9
4.3
458.8
2.5
550.5
6.1

1997
100,138.1
7.0
22,450.6
4.2
42,615.4
4.0
4,460.4
2.7
78.5
1,925.3
3.3
346.6
1.8
127.0
0.2
206.7
2.9
1,578.8
3.7
470.3
2.5
580.7
5.5

1998
106,155.2
6.0
23,229.8
3.5
44,294.4
3.9
4,569.8
2.5
68.0
1,972.4
2.4
345.3
-0.4
123.8
-2.5
208.7
0.9
1,627.1
3.1
479.4
1.9
608.4
4.8

Forecasts for Phoenix-Mesa Metro Area
Personal Income ($ mill)
percent change
Per Capita Personal Income
percent change
Aggregate Retail Sales ($ mill)*
percent change
Population (000s, mid-year)
percent change
Net Migration (000s)
Wage & Salary Employment (000s)
percent change
Goods-Producing
percent change
Construction
percent change
Manufacturing
percent change
Service-Providing
percent change
Trade (Wholesale & Retail)
percent change
Services
percent change

1994
51,937.9
9.0
20,986.7
5.4
22,892.6
12.5
2,474.8
3.5
60.1
1,142.5
6.8
226.2
12.3
74.7
22.4
146.7
8.0
916.4
5.6
280.4
7.0
336.0
8.7

1995
57,630.6
11.0
22,480.5
7.1
24,961.2
9.0
2,563.6
3.6
64.1
1,219.6
6.7
237.7
5.1
81.3
8.9
151.4
3.2
981.9
7.2
297.9
6.2
362.3
7.8

1996
62,452.8
8.4
23,533.3
4.7
27,196.6
9.0
2,653.8
3.5
64.2
1,286.0
5.4
251.4
5.8
88.5
8.8
158.0
4.3
1,034.6
5.4
311.2
4.5
388.6
7.2

1997
66,306.5
6.2
24,221.9
2.9
28,513.7
4.8
2,737.5
3.2
56.9
1,335.0
3.8
260.6
3.7
90.7
2.5
165.0
4.4
1,074.3
3.8
320.2
2.9
410.7
5.7

1998
69,725.4
5.2
24,810.8
2.4
29,764.5
4.4
2,810.3
2.7
45.3
1,368.1
2.5
262.0
0.5
89.1
-1.7
167.9
1.8
1,106.1
3.0
326.6
2.0
429.8
4.6

Forecasts for Tucson Metro Area
Personal Income ($ mill)
percent change
Per Capita Personal Income
percent change
Aggregate Retail Sales ($ mill)*
percent change
Population (000s, mid-year)
percent change
Net Migration (000s)
Wage & Salary Employment (000s)
percent change
Goods-Producing
percent change
Construction
percent change
Manufacturing
percent change
Service-Providing
percent change
Trade (Wholesale & Retail)
percent change
Services
percent change

1994
13,587.9
9.8
18,397.6
7.0
6,067.4
9.2
738.6
2.6
13.8
294.5
7.0
47.4
13.2
18.9
21.0
26.4
9.8
247.1
5.9
67.8
6.7
88.4
6.2

1995
14,480.3
6.6
19,053.0
3.6
6,300.6
3.8
760.0
2.9
16.8
302.4
2.7
50.0
5.5
19.9
4.9
27.9
5.7
252.4
2.1
68.5
1.1
93.0
5.2

1996
15,183.5
4.9
19,573.4
2.7
6,687.3
6.1
775.7
2.1
11.1
308.4
2.0
48.5
-3.0
20.1
1.0
26.3
-6.0
259.9
3.0
69.5
1.5
97.8
5.1

1997
15,969.9
5.2
20,181.5
3.1
6,989.9
4.5
791.3
2.0
11.0
317.1
2.8
48.5
0.1
20.1
0.1
26.3
-0.1
268.6
3.3
70.9
1.9
102.6
4.9

1998
16,747.2
4.9
20,732.7
2.7
7,309.2
4.6
807.8
2.1
11.6
324.8
2.4
48.4
-0.4
20.2
0.4
26.0
-1.0
276.4
2.9
72.4
2.1
107.3
4.6

* Aggregate Retail Sales includes retail, food, restaurant & bars and gasoline sales.
Source: Economic and Business Research Program, Karl Eller Graduate School of Management, College of Business and Public Administration, The University of Arizona

AR IZ ON A 'S E CON O MY

PAGE SEVEN

TABLE 1
Percent of firms providing formal
or informal training, by firm size

This article is based upon the report by
Arthur L. Silvers and Brian C. Catts,
“Expenditures and Attributes of EmployerBased Workforce Training in Arizona,”
April, 1996 to the Governor’s Division of
Workforce Development, State of Arizona.

EMPLOYER-PROVIDED
TRAINING IN ARIZONA
Arthur L. Silvers
Professor, School of Public
Administration and Policy

M

by far the largest proportion of Arizona’s
firms, and was undersampled to give the
relatively small number of large firms a
better chance for inclusion in the sample.
Finally, both single- and multi-establishment
firms were sampled; single-establishment
firms account for 63% of the surveyed firms.
The survey questionnaire was mailed to
those company officers who have responsibility for training activities and asked about
training-related activities for the calendar
year 1994.
After briefly describing the types of firms
that provide training, the article shows how
much firms spend on both formal and informal training; outlines the kinds and sources
of formal training provided; and looks at the
impact on employees receiving training.

This study makes use of a survey of 380
firms in all counties of the state. Maricopa
and Pima account for 70% of surveyed
firms; the 30% share for the less populous
counties is high relative to their share of
Arizona employment. All economic sectors
are included, but the service sector accounts
for 39% of surveyed firms, which is high
relative to their actual share. While all size
classes are represented, the smallest size
class (fewer than 20 employees) accounts
for 24% of surveyed firms. This size class has

TYPES OF FIRMS THAT
PROVIDE TRAINING

uch is known about
the activities of schools,
colleges, and training
centers in teaching skills to the
workforce. Less is known about
the role that employers play in
actively teaching skills to their
employees. The study described
here was undertaken at The
University of Arizona to identify
the training activities of Arizona
firms, their training expenditures
and the types of employees that
they train.

