The Phoenix metropolitan area added 57,600 jobs over the past 12 months ending in August, growing 2.7%.
On a percentage basis, Phoenix ranked fourth among all large U.S. markets. While employment growth is comparably robust, momentum has slowed – employment climbed 3.7% last year.
Of the 11 employment sectors, 10 recorded job gains with only the information sector posting a net loss over the year. Education and health services led job gains, with the creation of 14,100 jobs. The construction sector followed, adding 11,000 workers. A rise in homebuilding, industrial and office construction has bolstered the sector. Yet despite the growth, the Valley has yet to recover all the construction jobs that were lost during the recession. It will take some time for the construction sector to reach previous peak employment, if it ever does. The metro area’s growth model has transitioned from oversupply to sustainable levels of new construction.
For example, pre-recession construction employment was bolstered by the 60,000 single-family and multifamily starts in 2004. Today, that number has moderated to less than 30,000 starts, creating less demand for construction labor.
Growth in office-using employment, which is a combination of the professional and business services; financial activities; and information sectors, was lackluster. Gains were hindered by job losses in the information sector. This segment grew less than 1% and added 7,000 jobs over the past 12 months. Several job announcements this year should support this segment over the next few years. This includes recent expansion announcements by Allstate, Voya, Wage Works and Nationwide Insurance.
The trade, transportation and utilities; and manufacturing sectors, typical industrial space-users, achieved healthy job gains. Combined, the two sectors added 16,800 jobs. Employment growth, in addition to strong population growth, will stimulate demand for industrial space.
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