Metro Tucson ended 2017 with a job growth of a scant 0.5 percent – about 1,900 jobs — the Arizona Office of Economic Opportunity reported Thursday.
But the region added 2,600 jobs (0.7 percent) in December, which ranked it the second-highest in Arizona behind Yuma for the monthly rate of growth. Typically, those are seasonal jobs such as health, retail and transportation workers.
Those numbers are likely to change after the state office revises them this month to correlate with more concrete federal employment numbers. Results will be released in March.
For most of 2017, metro Tucson fell at or near the bottom of Arizona’s seven major metro areas for job growth. It appeared at times that the area would end the year with a net loss.
Metro Tucson has been getting inconsistent economic news in recent months. Southern Arizona bankruptcies rose from 2016 to 2017 – the first increase in a decade. But the median price of a single-family home increased 14.5 percent over the year. And Insurance giant GEICO announced this month that it will add 700 jobs to the 2,100 it already has in metro Tucson.
Arizona’s unemployment rate rose to 4.5 percent from 4.3 percent between November and December. Tucson’s rate also rose, to 4.2 percent from 4 percent. The U.S. rate remained unchanged at 4.1 percent.
Arizona added 42,500 jobs (1.5 percent) over the year, with the majority of those, 37,600 (1.8 percent) in the Phoenix area. The construction, manufacturing and leisure and hospitality (bars, restaurants and hotels) sectors are doing exceptionally well while retail, electronic manufacturing and mining are not.
The most dramatic fact reported Thursday is the sharp decline in Arizona retail workers, a trend that began three years ago. Typically, the sector that includes retail, transportation and utility workers, gained 4,600 workers statewide from November to December during the post-recession period of 2010 through 2016. That sector only added 500 workers in December 2017.
Doug Walls, research administrator for the state office, attributed that to competition from e-commerce and also said it also could be timing. E-commerce businesses may have done their seasonal hiring earlier. “We’re not able to pinpoint why this is occurring,” he said of the severe December drop in retail workers.
While e-commerce is shrinking the number of traditional retail workers, it is clearly increasing the number of people working in warehouses and delivering all those packages ordered online. Arizona added 2,600 warehouse and transportation jobs last year.
Tucson ended the year with 1,000 fewer retail workers and 600 more warehouse and transportation employees.
The rise in bankruptcies throughout Southern Arizona last year indicates that a lot of businesses and individuals were hurting, perhaps because of a decline in Mexican shoppers. Housing values rose. The job numbers indicate that the businesses in metro Tucson doing most of the hiring were restaurants and bars.
Southern Arizona bankruptcies rose from 2016 to 2017 for the first time since 2010, according to the U.S. Bankruptcy Court. But although they grew almost 9 percent to 3,739, they remain well below the 8,185 filed in 2010.
Seventy-six percent of the 2017 bankruptcies were Chapter 7s, where assets of an individual or company are liquidated. Those inceased 5 percent to 2,840 in the Tucson Division, which covers Pima, Cochise, Pinal, Greenlee, Graham and Santa Cruz counties.
Another 31 percent (865) of the 2017 bankruptcies were Chapter 13, where individuals restructure their debts.
But Tucson’s real estate improved over the year, according to the Multiple Listing Service of Southern Arizona and Tucson Association of Realtors.
The median sales price in December was $205,000 – a 14.5 percent increase from a year earlier. New listings in December were 12 percent higher than a year before.
Homes also became more expensive, with the average list price rising 9 percent over the year (December to December) to $255,058.
Most of the jobs Tucson gained last year were service jobs, particularly food service and drinking places (1,200) and professional and business services (600). Natural resources and mining ended with no gains or losses, while aerospace product manufacturing added 500 jobs.
Good, bad and ugly
Walls highlighted two sectors that are enjoying atypical job growth: construction and manufacturing.
The construction sector added 8,500 (6.3 percent) workers statewide last year, and Walls attributed that to highway construction and population growth that stimulated a new for more houses and apartments.
Arizona’s 2017 population growth rate (1.6 percent) was the sixth fastest rate in the U.S. The rate has been steadily increasing over the past seven years.
Arizona continued to add manufacturing jobs at a higher pace (3.5 percent) than the nation (1.6 percent), mostly in durable goods. It added 5,600 workers last year. Unfortunately, computer and electronics parts makers ended up with 800 fewer workers statewide.
But mining and natural resources, a sector of particular interest to Southern Arizona, also ended up with 300 fewer workers. Heavy ore mining had an estimated 8,600 employees at the end of the year.