Weighted down by the real estate market, Arizona’s economy grew
only 0.7 percent between 2009 and 2010.
Only Nevada and Wyoming fared worse.
The new report Tuesday by the U.S. Bureau of Economic Analysis
put the total Arizona gross domestic product for 2010 at $228.5
billion. That compares with $226.8 billion in 2009.
But that increase, no matter how small, is a great improvement
from the year before when Arizona actually posted a 5.7 percent
loss in state GDP, landing ahead of only Nevada.
The figure is calculated as the sum of what consumers,
businesses and government spend on goods and services, plus
investments and net foreign trade.
Tom Rex, an economist at the W.P. Carey School of Business at
Arizona State University, said he was not surprised by the
figures.
“The economic recovery in Arizona is very slow,” he said. “So
much of that is due to the magnitude of the real estate crash that
we continue to experience here. There were only a handful of states
that had as big a boom and bust in both real estate and
construction as we had.”
The numbers back that up.
According to the BEA, construction spending actually decreased
between 2009 and 2010.
“We’re overbuilt in all sectors,” Rex said. “So our new
construction really plummeted in the recession because we have such
an oversupply.”
The same is true of the real estate rental and leasing sector
which also saw an absolute decline in the amount of money changing
hands in Arizona.
But other segments of the economy helped to offset those
losses.
“Durables manufacturing had a big gain,” Rex said, though it
still was not as large as the nationwide figure. “Most durables
manufacturing is highly cyclical and comes back quickly at the end
of a recession.”
Where the state did fare better than the national average was
its mining industry. While only a relatively small portion of the
economy – fewer than 10,000 jobs – the value of sales was bolstered
by the high price of the copper mined and refined here.
Arizona also beat the national average with spending increases
in health care. In fact, that is the one sector of the state’s
economy where employment has grown since the recession.
The new numbers also put the state’s per capita gross domestic
product at $35,745. That is 84 percent of the national average and
puts the state 13th from the bottom of the list.
But Rex said only part of that can be attributed to the fact
that Arizona, in comparison to many other states, has a lower
percentage of high-wage jobs. Some of it, he said, is just a matter
of how the math is done.
“We have an awful lot of people who aren’t working, whether they
be retirees or they be children,” he explained. “Any time you go to
a per capita type of measure, we don’t look all that good.”
That per capital GDP number also has increased only 3 percent in
the last decade in Arizona, compared to nearly 6.7 percent
nationwide.
Article source: http://www.eastvalleytribune.com/arizona/article_71bb8d1e-915e-11e0-b46f-001cc4c03286.html