Economy

The size and growth of Arizona’s economy always are items of interest. In most years, Arizona has been at or near the top of the states in growth rate on measures such as gross product or employment. This was not the case during the long and deep recession from 2007 through 2009, or in the slow recovery that has occurred since the end of the recession, but Arizona’s aggregate economic growth in the next few years is expected to once again exceed the national rate.

However, the aggregate growth rate of an economy is unrelated to the region’s productivity and prosperity or to changes in its productivity and prosperity. High and rising productivity leads to high and rising prosperity. Measured by gross product per employee or earnings per employee, Arizona’s productivity is further below the national average than in the past. On all indicators of individual prosperity, such as per capita personal income and average wage, Arizona is below the national average—and generally has lost ground over time. Individual prosperity, sometimes referred to as economic well-being, is the ultimate goal to which communities strive.

The industrial composition in Arizona is diverse, moderately different than the national average. Relative to the nation, the industrial mix in Arizona features a somewhat higher share of lower-wage industries and a somewhat lower share of higher-wage industries. The occupational mix is slightly tilted toward lower-wage occupations.