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Sept 23 Phoenix BLOG

Phoenix Rising: Exciting Development in Job Growth & Expansion in Arizona's Capital

The city of Phoenix is quickly becoming one of the most exciting places to live in the United States. It’s job growth and economic expansion are at the forefront of the conversation, as the population continues to swell, and the city earns national recognition for its exciting development.

With a plethora of job opportunities and an expansive business landscape, Phoenix is truly rising and establishing itself as a leader in economic growth. Read on to learn more about the exciting developments in job growth and expansion in Arizona’s capital.

Downtown Phoenix Buildings
Arizona Continues to Attract New Residents Despite Record-Breaking Heat

Despite scorching temperatures, Arizona is continuing to draw in new residents thanks to its thriving economy. In fact, a recent study published in the Phoenix Business Journal ranked Arizona as one of the top five states in the country attracting residents with at least $200,000 in adjusted gross income. The tax data further reveals that between 2020 and 2021, Arizona experienced the fourth-largest net migration of high-earning households in the U.S., resulting in a net gain of 4,563 households.

So, what’s driving this population growth? Well, it’s a combination of factors. Job creation plays a significant role, with the expansion of Coolidge’s SRP Generating Station and the development of advanced manufacturing jobs contributing to a 12% population growth in the city. Additionally, Arizona’s investment in clean energy, particularly solar energy potential, has added to its appeal.

But it’s not just about the job market. The Phoenix metro area offers a lower cost of living compared to many other metropolitan areas, making it an attractive destination for individuals and families looking for a more affordable lifestyle. Furthermore, Arizona’s robust health care sector is expected to continue growing annually, making it the largest single sector impacting the state’s economy positively.

Despite the intense heat, Arizona’s strong economic climate, job opportunities, reliable services, clean energy resources, and lower cost of living continue to draw new residents, proving that the desert state has much more to offer than just record-breaking temperatures.

Here’s how many Californians — and others — have moved to Arizona

Approximately 64,000 Californians packed their bags and made the move to Arizona every year between 2017 and 2021. It’s no surprise that California takes the crown as the largest contributor to Arizona’s domestic migration. This influx of residents is essential for Arizona’s economic prosperity, as it drives consumer demand, boosts business expansion, investments, and enhances the state’s competitiveness and innovation.

Net migration has played a pivotal role in Arizona’s population growth, often surpassing natural increase (that’s births minus deaths, folks). According to the U.S. Census Bureau’s American Community Survey for the 2017-2021 period, people from all corners of the United States have flocked to Arizona. In fact, an average of 261,509 migrants relocated to Arizona each year during that period.

So, where are these migrants coming from? Well, the West takes the lead, accounting for 52.6% of migrants, followed by the Midwest at 20.7%, the South at 19.2%, and the Northeast at 7.6%. Among the top ten states contributing domestic migrants to Arizona, California sits comfortably at the top, responsible for a whopping 24.2% of the migration. The cities of Phoenix and Tucson also owe a sizable chunk of their population growth to Californians, with 23.2% and 22.8% of domestic migrants, respectively.

To sum it up, California has been the primary provider of fresh faces in Arizona, both in the state and its largest cities. Looks like Arizona is truly shining as the land of opportunity for many seeking a change of scenery and a new chapter in the desert state.

Google breaks ground on first-ever Arizona facility. What to know about the $600M data centre

Google has made an exciting move by breaking ground on its first-ever facility in Arizona. This $600 million data center, located in Mesa’s tech corridor, will bring significant benefits to the region. Not only will it create job opportunities for construction workers, but it will also support Google’s cloud business and AI innovations. By powering digital services like search, maps, Gmail, and Google Cloud, this data centre plays a crucial role in enhancing the technological landscape of Arizona.

What sets this facility apart is its state-of-the-art air-cooling technology, which eliminates the need for water-based cooling systems. Google is also committed to sustainability, with plans to achieve net-zero emissions by 2030 and replenish 120% of the water it consumes. This groundbreaking project demonstrates Google’s dedication to the future of Arizona and its goal of making a positive impact on the local community.

