Horizon, Host: Ted Simons

May 4, 2010

Host: Ted Simons

Arizona Jobs

  • A look at Arizona‚Äôs employment numbers with Aruna Murthy, Director of Economic Analysis for the State Department of Commerce.
  • Aruna Murthy - Director of Economic Analysis, State Department of Commerce
Category: Business/Economy   |   Keywords: economics, department of commerce,

View Transcript
Ted Simons:
Tonight on "Horizon," Arizona's most recent job forecast suggests slow-going for the rest of the year. We'll hear more about that. We'll talk about the impact budget cuts will have on mental health programs in our state. Plus, we'll check in with "Ballet Arizona." That's next on "Horizon." Good evening and welcome to "Horizon." I'm Ted Simons. The FBI is investigating a suspicious envelope sent to Governor Brewer's office. The Capitol went into lockdown for an hour today after an employee opened the envelope and a white powder spilled onto a computer. No one was harmed in the incident. The powder is being analyzed by the state health lab. A new poll is out on Senate Bill 1070. The Rocky Mountain poll, conducted by phoenix-based Behavior Research Center, finds that 52 percent of those surveyed statewide support the new immigration law. 39 percent are against it. The poll found most support for the law among whites, republicans and older people, while democrats and minorities opposed it the most. The poll also found support waned, slightly, after the governor signed the measure. And the Phoenix Suns announced that they'll be wearing their "Los Suns" jerseys for the second game of their playoff series against the San Antonio Spurs. The game will be played tomorrow night on Cinco de Mayo. Suns owner Robert Sarver says he and the team's players want to celebrate the team's diversity while at the same time show opposition to the state's new immigration law. Arizona is expected to lose 50,000 jobs this year. That's much higher than a previous forecast from the Arizona department of commerce. But next year, the state is expected to see an increase in jobs. Here to discuss all this is Aruna Murthy, director of economic analysis at the Department of Commerce. Good to have you here. Thank you for joining us.

Aruna Murthy:
Thank you.

Ted Simons:
50,000 jobs lost. The forecast for 17,000. That's a lot more than forecast. What happened out there?

Aruna Murthy:
For the year 2009, the observed losses in terms of total non-farm jobs were way higher than we anticipated before, so since forecasts are based out above the numbers in the past, that was the result for --

Ted Simons:
Kind of a snowballing affect, cumulative effect sort of thing.

Aruna Murthy:
That's right.

Ted Simons:
But now the forecast suggests we may be seeing better times as of next year. Why is that? What are you seeing out there?

Aruna Murthy:
Economic conditions are improving. The past eight months, the year-over-year change in terms of losses has been slowing down. We're seeing total non-farm losses declining. We started in April 2009, and as of March 2010, the losses declined year-over-year to about 3.9 percent. So if the strength continues, we should hit that point pretty quick.

Ted Simons:
As far as this year is concerned, it seems like the only sectors doing half decently is tourism, hospitality, leisure and such, education and health, is that pretty much on the mark there?

Aruna Murthy:
That's right. The gain in leisure and hospitality is small. These two sectors, again, we don't lead to sectors, which will be observing gains in 2010 and 2011. With the exception of these two sectors in 2011, we are seeing about four other sectors where gains are expected in 2011.

Ted Simons:
Real quickly, before we get to that, I know the two very important industries in Arizona, construction and aerospace. Start with aerospace. What are you seeing there?

Aruna Murthy:
In 2010, we are expecting a loss in jobs in the aerospace industry. In 2011, we expect it to be flat. In the aerospace industry, unlike -- even when during the recessionary times the total non-farm employment was declining and manufacturing employment was declining, overall, the aerospace industry was growing. But with recent cancellation of the defense contracts, and there has also been a number of positions that have not been decided yet but if the defense programs, the C-17, based on the outcome of these programs, the general feeling is that the spending on aerospace will decline.

Ted Simons:
Now, as far as construction is concerned, some folks would say they would like to see the state a little less dependent on construction jobs, and you're saying that may very well be the case, huh?

Aruna Murthy:
Yes, it is always good in terms of bad times, but now dependent on construction, we had 9.5 percent of our total non-farm base dependent on construction and about the peak times of construction, June 2006. But now the share of non-farm employment reduced to 4.6. The U.S. is 4.3, so hopefully we'll be following the trend similar to the U.S. in terms of how our economy looks like down the road.

Ted Simons:
Is there any way, and I think I know the answer here, but is there any way to know the impact of a couple of very controversial topics? I'll start with the temporary sales tax increase. Can that be factored in right now at all? If that were to pass, can you do any of that at all? Or do you have to wait and see?

Aruna Murthy:
I haven't done any study, actually, assessing the impact of the sales tax revenue on employment. But when these projections were made, they were based on data as of December 2009, so there might be certain sectors, which could be impacted if the sales tax revenue were not to be passed. I mean, mainly the education and health services sector, and, you know, the security areas. But outside of that, I cannot give you any numbers to say what might be the volume of people losing jobs.

Ted Simons:
And I would imagine the same scenario when it comes to all these folks saying they will boycott Arizona, they'll not buy from Arizona companies, it is impossible to gauge that now, correct?

Aruna Murthy:

Ted Simons:
Bottom line, we're seeing things should be bottoming out, that's the bottom line, this year and improvement next year. Would you be surprised if that improvement didn't happen next year?

Aruna Murthy:
I feel optimistic of the general economic indicators are that we're heading in the right direction. Almost all the economists in the area are predicting slow to moderate recovery, so hopefully, if the trends continue as to what we're observing right now, the recovery is down the road.

Ted Simons:
Okay, that's an optimistic note and a good one to stop on. Thank you for joining us.

Aruna Murthy:
Thank you very much.

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