PAGE EIGHT

Firms were asked whether or not they
provide training for their employees, and to
consider informal training separately from
their formal activities. But nearly one-fifth
(18.5%) of Arizona firms provide no training
at all, and this percentage is the same whether
the firm is located in a major metropolitan
county or not. The three leading reasons
cited for not offering training were:

1) workers don’t need additional
training;
2) labor turnover is too high to make
training worthwhile; and
3) lack of funds for training.
Formal training, given by a professional
trainer or by a co-worker assigned to training
responsibilities, often using instructional
materials, is provided by 56% of the firms.
Informal training – training given on-thejob on a one-on-one basis by a supervisor
or a peer – is provided by 77% of the
surveyed firms.
As would be expected, the larger firms are
the most likely to provide formal training –
90% of the firms with 500 or more
employees. But it shouldn’t be presumed
that the very small firms do not provide
formal training. Nearly half – 45% – of all
firms with fewer than 20 employees have
formal training for their workers (Table 1).
This proportion is about the same for firms
with 20 to 49 employees.
In fact, 77.4% of the smallest size firms
(under 20 employees) provide informal
training and this is slightly higher, proportionately, than firms in the next three size
classes (20 - 199) that provide informal
training. However, the proportion jumps to
90% for firms with 200 or more employees.
ARIZONA'S ECONOMY

TABLE 2
Percent of firms providing formal or informal training, by sector of firm

The sector in which a firm does business
affects the likelihood that it provides formal
training. The sectors most likely to provide
formal training are mining, transportation,
communications and public facilities (TCPU),
and finance, insurance and real estate (FIRE).
At least two-thirds of the firms in these
sectors provide formal training (Table 2).
The sectors in which firms are least likely
to provide formal training are agriculture,
construction, wholesaling and retailing
sectors, in which no more than half of the
firms provide formal training.
Again, agricultural and construction firms
are the least likely and TCPU firms are among
the most likely to offer informal or formal
training while wholesalers and manufacturers
are shown as the most likely to provide
informal training.

FIGURE 1
Distribution of aggregate Arizona employer-provided
training expenditures in millions of dollars, 1994
The total expenditures for both types of training is $1,077.5 million dollars

Formal training
Informal training

TRAINING EXPENDITURES
OF ARIZONA FIRMS
Measures were obtained for four types
of training expenditures:
• in-house training costs (training staff
and materials);
• contracts with outside training
providers;
AR IZ ON A 'S ECON O MY

When wage expenditures are included, Arizona’s private sector spent virtually as much for informal training as for formal
training ($529.7 million versus $547.8 million, respectively).

PAGE NINE

TABLE 3
Percent of firms offering types of formal training

• wages paid to employees who receive
formal or informal training during
working hours;
• wages paid to peers and supervisors
diverted from job duties to provide
informal training.
Total firm expenditures for both in-house
training costs and outside providers were
provided by respondents, and both types of
expenditures are for formal training. However,
expenditures had to be estimated for wages
paid 1) to employees during the time they
spent receiving formal and informal training
and 2) to supervisors and peer employees
during the time they provide informal
training to others.
The total firm wage expenditure estimates
were obtained by asking respondents to

AMONG THE LEAST FREQUENTLY
TAUGHT SKILLS ARE
SPANISH LANGUAGE,
BASIC EDUCATION AND
INTERNATIONAL TRADE.

TABLE 4
Types of outside providers used for training

THIS RAISES QUESTIONS
ABOUT THE BREADTH OF INTEREST
ARIZONA BUSINESSES HAVE
IN TRADE WITH MEXICO.

* The percents add to more than 100% because firms may cite more than one type of outside provider.

PAGE TEN

indicate 1) the average number of formal
and informal training hours per employee
by occupation of employee; 2) the number
of employees receiving formal and informal
training or providing informal training by
occupation of employee; and 3) average
hourly wages by occupation of employee.
These three measures were multiplied
together to yield the firm’s estimated total
wage expenditures for time spent while
receiving or providing training.
The figures were then converted to
expenditures per establishment and weighted
by the total number of establishments in
Arizona, all by size of establishment, to
estimate Arizona’s total private sector
training expenditures.
ARIZONA'S ECONOMY

In 1994, Arizona’s private sector spent an
estimated $1.08 billion for all types of training. This comes to an average of $636 per
full-time employee, or $2.35 for each $100
spent for total employee wages and salaries.
Figure 1 shows 33% of the state-wide
training expenditure total ($464.6 million)
was for direct in-house and outside provider
expenditures for formal training. The majority
of these expenditures (67%) were for the
wages paid either to employees on company
time while receiving training or to supervisors and peers while providing informal
training.
When wage expenditures are included,
Arizona’s private sector spent virtually as
much for informal training as for formal
training ($529.7 million versus $547.8
million, respectively).

FIGURE 2
Occupational distribution
of total training hours (PCT)

TYPES AND SOURCES OF
FORMAL TRAINING PROVIDED
The types of formal training skills offered
by the surveyed firms are shown in Table 3.
The five most frequently taught are: computer
skills, sales and customer service, teamwork
or cross-training, health, safety and environmental, and production/technical skills, in
that order. Among the least frequently taught
skills are Spanish language, basic education
and international trade. This raises questions
about the breadth of interest Arizona
businesses have in trade with Mexico.
Of the surveyed firms that provide formal
training, one-third (32.9%) maintain a
formal training department. However,
staffing of formal training activities is not
limited to formal training departments since
employees in a variety of departments may
have the expertise appropriate to train others.
Four-fifths of the firms providing formal
training (79.4%) indicated the use for training of in-house staff not assigned to a formal
training department.
Firms also contract with outside providers
for formal training, used by 71% of sampled
firms that provide formal training. Of firms
using outside training providers, the mean
expenditure in 1994 was $18,059.
The types of outside providers used are
shown in Table 4. Most frequently used are
private consultants (69.1%), followed by
industry, trade or professional organizations
(61.1%). But nearly half of these firms
chose equipment suppliers and community
colleges for their training needs.
A R IZ ON A 'S E CON O MY

