Three Arizona economists say the state's business and jobs picture is improving and 2012 will show clear signs of recovery.
That's despite a small job loss in January, according to statistics released this week by the state Office of Employment and Population Statistics. Arizona lost 34,300 non-farm jobs, a smaller than typical loss for the month of January, said Aruna Murthy, the state's director of economic analysis.
The jobless rate was 8.7 percent, down from a revised 9.0 percent in December, she said. From January 2011, when the rate was 9.9 percent, to this January, the number of jobs in the state grew by 37,800.
Another economist said he sees the year-over-year job growth as a key sign of economic improvement.
"Overall, we're starting to see those growth trends that started last year actually turn into real trends," said Jim Rounds, senior vice president and economist with Elliott D. Pollack and Co. of Scottsdale. "You see two or three months of positive data, you get optimistic. But you're a little bit skeptical, because you want to see if it's going to continue. So we've been seeing many months of positive data."
Rounds, in an interview for Arizona Week, said focusing on job growth rather than on the unemployment rate is a better indicator of what's happening with the economy.
"This calendar year is a year people are going to point to where they feel like they're in economic recovery," Rounds said. "We've been in recovery mode for a couple of years now. But '12 will be the year we're starting to really feel it, and '13, I think, is when we're going to see the economy accelerate."
Murthy agreed.
"One thing I can say at this point is 2012 will be better than 2011," she said, also in an Arizona Week interview. "Just looking at trends that I see right now, I don't see a double-dip recession. ... We have come out of recession."
The signs are encouraging, said Lora Mwaniki-Lyman, a research economist at the University of Arizona's Economic and Business Research Center. Yet, the state has work to do, especially in high technology innovation, she said.
"Compared to its peers, Arizona seems to underperform," Mwaniki-Lyman said in an Arizona Week interview. "A study by the Milken Institute that looked at the state of Arizona in comparison to other states in the way it brought technology to the market, in the 21st century economy, indicates Arizona ranked 19th in 2009, compared to 17th in 2007."
She said the state needs to perform better in higher education, providing capital, especially risk capital, and venture capital to small businesses and entrepreneurs.
"Arizona is struggling, because looking at the history in the last few years, the universities have gone through very severe budget cuts ... ," she said. "Because of that, human development investment has been reduced."
Mwaniki-Lyman said the state has opportunities in the global economy, especially in expanded trade with Mexico, other Latin American countries and China. Mexico and China escaped the worst of the economic downturn in the last few years and thus are running ahead when it comes to consumer demand, she said.
Reporter Michael Chihak further explores the state of Arizona's economy and job growth on Arizona Week. Watch here.
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