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Construction Industry Drives Down Arizona Unemployment Rate

Arizona added another 75,300 private sector jobs in the last year — and more than 25 percent of those were tied to the construction industry.

The strong construction growth, both in the past month and past year, was enough to drop the state's seasonally adjusted unemployment growth in April to 4.9 percent, down a tenth of a point. At the same time the national jobless rate dropped two-tenths of a point to 3.6 percent.

Prior to the recession, one job out of every 11 in the state was in construction. So when the real estate bubble burst and the bottom dropped out of the economy, Arizona was particularly hard it, with the jobless rate topping 11 percent.

But Doug Walls, director of labor market information for the Office of Economic Opportunity, said Thursday this is not an indication that history is repeating itself.

There are currently about 175,100 people employed in construction. That compares with the pre-recession peak of 247,500.

And construction jobs make up just 6 percent of total employment, not 9 percent as it did in 2006.

Walls also said that lending standards remain high, unlike pre-recession when people were given loans they could not afford to pay.

“Lending standards remain quite high,'' Walls said. “So those are all good signs that this is organic growth and less speculative within the construction industry and what we've seen in the past.”

Then there's the fact that the number of building permits for residential housing has remained relatively steady for the past two years.

“We continue to see pent-up demand for housing with uh homeowner vacancy rates at 14-year lows here, and even lower rates for rental vacancy rates,” he said.

Elsewhere in the state economy, growth in retail trade employment remains sluggish, adding just 1,100 jobs in the past year as the industry continues to face heavy competition from online retailers. The clothing and accessories sector was hit particularly hard, with employment there down by 700 in the past year.

Manufacturing continued to add workers, up 600 last month and 6,800 in the past year.

Across the state, Yuma county has the highest unemployment rate at 14 percent, though it is down two points from this time last year. Maricopa and Greenlee counties are the lowest: 3.7 percent.

Claire Caulfield first joined KJZZ as an intern in 2015 and now wakes up before the sun to produce and report for Morning Edition. She graduated from the Walter Cronkite School of Journalism and Mass Communication in 2017 and covered education policy in the nation's capital, election night in New York City and Native American issues for Cronkite News/ Arizona PBS. Before joining the Morning Edition team, she also worked on a documentary about rap music in the deep South and directed a film on drinking-water quality in the United States.On the weekends, you can find Claire flying her photography drone or working her way through the Pulitzer Prize book list.