Phoenix hiring outstrips Bay Area hiring by 56% in June

Companies in the Phoenix metro hired 61,400 new employees during June 2018 compared to 2017. During the same period the combined San Francisco-Silicon Valley metro areas added 39,300 new hires.

If there is any question of how the economics of business in California are impacting its job growth, the June hiring numbers lay bare the difference between Arizona and California. Data from the U.S. Bureau of Labor Statistics, which provide the underlying data for Arizona job numbers, says California added 89,100 jobs in June to its 17.1 million person workforce, compared with Arizona’s addition of 70,700 to its 2.7 million person workforce.

The Phoenix-Mesa-Scottsdale metro nearly captured 90 percent of all new jobs created in Arizona. The state saw its unemployment rate hold steady at 4.7 percent compared to May 2018 and June 2017. The Valley logged an unemployment rate of 4.2 percent compared to 4.4 percent last June. California is also at 4.2 percent. This according to data from the Arizona Office of Economic Opportunity.

The Valley’s workforce nearly hit 2.06 million, up from 1.99 million a year earlier. Notably, much of the overall jobs growth is taking place in high-wage industry sectors. New BLS data show more quality jobs, higher wages, and lower unemployment rates in Arizona; all promising indicators for the future, and a trend Arizona leaders want to continue.

“California has an uncompetitive economic development structure, but they have high value, highly skilled tech workers; that’s why this area grows there,” said Jim Rounds, president, Rounds Consulting Group. “I wouldn’t compare Phoenix to San Francisco. We’re more an improving community based on a high volume of diverse jobs. But it’s important that our job growth is in industries paying higher wages.”

While California’s hiring grew 1.6 percent in June, Arizona jumped 3.0 percent in private sector hiring. Government employment dipped in both states. The Phoenix metro hiring increased 3.1 percent.

The technology hiring is driving increases in other industries, according to Scott Anderson, chief economist with Bank of the West, in an interview with the East Bay Times.

Valley advanced business services, financial services and technology companies increased workforce by 15,000 jobs over June 2017. The average individual wage, according to the U.S. Bureau of Labor Statistics (BLS) May 2018 data, topped $60,000 in these sectors.

Chris Camacho, president and CEO of Greater Phoenix Economic Council, sees this trend continuing.

“We have more than 300 companies looking at Phoenix,” he said. “The quality and diversity of the workforce is seen by companies as a good place to land. Companies sited here for a while are scaling up hires in Phoenix as opposed to California.”

Overall, advanced industries still represent about 60 percent of the metro workforce, compared to 58 percent last June and 48.5 percent in October 2007, the highest employment month before the Great Recession.

Private education and health services added 14,800 jobs year-over-year, with nearly 10,000 in the health care, bio and life sciences sectors. These are in addition to the 6,000 new professional, scientific and technology jobs added to the Phoenix market. BLS says jobs in these sectors have average wages over $90,000 per year for the metro.

In the San Francisco-Silicon Valley area, the two metros saw most of the jobs in high wage, technology jobs. In the Phoenix metro the jobs are more diverse with gains across a number of important advanced industry sectors.

Manufacturing gained 7,600 jobs over 2017, the 16th consecutive month of employment gains for Phoenix area companies, despite manufacturing job losses in most metro areas. Local manufacturers have posted job gains in 19 of the last 20 months.

Construction hiring in the metro was also significant, up 10 percent over 2017 by adding 14,600 jobs in year-over-year comparisons; 4,500 in June alone. More than half, 7,500 of the jobs, were in specialty trades.

“These numbers are very encouraging,” Arizona Chamber of Commerce and Industry President and CEO Glenn Hamer said. “The Arizona economy is strong, but let’s remember there are potential threats on the horizon, including a trade war and ballot initiatives in the fall that could do tremendous damage to our ability to maintain such a strong jobs picture.”

Despite heading into the summer slow season, the leisure and hospitality sector added 8,900 jobs. Dining and drinking establishments added 11,500 jobs compared to last year, but arts, entertainment and recreation shed 2,600 jobs to drop the net gains.

Government was the only other sector to reduce workforce, dropping 700 employees in June 2017 over 2016.