IMPACTS UPON EMPLOYEES
RECEIVING TRAINING
As cited earlier, some firms choose not
to invest in upgrading the skills of their
employees because they anticipate that many
would quit to gain higher pay elsewhere.
This issue was analyzed in this survey with
the use of more advanced statistical methods
(multiple regression analysis). Contrary to
these expectations, it was found that increased
training expenditures per employee are
associated with significantly lower nonsupervisory turnover rates. Likely explanations are that firms limit training to workers
or to skills that are less likely to induce turnover, either selecting employees who have
demonstrated loyalty to the firm, or selecting
skills that are specific to the firm rather than
to the general labor market.
Concern has been raised that although
employer-provided training has the potential
to raise the earnings of wage employees
by raising their productivity, it may favor
occupations with the highest earnings. A
consequence, some have argued, is that it
tends to worsen the earnings gap between
the lower and higher paid occupations. We

tested this issue in our survey by estimating
the mean number of hours of both formal
and informal training received by each
occupation during 1994.
The two wage-employee occupations,
customer service and production, account
for well over half of the total training
hours (64% of informal and 58% of
formal training hours). Office/clerical
workers account for another small
percentage (seven percent of
informal and four percent of
formal training hours). In contrast, the manager/professional
occupations account for nine
percent of total hours of informal
training and 15% of formal training hours provided by employers
(Figure 2).
These percentages can be given
perspective by comparing them
with Arizona’s occupational distribution of employment. In 1990,
56% of Arizona’s workforce
was in the service, production
or office/clerical occupations,
while 27.5% was in managerial
or professional occupations.
These comparisons suggest that employerprovided training benefits wage employees
relatively more than the higher paid
manager/professional occupations.
However, additional survey data shows
that 25% of formal training expenditures
for both in-house activities and outside
providers were directed toward the manager/
professional occupations; and only 37% of
these expenditures were directed toward the
three wage-employee groups – the customer
service, production and office/clerical
occupations. These are the direct expenditures and do not include the wages and
salaries paid to employees during their
training hours.
Apparently, the manager/professional
occupations are provided with the more
costly types of formal training that may
yield relatively higher productivity impacts.
But whether the manager/professionals
who receive more costly training (but
fewer training hours) benefit more than
wage employees who receive the opposite
configuration (less costly training but
more training hours) is a question for
further study. $

PAGE ELEVEN

A R I Z O N A

YUMA METROPOLITAN REGION
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Mining
Construction
Manufacturing
Trans., Comm. & Publ. Util.
Trade
Finance, Ins. & Real Estate
Services
Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bar
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Value of Construction Contract Awards ($000s) F.W. Dodge
Total
Residential Building
Non-Residential Building
Non-Building
Number of Dwelling Units Awarded, F.W. Dodge
Total
One Family Houses
MOHAVE-LA PAZ REGION
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Mining
Construction
Manufacturing
Trans., Comm. & Publ. Util.
Trade
Finance, Ins. & Real Estate
Services
Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bar
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Value of Construction Contract Awards ($000s) F.W. Dodge
Total
Residential Building
Non-Residential Building
Non-Building
Number of Dwelling Units Awarded, F.W. Dodge
Total
One Family Houses

E C O N O M I C

I N D I C A T O R S

% change versus year ago for:
most
most
recent
recent
month
12-months

MAY
96

JUN
96

JUL
96

AUG
96

SEP
96

64,800
44,875
19,925
30.7

69,150
45,800
23,350
33.8

70,800
44,350
26,450
37.4

72,400
45,100
27,300
37.7

72,150
45,950
26,200
36.3

3.2
-1.4
12.4
9.0

-1.9
1.6
-10.0
-9.0

35,600
0
1,500
1,300
1,800
11,400
1,100
9,100
9,400

35,100
0
1,500
1,300
1,800
11,200
1,100
9,200
9,000

34,200
0
1,600
1,300
1,700
11,100
1,100
9,100
8,300

34,800
0
1,500
1,300
1,800
11,200
1,200
9,100
8,700

35,800
0
1,600
1,300
1,800
11,300
1,200
9,100
9,500

0.6
...
0.0
-7.1
0.0
-3.4
0.0
8.3
0.0

2.0
...
-8.6
-8.5
2.9
-0.3
-4.7
9.6
2.8

62,193
47,980
6,866
7,347
5,072
11,077

29,275
16,108
5,765
7,402
5,187
9,539

55,362
42,667
6,142
6,553
4,729
12,465

53,988
42,736
6,229
5,023
3,751
11,731

...
...
...
...
...
...

-6.0
-4.7
7.0
-26.1
-33.3
-3.7

1.0
0.1
2.9
5.9
0.6
9.5

9,841
7,225
1,048
1,568

14,915
6,917
4,918
3,080

11,656
4,951
3,430
3,275

15,077
5,365
5,159
4,553

13,046
7,495
4,366
1,185

-25.8
22.5
-23.2
-79.5

12.0
8.5
10.8
21.8

89
86

78
78

61
61

77
77

97
97

26.0
26.0

11.2
8.9

67,250
63,175
4,075
6.1

69,200
64,675
4,525
6.5

69,325
64,725
4,600
6.6

68,800
64,200
4,600
6.7

69,250
64,100
5,150
7.4

4.1
3.0
20.5
15.7

6.7
7.7
-5.1
-11.5

37,900
200
2,600
3,500
2,000
11,300
1,500
9,300
7,500

38,000
200
2,600
3,500
2,000
11,200
1,500
9,400
7,600

38,200
200
2,700
3,600
2,000
11,200
1,500
9,400
7,600

37,900
200
2,600
3,600
2,000
11,300
1,500
9,200
7,500

38,100
200
2,600
3,700
2,000
11,300
1,500
9,200
7,600

-0.8
0.0
-3.7
-2.6
5.3
0.9
0.0
-2.1
-1.3

2.2
20.0
-7.0
-1.4
10.6
1.6
-6.8
2.9
7.6

90,705
62,603
11,393
16,709
11,535
13,275

81,987
56,559
11,194
14,234
9,974
14,632

85,277
60,034
11,103
14,140
10,203
14,463

83,060
59,360
10,446
13,254
9,899
15,564

...
...
...
...
...
...

