Economist: Despite Nike departure, Phoenix Still Attractive For Manufacturing

Article originally posted on Phoenix Business Journal on July 30, 2020

Nike Inc.’s decision this week not to move forward with a planned manufacturing plant in Goodyear eliminates over 500 planned manufacturing jobs, but one economist said he expects the Phoenix metro to continue attracting manufacturing operations.

“Everything we can do to get manufacturing jobs in Arizona is a good thing,” said Alan Maguire, president and principal economist of the Phoenix-based Maguire Company. “I hate to see any of them go away.”

Maguire said he is hopeful that Nike will reevaluate the decision to abandon the Goodyear plant when market conditions are better and the Covid-19 pandemic’s effect on business has subsided.

Arizona is uniquely positioned for Nike’s operations, Maguire said, especially due to its proximity to California, Mexico, and having two interstate freeways that run east and west through the state.

“I’m sure Nike thought all about that when they made their decision to come,” he said. “All of those factors that made them want to come are still here, it will just be somebody else next time.”

Maguire said companies looking to leave denser cities in the wake of the Covid-19 pandemic might see Phoenix as an attractive option.

“We’re a very low-density city,” he said. “Phoenix is a big city, but it feels like a suburb.”

The world’s largest contract silicon chip manufacturer certainly had Phoenix in its sights when it was confirmed in May that Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) said it would spend about $12 billion on a massive advanced semiconductor factory in the Valley, bringing more than 1,600 jobs to Arizona. At the time the company said it was evaluating several sites in the region for the plant that could go into operation as early as 2023.

According to the U.S. Bureau of Labor Statistics, Arizona had 171,200 manufacturing jobs in June 2020, a 3.4% decrease from June 2019.

Nike confirmed Tuesday that it would “not continue investment” in the Goodyear plant, which had yet to open.

“We are experiencing unprecedented times and due to the Covid-19 impact we will no longer be investing in our Goodyear facility,” a Nike spokesman said in a statement. “We are repositioning our resources to further invest against our biggest opportunities and Air MI will continue to be an important part of Nike’s growth strategy. We thank the City of Goodyear and the team we have worked with to date; they have been outstanding partners.”

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