Phoenix Leads US Job Growth in Second Quarter

Phoenix has one of the fastest growing job markets in the country. In fact, the market has led US job growth for the last three years, and from May 2018 to May 2019 the market gained 66,500 new jobs. The strong job growth has translated into a vibrant office market with 29 consecutive quarters of positive net absorption and a declining vacancy rate. According to a report from Colliers International, the second quarter closed with 96,000 square feet of positive net absorption.

“By almost every growth metric, from population to incomes and education to jobs, the Phoenix MSA is either at the top, or in the least within the top five in the nation,” Thomas Brophy, research director at Colliers International in Arizona, tells GlobeSt.com. In addition to that, Greater Phoenix Economic Council led by Chris Camacho, Arizona Commerce Authority and the various municipal economic developers across Valley area cities have done an excellent job in marketing the Phoenix area as the place where businesses, and people, want to be.”

Arizona has also reaped the benefits of positioning itself as a business-friendly state, and Phoenix’s local government has helped to support business expansion. That has helped the market gain companies exiting other more expensive markets. “Not only do we have excellent cheerleaders, we also benefit from state/local governments that encourage entrepreneurship, remove red tape and actually work with companies to help them expand,” says Brophy. “We attract attention from throughout the country, especially from companies in California and other Western seaboard areas.”

Still early in its recovery cycle, Phoenix should continue to see strong job growth, which will in turn drive many asset classes in the market. Many signs of future growth are already in the works. “Some of the major announcements we have seen over the last year: Nationwide’s purchase of state land in North Scottsdale for its regional HQ set to open in late 2020 and employing 2,000-plus people; State Farm is continuing to ramp up its operations at Tempe Town Lake and hiring 1,100-plus this year; Waymo, Google’s autonomous vehicle affiliate, continues expanding; Intel is nearing completion of Fab-42 and hiring 3,000-plus engineers (think about necessary support operations); Microsoft will be expanding in the West Valley; Google is expanding its data center operations in East Mesa and the list goes on and on,” says Brophy.

This level of job growth and expansion should continue to be a theme in the market. “Barring a major external shock, such as greater escalation of trade wars, war with Iran, etc., Phoenix and the nation as a whole are poised for continued job growth for the remainder of 2019,” says Brophy. “My on-the-ground perspective shows a robust amount of employer inquiries looking for space in our market to either consolidate operations or expand in the market.”