Manufacturing 2.0: A More Prosperous California

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Arizona


Arizona's manufacturing real GDP totaled $27.1 billion, or 12.6 percent of the state’s real GDP in 2007. Arizona’s manufacturing real GDP climbed 31 percent from 2000 to 2007, mostly from high-tech manufacturing industries.

Manufacturing employment in Arizona totaled 181,700 jobs, or 1.3 percent of the nation’s total in 2007, with 42 percent of it in high-tech manufacturing. The state has a growing technology cluster, the Tempe technology corridor near Phoenix, which attracts millions in venture capital. Industrial research and development spending in the state grew 22 percent from 2000 to 2007. However, the manufacturers’ capital expenditures in the state declined by more than the U.S. average, showing that Arizona manufacturers overall have reduced investments in the expansion and upgrades of their plants and equipment.

The average wage for Arizona’s entire manufacturing sector was $58,900 in 2007, a 19 percent increase from 2000. Technological advances coupled with a high-skilled work force made Arizona one of the top states in productivity. The value added per production worker in the state was $270,500 in 2007, besting the U.S. and California averages.

Manufacturing employment index (2000-2007)
State 2000 2001 2002 2003 2004 2005 2006 2007
California 100.00 96.01 88.08 83.25 82.11 81.10 80.31 78.98
Arizona 100.00 96.11 87.45 83.55 84.36 86.83 88.48 86.53
United States 100.00 95.22 88.37 84.03 82.91 82.40 82.00 80.41

Sources: U.S. Bureau of Labor Statistics, Moody's Economy.com, Milken Institute.

Top five indicators
Indicator United States
Value
AZ
Value
%
Change
Peer State
Rank
Real gross state product (US$ billions) $11,523.9 $213.3 34.6% 1
Per capita personal income (US$) $38,615 $32,833 28.0% 5
Total exports of goods (US$ billions) $1,162.5 $19.2 34.1% 7
Manufacturing's share of real GDP (%) 13.6% 12.6% -3.1% 4
Real manufacturing output per worker (US$ thousands) $113.6 $148.5 50.1% 3

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Bureau, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.

Economic climate indicators
Indicator United States
Value
AZ
Value
%
Change
Peer State
Rank
Real gross domestic product (US$ billions) $11,523.9 $213.3 34.6% 1
Total nonfarm employment (thousands, SA) $13,7604.3 $2,673.8 19.2% 1
Total exports of goods (US$ billions) $1,162.5 $19.2 34.1% 7
Per capita personal income (US$) $38,615 $32,833 28.0% 5
Median household income (US$) $50,740 $49,923 23.1% 2

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Bureau, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.

Business climate indicators
Indicator United States
Value
AZ
Value
%
Change
Peer State
Rank
Corporate income tax rate 15.0% -35.0% 6.97% -12.9% 4
Individual income tax rate 10.0% -35.0% 2.73% -4.79% -4.9% - -5.0% 4
Property tax rate 13.8% 12.1% -- 5
Sales tax rate 0% 5.6% 12.0% 3
Employer unemployment insurance tax rate 0.66% 0.34% 17.2% 1
Total state-local tax burden rate 9.9% 8.7% 0.0% 2
Per capita total state-local taxes paid (US$) $4,223 $3,302 33.6% 1
Government debt as % of GDP 65.5% 3.9% 95.0% 3
Per capita government spending (US$) $14,327 $4,470 40.6% 2
Nonfarm establishments (latest 2006) 7,601,160 $137,845 20.1% 1

Sources: Bureau of Economic Analysis, The Tax Foundation, U.S. Census Bureau, U.S. Office of Management and Budget, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.

Manufacturing indicators
Indicator United States
Value
AZ
Value
%
Change
Peer State
Rank
Manufacturing share of real GDP 13.6% 12.6% -3.1% 4
High-tech manufacturing share of real GDP 4.8% 8.8% 5.4% 6
Manufacturing employment (thousands) 13,882.6 181.7 -13.5% 5
High-tech manufacturing employment (thousands) 2,468.7 76.5 -17.8% 6
Share of U.S. high-tech manufacturing employment 2.0% (U.S. avg.) 3.1% 2.0% 6
Manufacturing wage per employee (US$) $53,804 $58,904 18.6% 8
Manufacturers' capital expenditures (US$ billions) $135.8 $1.9 -24.6% 7
Industrial R&D expenditures (US$ billions, 2005) $226.2 $3 21.9% 6
Real manufacturing output (US$ billions) $1,571.7 $27.1 30.5% 3
Real manufacturing output per worker (US$ thousands) 113.6 148.5 50.1% 3
Value added per production worker (US$) $249,139 $270,500 14.5% 8
Exports of manufactured goods (US$ billions) $1,022.1 $17.1 26.6% 7

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, The National Science Foundation, U.S. Census Bureau, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.
Leading business and economic indices
Indicator Peer State
Rank
National
Rank
State Business Tax Climate Index (Tax Foundation) 5 25
Best & Worst States [to do business] Survey (Chief Executive Magazine) 2 8
Competitiveness Index (Beacon Hill Institute) 5 19
Economic Competitiveness Index (American Legislative Exchange Council) 3 8
2007 State and Local Tax Burden (Public Policy Institute of New York) 2 12
Economic Freedom Index (Pacific Research Institute) 2 11
Small Business Survival Index (Small Business & Entrepreneurship Council) 3 13
2007 Cost-of-Doing-Business Index (Milken Institute) 4 22
State New Economy Index (Kauffman Foundation) 6 20
State Technology & Science Index (Milken Institute) 4 17

Note: Indices cited were published in 2008, unless otherwise stated. Some index rankings results were reversed from published rank in order to make them consistent across the different indices as presented here. The rankings are among the eight peer states, 1 = best and 8 = worst.
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