12.3
11.5
7.3
20.5
8.8
2.2

10.1
7.3
7.4
28.0
20.1
-5.6

29,121
15,242
5,487
8,392

15,645
11,747
1,480
2,418

22,368
15,305
284
6,779

18,542
11,829
3,123
3,590

18,435
13,279
3,774
1,382

3.7
44.1
76.7
-78.5

-9.6
6.8
-62.2
26.3

171
171

140
138

189
137

130
130

164
164

36.7
46.4

5.3
4.2

See notes at bottom of Arizona - Quarterly table.
PAGE TWELVE

ARIZONA'S ECONOMY

A R I Z O N A

COCHISE-SANTA CRUZ REGION
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Mining
Construction
Manufacturing
Trans., Comm. & Publ. Util.
Trade
Finance, Ins. & Real Estate
Services
Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bar
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Value of Construction Contract Awards ($000s) F.W. Dodge
Total
Residential Building
Non-Residential Building
Non-Building
Number of Dwelling Units Awarded, F.W. Dodge
Total
One Family Houses
GILA-GRAHAM-GREENLEE REGION
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Mining
Construction
Manufacturing
Trans., Comm. & Publ. Util.
Trade
Finance, Ins. & Real Estate
Services
Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bar
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Value of Construction Contract Awards ($000s) F.W. Dodge
Total
Residential Building
Non-Residential Building
Non-Building
Number of Dwelling Units Awarded, F.W. Dodge
Total
One Family Houses

E C O N O M I C

I N D I C A T O R S

% change versus year ago for:
most
most
recent
recent
month
12-months

MAY
96

JUN
96

JUL
96

AUG
96

SEP
96

56,525
50,775
5,750
10.2

59,125
51,450
7,675
13.0

59,075
51,100
7,975
13.5

59,175
50,975
8,200
13.9

59,675
50,550
9,125
15.3

2.1
0.5
11.6
9.4

2.6
2.8
0.8
-1.9

42,200
0
2,000
2,000
2,300
11,200
800
9,300
14,600

41,600
0
1,900
2,000
2,400
10,900
800
9,300
14,300

41,500
0
1,900
2,000
2,400
10,800
900
9,500
14,000

41,400
0
1,900
2,100
2,300
10,700
800
9,300
14,300

41,700
0
2,000
2,300
2,200
10,700
900
9,200
14,400

2.5
-100.0
0.0
15.0
0.0
-0.9
-10.0
3.4
5.1

3.2
-75.0
3.5
2.9
3.8
-3.4
-14.0
7.4
8.1

57,454
42,977
7,551
6,926
4,781
11,880

61,868
46,214
8,223
7,431
5,207
12,763

60,276
46,424
7,247
6,605
4,766
14,546

58,724
45,604
7,672
5,448
4,069
11,055

...
...
...
...
...
...

0.5
1.5
9.1
-16.0
-24.2
-17.9

-1.4
-2.7
0.8
5.2
-0.5
-5.2

11,933
6,668
2,616
2,649

11,690
6,815
3,220
1,655

13,241
6,090
180
6,971

20,976
9,229
6,278
5,469

23,035
6,466
9,200
7,369

206.4
57.8
756.6
213.8

14.1
61.7
-31.0
-11.4

80
80

84
84

82
82

89
87

86
86

10.3
10.3

10.1
13.9

35,250
32,775
2,475
7.0

36,175
33,200
2,975
8.2

35,400
32,425
2,975
8.4

34,900
32,050
2,850
8.2

35,050
31,975
3,075
8.8

-3.5
-4.6
9.8
13.8

4.4
4.8
-0.3
-4.8

26,100
2,900
1,600
2,100
800
5,500
600
5,100
7,500

25,900
2,900
1,600
2,100
800
5,400
600
5,200
7,300

25,300
2,900
1,600
2,100
800
5,400
600
5,200
6,700

25,300
2,900
1,700
2,100
800
5,400
600
5,100
6,700

25,800
3,000
1,700
2,100
800
5,500
600
5,100
7,000

0.0
7.1
-5.6
10.5
0.0
-3.5
20.0
0.0
-2.8

5.9
0.9
-0.5
10.0
9.1
-1.8
1.5
16.3
8.1

41,050
30,854
5,607
4,589
3,168
10,225

41,718
31,572
5,441
4,705
3,297
13,016

42,055
31,601
5,383
5,071
3,659
12,694

40,084
30,398
5,494
4,192
3,131
11,667

...
...
...
...
...
...

0.3
0.7
1.2
-3.3
-12.7
48.4

5.6
5.3
6.0
7.4
1.2
8.1

5,393
4,823
205
365

8,640
5,736
1,781
1,123

7,433
4,149
419
2,865

8,504
2,815
1,409
4,280

9,730
4,118
5,040
572

51.5
36.2
...
-83.2

1.5
17.3
-38.8
20.5

53
53

57
51

43
43

35
33

38
38

-11.6
31.0

9.9
28.2

See notes at bottom of Arizona - Quarterly table.
AR IZ ON A 'S ECON O MY

PAGE THIRTEEN

A R I Z O N A

APACHE-NAVAJO REGION
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Mining
Construction
Manufacturing
Trans., Comm. & Publ. Util.
Trade
Finance, Ins. & Real Estate
Services
Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bar
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Value of Construction Contract Awards ($000s) F.W. Dodge
Total
Residential Building
Non-Residential Building
Non-Building
Number of Dwelling Units Awarded, F.W. Dodge
Total
One Family Houses
COCONINO-YAVAPAI REGION
Civilian Labor Force, ADES
Employment
Unemployment
Unemployment Rate (%)
Employees on Nonagricultural Payrolls, ADES
Total
Mining
Construction
Manufacturing
Trans., Comm. & Publ. Util.
Trade
Finance, Ins. & Real Estate
Services
Government
Sales ($000s) ADOR
Gross Retail
Retail
Restaurants & Bar
Gasoline, EBR
Gallons (000s) ADOT
Contracting
Value of Construction Contract Awards ($000s) F.W. Dodge
Total
Residential Building
Non-Residential Building
Non-Building
Number of Dwelling Units Awarded, F.W. Dodge
Total
One Family Houses

E C O N O M I C

I N D I C A T O R S

% change versus year ago for:
most
most
recent
recent
month
12-months

MAY
96

JUN
96

JUL
96

AUG
96

SEP
96

50,850
43,950
6,900
13.6

53,775
43,375
10,400
19.3

54,525
43,175
11,350
20.8

52,325
43,375
8,950
17.1

51,700
43,425
8,275
16.0

2.1
-0.4
17.8
15.3

1.9
2.3
-0.2
-2.0

41,500
900
1,700
1,700
2,800
7,100
1,600
11,000
14,700

40,500
900
1,800
1,700
2,900
7,100
1,600
11,200
13,200

40,100
900
1,800
1,700
2,900
7,300
1,500
11,100
12,900

40,800
900
1,800
1,800
2,900
7,200
1,500
11,000
13,700

41,700
900
1,800
1,800
2,900
7,100
1,600
11,000
14,600

4.2
-10.0
12.5
5.9
0.0
1.4
14.3
1.9
7.4

3.0
-7.5
9.0
-5.9
0.0
1.2
10.6
3.3
1.1

64,236
48,524
5,537
10,175
7,024
9,797

62,520
45,565
6,662
10,293
7,213
9,845

60,269
43,954
5,758
10,557
7,617
10,574

65,357
49,628
6,324
9,405
7,024
11,054

...
...
...
...
...
...

