The Great Recession had devastating effects across the U.S. and few places were as hard hit as Arizona. The state was booming on the strength of its tourism and real estate markets during the 2000s. Median home prices jumped 70% between 2003 and 2006—only Nevada had bigger gains—fueling more building and construction jobs. Monthly unemployment was at 3.5% through much of 2007. But then the bottom fell out. Home prices plummeted more than 50% from their peak and 6% Arizona properties received foreclosure filings in 2009. Unemployment stubbornly remained in double-figures for most of 2009 and 2010 and only Nevada lost a higher percentage of jobs over the last five years. Household incomes declined at the fastest rate in the country since 2008.
But the economic picture has brightened considerably in Arizona, as the housing market stabilized and unemployment hit a post-recession low of 7.8% in May. As part of Forbes' annual Best States for Business, we look at 35 factors to determine the best and worst states, including projected employment. Arizona is expected to have the fastest job growth at 3% annually over the next five years, according to Moody's Analytics. The job gains are projected to boost household incomes 3.6% annually through 2017, which ranks second best in the U.S. after Illinois. The added jobs also go hand-in-hand with the state's economic growth, which Moody's forecasts to expand at a U.S.-best 4.6% annually.
The big winners over the past year in Arizona were the construction and leisure/hospitality industries, which both added more than 10,000 jobs. Other fast-growing sectors include business services, financial activities and education and health services.
In addition to a large, educated workforce to choose from, companies are also attracted to Arizona's pro-business regulatory climate, which ranks No. 13 in the Mercatus Center's Freedom in the 50 States. The study cites Arizona's right-to-work law, liability laws and eminent domain reform.
In Pictures: The Best States For Future Job Growth
Complete Coverage: The Best States For Business
Domain name registrar GoDaddy, which is based in Scottsdale, Ariz., broke ground in May on its new Global Technology Center in Tempe. GoDaddy already employs 2,600 people in the Greater Phoenix area and the new facility is expected to add 300 more. Other companies expanding in Arizona include Asurion, a leader in technology protection services. They opened a new technical support center in Phoenix and want to fill 500 jobs by the end of the year. Energy provider Direct Energy opened a new call center in Tempe this year and is looking to fill as many as 300 openings.
Texas was one of the first states to emerge from the recession and it continues to attract companies on the basis of its low tax burden, predictable regulatory environment and skilled labor force. Texas employment is expected to expand 3% annually through 2017, according to Moody's. (Arizona's forecasted rate is a microscopic 0.04% better). Texas has attracted a lot of attention from California companies and Governor Rick Perry has not been shy about contrasting the business climates of the two states. California firms EBay and Electronic Arts have both chosen Texas for large expansions in recent years. Austin has been a hotbed of activity this year with
Western states dominate the best states for projected job growth. Only two, Florida and Georgia, of the top 10 are located east of the Mississippi River. Rounding out the top five are Colorado (2.6% annual projected growth), North Dakota (2.5%) and Florida (2.5%).
In Pictures: The Best States For Future Job Growth
Complete Coverage: The Best States For Business
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