Revised outlook for 2014 calls for 59,000 new jobs across Arizona
Overall, the report said, the U.S. has regained 78 percent of the jobs lost since the prerecession peak. Arizona has only seen 47 percent of the jobs lost come back, but "the fundamentals of Arizona's economy continue to show signs of growth," it said.
The report, released Thursday, indicated that growth would be slightly higher than had been predicted by a May forecast.
Job growth will be led by the professional and business services sector, which is forecast to add 32,400 jobs in both 2013 and 2014. In total, that sector including temporary workers and consultants was the fourth-largest portion of all jobs in Arizona in 2012.
The report said 2.57 million Arizonans will have jobs that aren't farm-related at the end of 2014, up from 2.39 million in 2010. Population growth is forecast to continue in 2014 at a rate of 1.2 percent, the same as the previous year and up from 0.2 percent in 2010.
Aruna Murthy, the state's director of economic analysis, said job growth could be curtailed by federal budget cuts, economic uncertainty and a possible drop in demand for residential real estate following rising interest rates.
"Most of these sectors, 2014 looks better than 2013," she said. "There are some where it's a little higher than others, but in general it's a better year in the number of jobs overall."
The report said that Arizona will add 48,500 jobs in 2013.
Murthy said spending cuts by federal and state governments could restrict growth, as could weak consumer demand.
"There are lots of good things happening, but things could change at any time, so there's no certainty," Murthy said. "Despite the unemployment rate dropping and improvement in the overall employment situation, we still have constrained household budgets, there is still employment insecurity, the wages are still low, the debt is high and the essential cost of living is going up."
Dennis Hoffman, an economist at Arizona State University's W.P. Carey School of Business, said shrinking consumer demand among baby boomers could remain a headwind.
"The economy needs consumers ready and willing to step up to the plate to purchase products," he said. "There's still a lot of that going on, but it's just not going on at near the frenzied pace of of the last several decades. And that's just the aging of the baby boomers."
Hoffman said government could help by making infrastructure investments to help the economy move forward.
"That's the kind of thing you want to go into debt to do," he said. "Borrow to make strategic investments to yield benefits that you pay for over the life of the infrastructure."
John Mathis, global finance professor at the Thunderbird School of Global Management, said that growth in the national gross domestic product will build new jobs in Arizona.
"The U.S. economy doesn't look terribly bright, but growing in the 2-2.5 percent real GDP range, that will spill over into Arizona," he said. "It will help the Arizona economy because we could benefit from a lot of tourism, conventions and conferences and people moving into homes for retirement or whatever."
Mathis said that the jobs forecast may be slightly conservative.
"Export growth has been growing very rapidly as U.S. has become more competitive globally," he said. "That creates a lot more jobs in Arizona, and they tend to be higher paid jobs than normal."
Trade, transportation and utilities jobs will grow only modestly, from nearly 58,000 jobs in 2012 to just over 60,000 in 2014, according to the forecast.
The report predicted that leisure and hospitality jobs will surpass the 2007 peak by the end of the year, led by the food and beverage service subsector. The report predicted that the sector overall will add 7,600 jobs in 2014, growing to over 280,000 jobs total.