-1.8
-2.4
16.9
-8.5
-17.4
17.2

-28.1
-34.7
7.8
5.1
-1.1
30.4

11,856
8,949
221
2,686

19,192
5,377
5,793
8,022

9,910
6,164
220
3,526

19,982
12,935
41
7,006

6,007
4,159
1,248
600

-26.2
14.2
-48.7
-71.0

-8.6
28.9
-26.4
-23.2

116
116

53
53

70
70

156
156

46
46

12.2
12.2

42.0
43.9

118,400
111,850
6,550
5.5

121,800
113,375
8,425
6.9

122,300
113,675
8,625
7.1

120,350
112,925
7,425
6.2

120,225
112,525
7,700
6.4

-3.3
-4.0
7.7
11.4

1.9
2.4
-5.5
-7.4

90,100
900
6,400
5,400
2,900
24,100
2,400
23,300
24,700

89,800
900
6,500
5,400
3,000
24,600
2,400
23,900
23,100

89,400
900
6,400
5,400
2,900
24,700
2,300
23,900
22,900

90,100
1,000
6,400
5,400
2,900
24,600
2,400
24,100
23,300

91,400
900
6,400
5,500
2,900
24,600
2,400
23,800
24,900

-0.3
0.0
4.9
-1.8
-3.3
-2.0
0.0
0.4
-0.0

2.8
5.8
5.7
-7.4
-1.1
1.1
-4.7
2.4
8.4

169,364
119,573
29,460
20,331
14,035
35,960

175,103
122,872
32,297
19,934
13,968
42,249

175,297
121,872
32,578
20,847
15,042
42,445

175,036
124,082
31,725
19,229
14,361
46,365

...
...
...
...
...
...

5.6
6.0
0.9
10.8
0.1
32.2

7.7
7.4
7.8
9.4
2.5
31.2

47,026
24,502
4,887
17,637

41,926
22,116
9,782
10,028

47,360
29,177
10,423
7,760

53,752
32,016
8,606
13,130

47,146
23,536
15,033
8,577

8.1
-27.7
89.7
173.8

15.6
-11.6
39.2
127.6

249
208

223
208

426
200

469
219

228
215

-55.5
12.0

-4.8
-0.9

See notes at bottom of Arizona - Quarterly table.
PA GE F OU R TEE N

ARIZONA'S ECONOMY

A R I Z O N A

E C O N O M I C

PHOENIX-MESA METROPOLITAN REGION (MARICOPA AND PINAL)
Civilian Labor Force (000s) ADES
Employment
Unemployment
Unemployment Rate, Seas. Adj. (%)
Employees on Nonagricultural Payrolls (000s) ADES
Total
Mining
Construction
Manufacturing
Durable
Nondurable
Trans., Comm. & Publ. Util.
Trade
Wholesale
Retail
Finance, Ins. & Real Estate
Services
Government
Sales ($000s) ADOR
Aggregate Retail Sales
Retail
Food, EBR
Restaurants & Bars
Gasoline, EBR
Contracting
Value of Construction Contract Awards ($000s) F.W. Dodge
Total Awards
Residential Building
Non-Residential Building
Non-Building
New Housing Units Authorized, Census C-40
Total Units
Single Family Units
2-4 Unit Structures
5-plus Unit Structures
Housing Sales and Prices, ARMLS
Total Sales ($000s)
Total Units
Average Price ($)
Phoenix Skyharbor International Airport, PSIA
Total Passengers
Total Aircraft Movements

I N D I C A T O R S

% change versus year ago for:
most
most
recent
recent
month
12-months

MAY
96

JUN
96

JUL
96

AUG
96

SEP
96

1,383.4
1,338.2
45.2
3.6

1,399.3
1,346.8
52.5
3.6

1,396.3
1,342.7
53.6
3.7

1,388.2
1,334.9
53.3
3.8

1,394.1
1,336.3
57.8
3.8

1.3
0.8
12.9
11.8

3.7
4.1
-5.9
-8.9

1,275.6
5.1
87.2
154.6
117.5
37.1
64.2
320.9
78.7
242.2
88.9
385.5
169.2

1,261.7
5.1
87.6
155.7
118.9
36.8
65.6
319.8
78.8
241.0
89.2
385.9
152.8

1,254.7
5.2
88.6
155.8
119.2
36.6
65.8
319.7
78.9
240.8
89.4
385.0
145.2

1,263.5
5.1
90.3
156.2
119.4
36.8
66.0
322.0
79.4
242.6
89.9
386.3
147.7

1,284.7
5.1
88.6
156.9
120.0
36.9
66.1
325.4
79.9
245.5
90.0
388.0
164.6

5.0
-1.9
6.0
4.8
6.6
-0.5
3.9
5.3
8.9
4.2
3.4
6.9
1.5

4.9
0.6
6.8
4.0
5.3
-0.1
1.2
5.0
7.2
4.3
1.4
6.4
4.7

2,330,292
1,631,094
292,951
266,868
139,379
436,511

2,290,417
1,604,147
287,266
256,386
142,618
482,341

2,016,420
1,392,407
275,618
216,349
132,046
454,764

2,117,271
1,505,265
275,898
225,703
110,406
459,484

...
...
...
...
...
...

6.5
7.3
4.8
8.2
-3.0
10.2

10.4
10.2
8.1
10.1
19.4
24.3

519,552
392,973
100,772
25,807

664,260
435,096
154,672
74,492

565,389
402,001
105,622
57,766

642,023
372,426
219,657
49,940

746,751
436,626
281,817
28,308

56.6
29.8
190.4
-35.1

10.7
12.1
16.7
-10.3

3,350
2,834
10
506

3,040
2,635
10
395

3,350
2,715
38
597

2,487
2,397
32
58

...
...
...
...

-24.9
-17.1
-39.6
-84.3

9.6
11.3
-25.6
6.6

560,125
4,458
125,645

506,278
4,039
125,347

488,548
3,824
127,758

508,908
3,856
131,978

356,513
2,808
126,963

-9.4
-16.3
8.2

27.1
20.8
5.4

2,499,058
35,112

2,489,193
33,478

2,483,039
34,534

...
...

...
...

