Arizona business leaders remain confident despite threat of recession
Arizona business leaders are clear-eyed about a potential recession this year, but they remain more optimistic about success and growth than their peers in other states.
What's happening: About half of the leaders of the state's small and midsize businesses expect a recession in 2023, compared with 61% nationally, according to a new survey by JPMorgan Chase.
Why it matters: With a recession seeming increasingly likely, employers here appear to be more prepared to weather the storm.
By the numbers: Almost 60% of our business leaders said they were optimistic about the local economy, compared with 50% nationally.
- About 55% plan to hire full-time employees over the next 12 months.
- More than 40% of midsize businesses say they plan to increase wages.
What they're saying: "I have so much faith in our local business owners because they've been ready for this. After COVID, they learned so many things that they probably never thought of that they practiced all of 2022," Cherry Perez, JPMorgan Chase business banking market manager for Arizona, tells us.
- She says businesses she works with became more adaptable during the pandemic and are already training their employees to take on more responsibility and looking for ways to build customer loyalty.
- Perez also notes that managers are recognizing the importance of retaining employees and investing more in benefits, such as 401(k).
Flashback: Arizona was profoundly impacted by the last recession, mostly because of its reliance on the real estate and construction industries, which were hit particularly hard.
Yes, but: The state has worked to diversify its economy since then, adding more jobs in sectors like advanced manufacturing and health care.
- Greater Phoenix Economic Council CEO Chris Camacho tells us there are now more manufacturing jobs in the Valley than construction positions — something economic developers have been working toward since the Great Recession.
What's next: The Arizona Commerce Authority is currently working with about 330 businesses considering expanding here, according to Patrick Ptak, the organization's senior vice president of executive initiatives. More than 70% of those are manufacturing projects.
The bottom line: "Arizona has a more dynamic and vibrant economy than the rest of the country, and I think you can call it one of the national bright spots," Ptak says.
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