For decades, Arizona was one of the national leaders in aggregate economic growth, as measured by the percent change in measures such as gross product and employment. However, its growth rate always has been highly cyclical. During expansionary periods, Arizona always has been among the top states on the rate of growth. During recessions, the Arizona economy generally slumped at a rate similar to the national average, but would experience a rapid recovery. This pattern continued through the economic expansion of the mid-2000s.

Per capita earnings in Arizona has been lower than the national average for decades. The 2011 differential of 19 percent is the largest on record; the typical differential has been between 10 and 15 percent. Thus, for residents who have spent some or all of their working life in the state, the state’s historically low per capita earnings help to explain the state’s below-average per capita property income.

Arizona faces some big challenges if it is to compete regionally, nationally and globally for the cutting-edge jobs that will help determine our economic future. As hard as state and community leaders are working, the report suggests that Arizona needs even more participation in economic development leadership, more collaboration among economic development groups and a greater sense of urgency. This report identifies a number of important issues that are key to advancing economic development in Arizona.