Despite summer heat and the occasional monsoon storm, Arizona is a great place for outdoor activity most of the time. That led to new bases to train a huge number of military pilots in the World War II era, which introduced many to the then-lightly populated state. And it also led to making Arizona an important place in manufacturing for the aerospace industry.
That has continued until the present day, although a recent report shows Arizona has lost a step in its competitive edge. A report by the accounting and consulting firm PwC ranks Arizona ninth for “manufacturing attractiveness” in aerospace, down from fourth last year. In individual categories, the state is listed as fifth in industry scope, ninth in tax burden, 14th for costs, 17th in infrastructure, 21st in state economy and 25th in labor. Co-author and PwC partner Scott Thompson told The Arizona Republic, “It’s not anything Arizona is doing wrong, but some other states have been improving faster” and that small changes can affect the rankings.
Perhaps most revealing, the state has declined in the rankings for three straight years, from the No. 1 position in 2016.
Two key factors, Thompson said, were costs including manufacturing wages and energy, and labor, which involves the number of workers available and educational attainment.
Obviously, these factors are a two-edged sword. If wages are rising in the state and unemployment is low, that is generally a good thing. However, education is a very important item and affects the number of potential workers available for key industries.
The United States ranks No. 1 in the world for aerospace manufacturing, which is no surprise, although the global marketplace is more and more significant.
Now Pinal County is expected to soon be a leader in manufacturing of electric vehicles, which will be a huge boost to local economies. And, no surprise again, education will continue to be very important.
Arizona and Pinal certainly have been doing something right, but the PwC study shows we will need to keep our eye on the ball every year.