3.6
4.8

9.1
-17.1

PHOENIX-MESA METROPOLITAN REGION (MARICOPA AND PINAL) - QUARTERLY DATA

Demographics & Vital Statistics (000s, seas adj) ADHS & EBR
Population
Natural Increase
Births
Deaths
Net Migration
Personal Income by Source ($mil, SAAR) EBR
Total Personal Income
Earnings by Place of Work
Less: Contributions for Social Insurance
Plus: Adjustment for Residence
Plus: Dividends, Interest & Rents
Plus: Transfer Payments
Per Capita Personal Income ($, SAAR) EBR

% change versus year ago for:
most
most
recent
recent
quarter
4-quarters

III
95

IV
95

I
96

II
96

III
96

2,574.9
6.2
11.3
5.1
16.2

2,597.4
6.3
11.4
5.1
16.2

2,620.0
6.4
11.5
5.1
16.2

2,642.5
6.5
11.6
5.2
16.1

2,665.1
6.5
11.7
5.2
16.0

3.5
5.2
4.0
2.5
-1.3

3.5
5.6
4.1
2.2
0.3

58,340
42,399
2,583
-32
9,603
8,954
22,657

59,497
43,275
2,637
-32
9,764
9,127
22,906

60,645
44,148
2,691
-32
9,922
9,298
23,147

61,850
45,047
2,741
-32
10,102
9,475
23,406

63,056
45,945
2,791
-32
10,282
9,652
23,660

8.1
8.4
8.0
-0.1
7.1
7.8
4.4

8.9
9.0
7.5
1.1
8.5
8.3
5.1

See notes at bottom of Arizona - Quarterly table
A RIZO N A' S E CO N OMY

PAGE FIFTEEN

A R I Z O N A

E C O N O M I C

TUCSON METROPOLITAN REGION (PIMA)
Civilian Labor Force (000s) ADES
Employment
Unemployment
Unemployment Rate, Seas. Adj. (%)
Employees on Nonagricultural Payrolls (000s) ADES
Total
Mining
Construction
Manufacturing
Durable
Nondurable
Trans., Comm. & Publ. Util.
Trade
Wholesale
Retail
Finance, Ins. & Real Estate
Services
Government
Sales ($000s) ADOR
Aggregate Retail Sales
Retail
Food, EBR
Restaurants & Bars
Gasoline, EBR
Contracting
Value of Construction Contract Awards ($000s) F.W. Dodge
Total Awards
Residential Building
Non-Residential Building
Non-Building
New Housing Units Authorized, Census C-40
Total Units
Single Family Units
2-4 Unit Structures
5-plus Unit Structures
Housing Sales and Prices, TAR
Total Sales ($000s)
Total Units
Average Price ($)
Tucson International Airport, TAA
Total Passengers
Total Aircraft Movements

I N D I C A T O R S

% change versus year ago for:
most
most
recent
recent
month
12-months

MAY
96

JUN
96

JUL
96

AUG
96

SEP
96

373.2
361.2
12.0
3.6

372.8
359.0
13.8
3.6

367.8
353.8
14.0
3.8

367.6
354.2
13.4
3.7

371.9
357.1
14.8
3.8

-0.7
-1.2
13.0
18.7

1.2
1.2
-1.5
-1.7

310.4
2.3
20.0
27.7
22.6
5.1
13.5
70.2
10.5
59.7
11.9
93.6
71.2

303.4
2.4
20.2
27.8
22.7
5.1
13.5
69.5
10.5
59.0
12.0
93.0
65.0

298.0
2.4
20.5
27.6
22.6
5.0
13.2
69.2
10.7
58.5
12.0
92.7
60.4

302.5
2.4
20.5
27.7
22.7
5.0
13.4
68.7
10.4
58.3
12.2
92.9
64.7

310.0
2.3
20.2
28.0
22.9
5.1
13.4
69.1
10.4
58.7
12.3
93.4
71.3

3.1
4.5
2.0
1.4
2.7
-3.8
-0.7
1.6
6.1
0.9
5.1
2.5
6.9

2.0
7.4
3.3
1.1
2.0
-2.7
1.6
1.3
4.1
0.8
1.0
1.3
3.7

560,407
378,957
77,887
65,193
38,371
96,684

540,875
362,527
76,375
62,112
39,861
93,751

501,870
335,625
73,278
56,979
35,988
93,481

509,382
351,294
73,353
57,367
27,368
90,107

...
...
...
...
...
...

0.5
1.4
1.7
6.6
-20.9
-1.1

4.6
3.9
4.5
6.3
10.1
9.6

128,375
93,184
28,798
6,393

73,126
43,911
16,990
12,225

97,680
46,753
34,701
16,226

70,146
40,848
23,757
5,541

73,157
48,510
17,593
7,054

-33.7
-24.8
-7.8
-73.5

-9.7
-13.6
0.2
-10.1

587
495
20
72

458
400
4
54

638
425
8
205

440
416
8
16

...
...
...
...

-51.9
-13.5
14.3
-96.2

-10.2
-8.6
-53.8
-10.1

114,202
880
129,775

108,457
803
135,065

100,670
757
132,985

...
...
...

...
...
...

6.8
-3.7
10.9

13.6
7.5
5.8

320,038
22,166

274,808
19,087

269,928
18,359

269,231
19,588

249,728
17,995

2.8
-8.8

2.2
3.3

TUCSON METROPOLITAN REGION (PIMA) - QUARTERLY DATA

Demographics & Vital Statistics (000s, seas adj) ADHS & EBR
Population
Natural Increase
Births
Deaths
Net Migration
Personal Income by Source ($mil, SAAR) EBR
Total Personal Income
Earnings by Place of Work
Less: Contributions for Social Insurance
Plus: Adjustment for Residence
Plus: Dividends, Interest & Rents
Plus: Transfer Payments
Per Capita Personal Income ($, SAAR) EBR

