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Jobs Report Showing Signs of Growth

According to the latest Arizona Workforce Employment Report released last month, the percentage of unemployed Arizonans dropped from 9.3 percent in April to 9.1 percent in May – the third consecutive decrease since February, and one that brings Arizona’s unemployment in line with the rest of the nation’s.

Despite the continued drop in unemployed Arizonans, Ronald Gunderson, a professor of economics at NAU, said the state – along with the rest of the nation – has a long path out of the recession.

“Arizona continues its slow recovery from the downturn of the past several years,” Gunderson said. “Private sector employment is slowly climbing, and the state’s unemployment rate fell to 9.1 percent in May – down from 10 percent the previous May. However, this rate is still much too high in terms of providing sufficient amounts of job opportunities for all who are seeking employment in Arizona.”

While the increase in jobs over the last year is an encouraging sign for the state economy, Gunderson says it pales in comparison to where Arizona was before the start of the recession.

“Over the past 12 months, Arizona has gained about 4,000 jobs,” Gunderson said. “However, in its best years, the Arizona economy added 100,000 new jobs a year. Therefore, the only positive spin on the news that 4,000 new jobs were created this past year is that employment levels in the state no longer continue to fall. Some sectors have added quite a few jobs while other sectors continue to suffer employment losses.”

Carol Curtis, the director of the Coconino County Career Center, says the county and Flagstaff have weathered job losses better than its peer counties and cities.

“In Coconino County… our unemployment rates have been high – over eight percent – but they’ve been the best in the state,” Curtis said. “And the city of Flagstaff has fared phenomenally, with good unemployment and employment rates.”

Part of the reason the county has not felt the full effects of unemployment like the rest of the state is because of the large state employer in Flagstaff, Curtis said.

“Government’s the largest sector, and the university is the largest employer,” Curtis said.

Julie Pastrick, the president and CEO of the Flagstaff Chamber of Commerce, said NAU’s role in the local economy goes far beyond its status as an employer.

“NAU is undoubtedly a huge economic engine for Flagstaff,” Pastrick said. “Its employment base ranks it in the top three employers and the student population – upwards of 17,000 – creates a large customer base for a diverse array of Flagstaff local businesses.”

While NAU and government employment anchors the Flagstaff economy, parts of the private sector have been able to find success in the economic downturn. Pastrick says Northern Arizona’s manufacturing sector is surviving because of the necessary products made in Flagstaff.

“Our manufacturing sector is faring better than in other areas of the country, mostly because the products made are viewed as essential,” Pastrick said. “For example, during hard times, most Americans continue to nurture and be nurtured by their pets. Consequently, Nestle Purina PetCare is doing well and continues to grow. Medical devices and dental products are increasingly essential within our growing and aging populace, putting W.L. Gore in a sustained growth mode that outpaces other major industries.”

Curtis said a new source of employment in Flagstaff comes from high-tech startups grown within the Northern Arizona Center for Entrepreneurship and Technology (NACET).

“Certainly science and technology, those sectors,” Curtis said. “We are familiar with businesses in the Flagstaff community who are anticipating the addition of jobs. The job creation that is occurring through the companies and their affiliates coming out of NACET, the business incubator, last year created over 103 jobs. So, we are seeing growth — that’s definitely a good sign. And it’s in sectors that help to diversify our economy. We have very traditional drivers, such as tourism and government, but we’re beginning to see areas of growth in innovation and technology, sciences and biosciences.”

However, Pastrick echoes Professor Gunderson’s concerns about the severity of the recession. She says it would take several years for some jobs to return to the state, if they return at all.

“There has been a paradigm shift in the private and the public sector during this recession, and job loss has never been this serious,” Pastrick said. “Consequently, the recovery time to fill lost jobs or create new ones is anticipated to be many years into our future. In the past, recessions have been minor compared to what we have experienced in Arizona and recovering lost jobs has been possible throughout the course of the next year. Not so today – not only have we lost jobs, but businesses and public entities have restructured through layoffs and underemployment, creating a scenario [in which] many jobs might not ever be refilled.”

Yet, Pastrick expressed optimism for the state and the city of Flagstaff in coming years. “The Flagstaff economy continues to move along, despite the many economic hurdles facing the state of Arizona,” Pastrick said. “The summer tourism season is upon us, and we’re hopeful for a strong season of visitation.” FBN

 

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