Google Building Expansion to Arizona
Phoenix ranks No. 6 for data centre construction in 2023

Phoenix is making waves in the world of data centre construction, securing its position as the sixth-ranked city for such development in 2023. The growth in the Phoenix market is being fuelled by cloud service providers, who are driving significant activity in the area. In the first half of 2023, Phoenix saw an impressive 163.5 MW (Megawatts) of data centre construction, with a remarkable 88.07% of the under-construction inventory already pre-leased. This high prelease percentage puts Phoenix in the top three among U.S. data centre markets.

The market’s inventory growth has been substantial, increasing from 324.5 MW in the first half of 2022 to 360 MW in the same period this year, representing an 11% year-over-year growth. Rental rates in Phoenix have also seen a significant boost, rising by 30% compared to last year and reaching $170-$200, the highest increase among all markets. This surge in rates is primarily driven by the demand for large hyperscale leasing requirements.

Nationally, the data centre construction market is robust, with 2,287.6 MW of supply currently under construction, and over 70% of that space already pre-leased. Companies are even leasing space up to 36 months in advance of construction completion, highlighting the demand and competition in the industry. Absorption in the primary U.S. data centre markets have reached 468.8 MW in the first half of 2023, with vacancy rates reaching record lows. With these statistics, its clear that the data centre industry is booming, and Phoenix is firmly positioned as a key player in this exciting sector.

Arizona unemployment rate is down, and wages are up

The job market in Arizona is booming, with the unemployment rate at its lowest point in decades. It’s an exciting time for job seekers, as there are more job openings than ever before. In June, Arizona had a staggering 193,000 job openings, and the unemployment rate sat at just 3.6%. That’s significantly below the long-term average of 6.1%.

Overall, economists are optimistic about Arizona’s economic outlook. Despite some challenges, there is an expectation of continued job growth in the state. 

Phoenix trade zone gets top ranking as product imports, exports soar

Phoenix’s Foreign Trade Zone No. 75 has emerged as a frontrunner, ranking fifth in the U.S. for imports in 2022. This achievement highlights the region’s rapid industrial growth and the expanding presence of companies within the area. Foreign Trade Zones (FTZs) provide a range of benefits, such as streamlined processes and cost savings, making them an attractive option for businesses involved in international trade. In 2022, Phoenix’s FTZ imported over $15 billion worth of merchandise and witnessed more than $1 billion in exports.

While Phoenix holds an impressive position in the ranking, it follows Nashville, Los Angeles, Gramercy (Louisiana), and Chicago in terms of import volumes. As trade ties with Mexico strengthen, there has been a notable shift towards more imports from Mexico compared to China, which has significantly impacted the state’s economy. With its business-friendly environment and flourishing technology industry, Arizona continues to attract major projects, approximately sixty mega projects are currently under consideration.

Tempe Town Lake Arizona buildings at night

The growth of the semiconductor industry is expected to further drive trade in Phoenix’s FTZ, and Arizona and Texas are poised to lead in supporting the expansion of the chip industry. Numerous companies, including Sub-Zero Inc., Rauch North America Inc., and Andersen Regional Manufacturing Inc., have already taken advantage of the benefits offered by FTZs in the Phoenix metropolitan area. Some of Arizona’s top foreign-status products by value include equipment and machinery, consumer products, electronics, chemicals, textiles, footwear, and more. As Phoenix’s FTZ continues to excel, it strengthens the region’s position as a hub for international trade and commerce.

Despite the record-breaking heat, Arizona continues to attract new residents thanks to its thriving economy and job opportunities. The state has seen a substantial number of Californians making the move to Arizona and we have seen a great impact it has had on the state’s economic prosperity.  It’s clear that Arizona’s capital is on the rise, and we are looking forward to what the next month holds for this dynamic and vibrant city.

Since 2019, Rise48 Equity has completed over $2.03 Billion+ in Total Transactions, and currently has $1.59 Billion+ of Assets Under Management located in Phoenix and Dallas.