% change versus year ago for:
most
most
recent
recent
quarter
4-quarters

III
95

IV
95

I
96

II
96

III
96

761.9
1.1
2.8
1.6
3.1

765.9
1.1
2.8
1.7
2.8

769.8
1.1
2.8
1.7
2.8

773.7
1.1
2.8
1.7
2.8

777.7
1.1
2.9
1.7
2.8

2.1
-0.3
2.2
3.9
-11.0

2.2
-0.8
1.5
3.1
-29.4

14,567
9,174
572
118
2,926
2,921
19,119

14,740
9,278
580
120
2,949
2,973
19,246

14,920
9,390
588
121
2,972
3,025
19,381

15,096
9,492
595
123
2,999
3,077
19,510

15,271
9,593
602
125
3,026
3,129
19,637

4.8
4.6
5.3
6.1
3.4
7.1
2.7

5.1
4.6
4.7
7.5
4.3
7.4
2.8

See notes at bottom of Arizona - Quarterly table
PAGE SIXTEEN

ARIZONA'S ECONOMY

A R I Z O N A

ARIZONA MONTHLY DATA
Civilian Labor Force (000s) ADES
Employment
Unemployment
Unemployment Rate, Seas. Adj. (%)
Employees on Nonagricultural Payrolls (000s) ADES
Total
Mining
Construction
Manufacturing
Durable
Nondurable
Trans., Comm. & Publ. Util.
Transportation
Trade
Wholesale
Retail
Finance, Ins. & Real Estate
Services
Government
Federal
State & Local
Schools
Hours Worked Per Week, Manufacturing, ADES
Average Hourly Earnings ($) ADES
Copper Mining
Construction
Manufacturing
Utilities
Retail Trade
Wholesale Trade
Sales ($000s) ADOR
Aggregate Retail Sales
Retail
Food, EBR
Restaurants & Bars
Gasoline, EBR
Gallons (000s) ADOT
Utilities
Communications
Amusements
Rentals - Real Property
Rentals - Personal Property
Contracting
Mining - Metal, Oil & Gas
Hotel/Motel
Value of Construction Contract Awards ($000s
Total Awards
Residential Building
Non-Residential Building
Non-Building
New Housing Units Authorized, Census C-40
Total Units
Single Family Units
2-4 Unit Structures
5-plus Unit Structures
Bankruptcy Filings, U.S. Bankruptcy Court
Total
Chapter 7
Chapter 11
Chapter 13

E C O N O M I C

I N D I C A T O R S

% change versus year ago for:
most
most
recent
recent
month
12-months

MAY
96

JUN
96

JUL
96

AUG
96

SEP
96

2,149.8
2,046.9
102.9
5.2

2,181.3
2,057.6
123.7
5.3

2,175.5
2,046.0
129.5
5.2

2,163.7
2,037.7
126.0
5.4

2,174.1
2,041.9
132.2
5.5

0.8
0.1
13.0
12.2

3.0
3.5
-5.1
-8.1

1,858.3
12.4
122.3
197.8
150.8
47.0
91.7
54.8
461.4
97.7
363.7
108.4
545.6
318.7
45.9
272.8
166.6
42.8

1,834.4
12.6
123.2
199.0
151.8
47.2
93.0
55.4
459.9
97.6
362.3
108.8
547.1
290.8
44.5
246.3
137.7
43.1

1,819.5
12.6
124.5
199.2
152.3
46.9
92.9
55.4
458.6
96.8
361.8
108.8
545.8
277.1
44.0
233.1
123.8
42.3

1,838.4
12.6
126.6
199.8
152.8
47.0
93.3
55.6
461.2
97.2
364.0
109.1
547.4
288.4
44.9
243.5
134.8
42.7

1,868.8
12.5
124.8
201.1
153.3
47.8
93.4
55.8
463.7
97.7
366.0
109.2
550.3
313.8
45.2
268.6
160.0
42.9

4.2
0.8
4.8
3.7
4.8
0.4
3.2
3.3
3.3
4.9
2.9
2.2
5.8
4.1
0.9
4.6
4.0
1.9

4.1
1.5
5.2
2.8
3.8
-0.3
1.6
2.4
3.6
4.5
3.4
0.6
5.3
5.2
3.0
5.6
6.0
1.5

16.48
12.59
11.50
16.96
10.67
12.98

16.24
12.57
11.53
16.95
10.82
12.95

16.58
12.63
11.72
18.29
10.78
12.79

17.01
12.69
11.62
18.02
10.62
13.19

17.53
13.04
11.67
18.00
10.84
12.86

5.3
5.0
1.6
7.0
5.1
8.0

2.0
3.3
1.9
2.0
3.5
8.9

3,476,285
2,362,562
471,421
398,475
243,827
168,319
428,391
124,412
43,718
259,746
207,405
625,409
151,389
118,166

3,412,397
2,315,564
462,274
388,080
246,480
172,714
379,603
132,363
62,057
284,217
185,563
678,136
115,339
100,641

3,091,460
2,074,584
443,529
341,539
231,807
167,261
490,668
123,341
60,034
272,866
193,868
655,432
-55,000
81,987

3,197,633
2,208,367
443,979
350,960
194,326
145,128
513,023
131,221
36,415
323,587
202,207
657,027
98,386
84,692

...
...
...
...
...
...
...
...
...
...
...
...
...
...

5.3
5.7
6.9
7.3
-5.1
-14.3
1.3
6.7
3.8
-35.2
9.8
9.3
-38.9
3.4

7.9
7.1
8.4
8.8
15.6
9.1
5.5
11.1
-11.2
2.1
5.7
19.1
-14.0
9.4

763,097
553,566
144,034
65,497

849,394
537,715
198,636
113,043

775,037
514,590
155,279
105,168

849,002
487,463
268,030
93,509

937,307
544,189
338,071
55,047

36.2
18.4
149.7
-41.1

7.2
7.5
10.2
-0.4

4,622
3,930
70
622

4,258
3,574
75
609

4,626
3,665
81
880

3,518
3,329
73
116

...
...
...
...

-31.0
-17.1
-45.9
-87.8

6.2
6.8
-26.8
7.9

1,721
1,332
28
361

1,646
1,259
26
361

...
...
...
...

...
...
...
...

...
...
...
...

