(Phoenix, AZ) – The Research Administration (RA) of the Arizona Department of Commerce projects a continued loss of nonfarm jobs for the 2009 through 2010 forecast time period with a decrease of 195,800 jobs, or a loss of 7.5 percent. Projected job losses for 2009 have increased by 32,300 from the April Forecast of 146,000, while the projected losses in 2010 have decreased by 4,200 as the result of a gradually improving economy. The updated projected rate of loss for Arizona in 2009 is 6.8% and 0.7% for 2010.
“Arizona families and its economy are impacted daily by layoffs by companies,” said Governor Jan Brewer. “I have stood strong that dramatic action is necessary to sustain and strengthen the economy - a problem that requires a multi-year fix. I will not abandon the people of Arizona, and we will do what is right to secure the future of Arizona. ”
IHS Global Insight, a major economics forecasting and consulting firm based in Waltham, Mass., projects that national nonfarm employment will have a slower rate of job loss of 3.7% in 2009 and 0.5% in 2010.
“Projected Arizona nonfarm job losses increased in this Forecast Update because the first eight months of 2009 have shown greater losses than earlier forecast,” noted Jack York, an economist with the Arizona Department of Commerce. “As of August 2009, the annual, average, over-the-year nonfarm job losses numbered 183,200 – that is 37,000 more than expected in April.”
As Arizona’s economy starts to recover, Commerce projects nonfarm job growth will begin by the end of 2010 based on the following factors:
• Federal government economic stimulus spending is projected to boost the state’s economy in the areas of infrastructure for energy, transportation, health care and education.
• Federal government expenditures are expected to be maintained for border security, rural area firefighting, military bases, and private sector contracting for civilian and military purposes.
• Federal monetary policy is encouraging lending through low interest rates and the injection of liquidity into financial institutions.
• A buildup in the inventory cycle is anticipated as businesses and consumers increase spending to replenish depleted inventories and buy essential and other goods such as cars, clothing and household appliances.
• Stable prices for many goods are expected to motivate some increased level of purchasing.
Recent trends have shown increasing stabilization in the U.S. and global economies. These include increased orders for manufactured goods; a rise in the overall capacity utilization rate; an uptick of national housing starts and sales; a greater willingness to lend in financial institutions; and a leveling of world trade. Recently, the economies of major U.S. trading partners, including China, France and Germany, have shown economic growth. As a result, U.S. export figures have increased.
In conclusion, employment in Arizona is projected to show a gradual improvement with slowing nonfarm job losses over the period 2009-10. Educational and Health Services is the only sector expected to see job gains for both 2009 and 2010 (+6,500 total). Construction is expected to see the greatest number of job losses (-61,400), at the most rapid rate (-32.7%).