Arizona Ends Year on Strong Income and Population Growth

Article originally posted on Phoenix Business Journal on December 21, 2016

Arizona’s population is poised to top 7 million people next year, based on average and highest growth rates since 2010, according to the U.S. Census Bureau.  Arizona ranked 8th in 2016 population growth by percentage over 2015.

Added to that estimate, the Bureau of Economic Analysis reports personal income in Arizona increased 1 percent in the third quarter this year over the second quarter.

 

The 1.7 percent population increase for 2016 over 2015 makes the state the eighth fastest-growing state in terms of percentage growth. In terms of the number of new residents, Arizona ranked fifth nationally, adding 114,000 newbies and taking the population to 6.9 million, compared to 6.8 million in 2015 and 6.4 million in 2010.

The Intermountain West and Pacific Rim states snagged eight of the top 10 growth positions in percentage growth and six of the top 10 states for number of new residents.

Arizona ranked No. 20 for personal income growth over last year gaining 3.8 percent in the last 12 months. In terms of wages, BEA said workers in the state gained 1.2 percent over the second quarter, just shy of the U.S. 1.3 percent wage gain in the same three-month period. Income from dividends, interest and rent, and transfer receipts both grew less than 1 percent in the same period.

Five of the top 10 personal income-growth states were in the West with gains of 4.2 percent and more.

Population growth

Even with 7 million 2017 residents, Arizona will still rank 14th in the nation in population. The Census data project to show that among the 20 most populous states, only Illinois will drop one slot to sixth, with Pennsylvania moving into the fifth position next year.

The District of Columbia (12.6 percent) and North Dakota (12.4 percent) had the fastest-growing populations in terms of percent increase between 2010 and 2016. Texas, Utah, Colorado, Florida and Nevada all grew faster than Arizona during that period, but less than 1.5 percent separates Arizona from Texas.

Personal income

Personal income growth slowed nationally from 1.2 percent in the second quarter over the first quarter, and Arizona dropped from 1.5 percent growth in the second quarter.

The advanced industry sectors saw the highest increases in earnings growth in the third quarter over the second quarter. Management wages rose 4 percent. Education wages rose 2.9 percent in the quarters. Financial services and business services were up 2.5 percent. Leisure and hospitality wages was up 2.3 percent.

The largest earnings declines were in forestry and resources, mining and agriculture. Ironically, information services had the largest reported wage decline, 4.8 percent.

For Arizona, the important news is that net earnings, the personal income generated by wages and salaries, rose more than overall personal income that includes interest, dividends, rent and transfer receipts. Arizona wages moved up 1.2 percent in the third quarter over the second quarter, just shy of the 1.3 percent U.S. average. Arizona fared better than California (1.1 percent), Nevada (1 percent) and Washington (0.7 percent), but not as strong as Colorado (1.6 percent), Utah (1.7 percent) and Texas (1.3 percent).

Percent change in personal income 3Q over 2Q 2016 — Arizona

  1. Management of companies and enterprises — 4.01
  2. Educational services — 2.84
  3. Finance and insurance — 2.51
  4. Accommodation and food services — 2.32
  5. Military — 2.27
  6. Arts, entertain-ment, and recreation — 2.08
  7. Wholesale trade — 1.68
  8. Professional, scientific, and technical services — 1.67
  9. Construction — 1.62
  10. Health care and social assistance — 1.57
  11. Administrative and waste management services — 1.44
  12. Total earnings — 1.17
  13. Federal, civilian — 1.06
  14. Durable goods — 0.88
  15. Other services (except public administration) — 0.81
  16. Transportation and warehousing — 0.80
  17. Utilities — 0.71
  18. Retail trade — 0.70
  19. Nondurable goods — 0.65
  20. State and local — 0.65
  21. Real estate and rental and leasing — -0.10
  22. Mining, quarrying, and oil and gas extraction — -0.53
  23. Farm — -3.01
  24. Information — -4.80
  25. Forestry, fishing, and related activities — -5.93

Source: U.S. Bureau of Economic Analysis

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