11.6
16.9
4.0
-2.2

23.7
27.3
-23.1
18.9

See notes at bottom of Arizona - Quarterly table.
ARIZONA'S ECONOMY

PAGE SEVENTEEN

A R I Z O N A

E C O N O M I C

ARIZONA - QUARTERLY DATA
Demographics & Vital Statistics (000s, seas adj) ADHS & EBR
Population
Natural Increase
Births
Deaths
Net Migration
Personal Income Derivation ($mil, SAAR) EBR
Total Personal Income
Earnings by Place of Work
Less: Contributions for Social Insurance
Plus: Adjustment for Residence
Plus: Dividends, Interest & Rents
Plus: Transfer Payments
Components of Earnings ($mil, SAAR) BEA
Wages and Salaries
Other Labor Income
Proprietor’s Income
Farm
Nonfarm
Per Capita Personal Income ($, SAAR) EBR
Average Wage Per Employee, Annual Rate ($) E
Measures of Financial Institutions
Banks and S&Ls Combined ($mil) ASBD
Assets
Loans
Liabilities
Deposits
Equity Capital
Capital:Asset Ratio (%)

I N D I C A T O R S

% change versus year ago for:
most
most
recent
recent
quarter
4-quarters

III
95

IV
95

I
96

II
96

III
96

4,234.7
9.4
18.6
9.2
24.1

4,267.5
9.4
18.4
9.0
22.7

4,298.7
9.3
18.4
9.1
20.9

4,328.3
8.7
17.7
9.0
20.4

4,357.5
8.9
17.8
9.0
20.2

2.9
-5.7
-4.0
-2.1
-16.2

3.1
-1.1
0.7
2.6
-16.9

88,259
60,888
3,782
285
15,402
15,465

88,948
61,215
3,781
286
15,505
15,723

90,682
62,416
3,871
291
15,717
16,129

92,914
64,177
3,957
297
15,995
16,402

94,547
65,590
4,026
303
16,045
16,635

7.1
7.7
6.5
6.1
4.2
7.6

8.3
8.4
6.3
6.6
7.4
8.4

49,581
5,470
5,902
681
5,221
20,842
27,148

50,210
5,530
6,007
739
5,268
20,843
27,257

51,424
5,594
6,170
811
5,359
21,095
27,479

...
...
...
...
...
21,466
...

...
...
...
...
...
21,698
...

8.7
7.0
6.8
21.8
4.8
4.1
4.9

10.0
9.3
10.7
66.9
5.9
5.0
5.4

36,463
22,340
33,490
30,752
2,974
9.1

38,527
23,303
35,558
32,546
2,969
8.6

39,505
23,735
36,640
32,593
2,865
8.1

39,810
24,161
36,140
32,512
3,670
10.1

...
...
...
...
...
...

9.1
8.0
7.6
3.3
27.5
NA

8.8
8.3
8.3
3.8
13.8
NA

MEASURES OF INFLATION AND PRICES

Consumer Price Index (1982-84=100) ASU & BLS
Metropolitan Phoenix
Western Region (U.S.)
U.S. - All Urban Consumers
U.S. - Urban Wage Earners
Price Indexes (1992=100) BEA
Gross Domestic Product
Personal Consumption Expenditures

% change versus year ago for:
most
most
recent
recent
quarter
4-quarters

III
95

IV
95

I
96

II
96

III
96

160.0
154.1
152.9
150.2

161.3
154.3
153.6
150.9

162.9
156.4
155.0
152.3

168.4
157.5
156.5
153.9

...
158.6
...
...

6.6
2.9
2.8
2.9

5.3
2.5
2.7
2.7

107.9
107.8

108.4
108.3

109.0
108.9

109.6
109.8

110.3
110.5

2.2
2.5

2.2
2.2

MEASURES OF INFLATION AND PRICES - MONTHLY DATA

Consumer Price Index (1982-1984=100) BLS
U.S. - All Urban
U.S. - Wage Earners
Sources and abbreviations:
ADES: Arizona Department of Economic Security
ADHS: Arizona Department of Health Services
ADOR: Arizona Department of Revenue
ADOT: Arizona Department of Transportation
ARMLS: Arizona Regional Multiple Listing Service
ASBD: Arizona State Banking Department
ASPB: Arizona State Parks Board
ASU: Arizona State University, College of Business,
Research Centers
PAGE EIGHTEEN

MAY
96

JUN
96

JUL
96

AUG
96

156.6
154.0

156.7
154.1

157.0
154.3

157.3
154.5

BEA: Bureau of Economic Analysis, U.S. Department
of Commerce
BLS: Bureau of Labor Statistics, U.S. Department of Labor
Census C-40, Bureau of the Census, U.S. Department
of Commerce
EBR: Economic & Business Research Program, The
University of Arizona
F.W. Dodge, Division of McGraw Hill Information Systems
Co. (proprietary data provided by special permission)
NPS: National Park Service, U.S. Department of the Interior

% change versus year ago for:
most
most
recent
recent
month
12-months

SEP
96
...
...

2.9
2.9

2.8
2.7

NSCCC: Nogales-Santa Cruz Chamber of Commerce
PSIA: Phoenix Skyharbor International Airport
SAAR: Seasonally adjusted at annual rates
TAA: Tucson Airport Authority
TAR: Tucson Association of Realtors
USINS: U.S. Immigration & Naturalization Service,
U.S. Department of Justice
U.S. Bankruptcy Court, District of Arizona
USCS: U.S. Customs Service, U.S. Department of the Treasury

ARIZONA'S ECONOMY

A R I Z O N A

E C O N O M I C

APR
96

I N D I C A T O R S

MAY
96

JUN
96

JUL
96

AUG
96

% change versus year ago for:
most
most
recent
recent
month
12-months

TRAVEL AND TOURISM
Visits to Parks & Other Recreational Areas, ADOT, NPS & ASPB
Northern Arizona
Historical
Scenic
Water Based Recreation
Southern Arizona
Historical
Scenic
Water Based Recreation

1,910,668
239,208
554,570
1,116,890
366,298
63,224
249,511
53,563

2,015,206
202,727
686,401
1,126,078
238,392
40,641
149,070
48,681

2,512,026
210,415
807,901
1,493,710
167,712
34,189
99,996
33,527

2,793,180
211,403
969,857
1,611,920
177,363
41,886
87,853
47,624

2,543,342
209,966
828,292
1,505,084
149,024
26,061
86,272
36,691

-17.9
-4.0
-24.0
-15.8
-2.0
-13.1
-2.9
10.4

-3.8
-1.2
-7.8
-2.1
-8.4
-5.4
-10.9
-0.2

International Border Crossings, USINS & USCS
U.S. Citizens
Aliens
Vehicles

690,713
1,900,204
734,980

706,067
1,933,417
780,917

693,274
1,890,113
714,819

588,032
1,548,887
...

609,724
1,497,677
...

-6.8
-16.3
-1.5

-4.2
-1.5
-7.2

See notes at bottom of Arizona - Quarterly table.

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ARIZONA'S ECONOMY

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520-621-2155
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& FISCAL ANALYSIS....................ALBERTA CHARNEY
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PAGE NINETEEN