Arizona to rank among nation's leaders in job, income and population growth through end of the century.

LEXINGTON, Mass.--(BUSINESS WIRE)--May 22, 1997--

DRI/McGraw-Hill Releases Long-Term Economic Outlook for Arizona

A magnet for the growing retiree population and a destination for companies seeking a more favorable business climate, Arizona will experience some of the most significant population and job growth gains in the nation over the next five to ten years, according to the U.S. Regional Economies Forecast released today by DRI/McGraw-Hill, the world's leading provider of economic forecasting, consulting and information services.

Second only to Nevada in income, population and labor-force growth, Arizona will be the nation's third largest creator of jobs well into the 21st century as a large share of the U.S. population migrates from the Northeast and Midwest to the promise of economic prosperity anticipated in the Pacific Southwest.

In its recently published long-term regional outlook, DRI/McGraw-Hill states that Arizona's economic acceleration is being fueled by a combination of expansions in non-defense manufacturing, the dynamic evolution of its high tech industries, and an inundation of older Americans seeking Arizona's warmer, drier climate. In addition, the state has benefited tremendously from robust population gains, stemming in no small part from the exodus from California of individuals and business during the first half of the 1990s. As a result, employment in services, retail trade, state and local government and construction has surged, and will continue to do so for the next decade.

"Because the migration of the population -- in or out of a particular region -- can have tremendous impact on its economic viability, there will be increasing inter-state competition to attract and retain individuals and businesses," said Sara Johnson, chief regional economist for DRI/McGraw-Hill and author of the forecast. "Now and in the foreseeable future, Arizona has a real competitive advantage, despite the fact that the state's economy is actually retreating from its peak in 1994."

The U.S. population is expected to grow only modestly over the next decade, and the long-term demographic slowdown will be the driving force of a sharp decline in job growth across all states. Arizona's total employment grew by 6.1 percent in 1995 and 5.6 percent in 1996, far outpacing the national average of 2.1 percent. Employment growth is expected to further slow in Arizona to 4.0 percent in 1997 and to only 2.8 percent in 1998.

Retail trade, services, and state and local government have recorded the largest job gains in Arizona over the past two years, and along with wholesale trade, have been the fastest-growing sectors. Total manufacturing payrolls jumped by 13,100 jobs from 1994 to 1996, although hiring in Arizona's manufacturing and construction sectors will moderate in the late 1990s.

Total housing starts in Arizona peaked in 1996 at 55,100 units, the third consecutive year above the 50,000 mark for the state. Multi-family starts reached 13,200, their highest level since 1987. Home-building will slowly but steadily decline through the turn of the century; however, the presence of strong commercial and industrial markets will buoy construction employment during that time.

The state of Arizona forecast produced by DRI/McGraw-Hill is part of the U.S. Regional Overview, a comprehensive publication that provides detailed analyses on the recent and expected economic performance for all fifty states and the District of Columbia. The report includes information and projections for the next 25 years covering statistics on employment, population, labor markets, income, prices and wages and other economic activity. Those interested in purchasing the overview can contact DRI/McGraw-Hill headquarters at 617-863-5100 or visit its website at http://www.dri.mcgraw-hill.com .

DRI/McGraw-Hill, a unit of Standard & Poor's, provides data, analysis, forecasts and expert advice to more than 2,000 business, financial and government organizations worldwide. Established in 1968, DRI/McGraw-Hill is headquartered in Lexington, Massachusetts and maintains offices in New York, San Francisco and Washington, D.C., and outside the U.S. in Canada, Belgium, France, Germany, Italy, United Kingdom and Hong Kong. The company also maintains strategic partnerships with firms throughout Asia and Latin America.

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Constance Hubbell

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