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News & Press: Arizona Business News Updates

Phoenix Forbes Ranking Good for Northern Arizona

Wednesday, September 14, 2011   (0 Comments)
Posted by: Rhette Baughman
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September 13
Courtney Leigh

Phoenix is likely to become one of this country’s next boomtowns, according to Forbes Magazine and Joel Kotkin’s article, "What Cities Are Best Positioned to Grow and Prosper in the Coming Decade?” Out of 52 of the largest metro areas in the United States that were evaluated and assessed, Phoenix ranked ninth.

Being included on such an elite list is very promising for not only the city of Phoenix, but the Flagstaff area and the entire state of Arizona.

"Proportionally, when Phoenix grows, Flagstaff grows,” said Joe Kleigel, associate broker for Russ Lyon Realty in Flagstaff. "Forty percent to 50 percent of the homes in Flagstaff are second homes to people who come up from the Valley.”

Statistics support the connection between Phoenix and Flagstaff, as both areas contribute to the state economy tremendously – perhaps more than some would expect. Data gathered by Arizona’s Department of Commerce and the U.S. Bureau of Economic Analysis report metro-Phoenix ranks the highest Gross Domestic Product per capita in the state at $43,703. Flagstaff’s metro area accounts for the second highest at $37,174 and metro-Tucson accounts for the third highest at $32,050.

"About 75 percent of Arizona’s population is located in the Phoenix metro-area,” said David Drennon, vice president of marketing and business development for the Arizona Small Business Association (ASBA). "Phoenix’s prosperity creates business opportunities that don’t already exist in rural areas of the state. The big cities create leverage, expand [business] partnerships throughout Arizona.”

According to Kotkin’s article, the factors used to rank the future prosperity of U.S. metro areas "started with job growth, not only looking at performance over the past decade but also focusing on growth in the past two years.” Other factors include "…rates of family formation…, growth in educated migration, population growth and, finally…attractiveness to immigrants, as places to settle, make money and start businesses.”

Though Phoenix has taken some hits throughout the latest recession, the area still has a better employment rate than it did in 2000, a very encouraging fact compared to other U.S. cities that didn’t make the top ten list. San Francisco, at 42nd, ranked lower based on an aging population and poor prospective job growth. Los Angeles, ranked 47th, has a shrinking industrial sector due to increasing regulations.

"Ninety-seven percent of businesses in Arizona are small businesses. That means they have 500 employees or less,” Drennon said. "As of June, the majority of ASBA members plan to hire within the next year. ASBA’s June 2011 membership poll indicated 71 percent of businesses had better financial outlooks than last year.”

Phoenix relies on small businesses to succeed just as much as any other metro area in Arizona, like Flagstaff. What makes the state’s largest city unique is the good balance between population growth, low-cost housing, business incentives, immigrants with entrepreneurial spirits starting new business endeavors, and an educated workforce.

"We want to invite industries [and employers] to locate here and retain the talent we have in Arizona. Our goal is to keep Northern Arizona University students and University of Arizona students from leaving once they graduate,” said Drennon. "A lot of companies want to be located in areas near so much talent, too.”

The more incentives Phoenix, Flagstaff and all of Arizona’s key metro areas can create for migrant work forces and immigrants, the better this state will reap economic rewards all around.

"The housing industry [in Flagstaff] is turning around,” Kleigel said about the real estate market. "It is looking like the housing decline is pretty much over.”

If Phoenix stays the course, the expected trickle effect will likely spread prosperity not only throughout the Valley, but communities like Flagstaff. No matter what, the outlook is promising. FBN

Source: http://www.flagstaffbusinessnews.com/phoenix-forbes-ranking-good-for-northern-arizona/


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