CoStar Market Insights: Phoenix Remains a Top-10 Market Across All Sectors Due to Robust Employment Growth
Employment growth in Phoenix was the second-highest among all U.S. metro areas in June. Phoenix’s ability to sustain positive employment gains is due to robust migration of talent that continues to expand the local labor pool.
Employment in the Phoenix metro area increased by 3.3% over the past 12 months, with the addition of 68,400 jobs. Employment gains were broad-based; 10 out of the 11 employment sectors added new positions, led by the education and health services sector with 20,600 workers. This was followed by construction (13,200 jobs) and trade, transportation and utilities (10,700 jobs).
The office-using sector — a combination of the professional and business services, financial activities and information industries — added 11,200 jobs. This marks a 1.9% increase, down from the 3.3% growth recorded one year earlier. While job growth slows nationally, Phoenix maintains its position as a top-10 market for office-employment growth.
Steady employment growth is stimulating robust demand across commercial properties and bolstering its position among all major U.S. markets. In terms of net absorption over the past 12 months, the metro area ranks seventh for office, sixth for industrial and ninth for multifamily demand.
While employment growth is expected to lose some steam over the next few years alongside the expected U.S. economic slowdown, the metro area still has some runway of healthy employment gains. Sustained job growth will continue to drive demand for commercial properties, benefitting landlords and keeping developers busy.
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