City Spotlight: Phoenix

October 9, 2019
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Author: ThinkWhy Analyst

Phoenix is one of the sunniest areas in the U.S., which is exactly why the area is nicknamed the Valley of the Sun. About 22 million people visit every year, and more than 1.6 million call the city home, making Phoenix the fifth largest metro area in the nation.

Phoenix, Arizona Economy Strong in Most Industries

Job Outlook: Moderate

While the unemployment rate in Phoenix sits at 4.7 percent (above the U.S. national average of 3.5 percent), total nonfarm job growth increased 2.7 percent. The industries with the top job growth rates are:

  • Construction (8.7 percent increase)
  • Manufacturing (6.3 percent increase)
  • Education and health services (4.3 percent increase)

Phoenix is home to companies like Avnet, Freeport-McMoRan, US Airways, Republic Services and PetSmart. For Phoenix, the largest job vacancies are in the key industries of construction, cyber security, financial services and hospital healthcare. Hospital healthcare demand is driven largely by the area’s growing older population.

Like major metros around the nation, Phoenix employers continue to struggle to fill open positions. For example, by 2022, Arizona is forecasted to have 155,000 vacant construction industry jobs. By 2025, the city will also have approximately 28,000 open nursing positions. Improving net migration to the area will likely help fill some of these, so long as they have the necessary skills.

Wages

Total compensation costs for private industry workers increased 3.4 percent in the Phoenix metropolitan area for the year ending June 2019. Locally, wages and salaries, the largest component of compensation costs, advanced at a 3.8-percent pace for the 12-month period ending June 2019. With both total compensation and wage growth above national averages, employment costs on the forefront of Phoenix business owners’ minds.

Scottsdale Shines

Scottsdale, a popular suburb of the greater Phoenix area, has enjoyed recognition as the best city to find a job in 2019. With a strong job market, high socioeconomic ranking and escalating property values, Scottsdale is a strong area for recruitment across all industries. Companies in Scottsdale may see employees drawn into this area with the increased attention.

Living in Phoenix

The median sales price for a single-family home in Phoenix is $272,700, which is less than other similarly sized cities. However, home prices have appreciated by more than 107 percent from 2000 to 2018, a sign of economic growth. For renters, monthly rates are still below the national average. These factors contribute to a lower cost of living driving talent to relocate to the area.

Phoenix is also a haven for outdoor enthusiasts and sports aficionados. There are six lakes around the city and 200 golf courses. In addition to a NASCAR raceway, the city is home to beloved teams across all four major professional sports leagues. Here, you’ll find the Phoenix Suns, the Arizona Cardinals and the Arizona Diamondbacks among others. Companies looking to attract talent to the city will have a great deal to offer when ensuring employees reach their happy factor.

Phoenix Key Takeaways

  • Employees will continue to come to Phoenix for opportunity, but they are likely to stay for the lifestyle.
  • Older and retired residents will continue to feed the area’s economy. Companies that serve this demographic should see revenue success.
  • With abundant housing, average cost of living and attractive amenities, business opportunities should remain strong.
  • Employee availability will depend on industry. Expect continued shortage in construction and health care. This will drive wages up in these two industries.