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PHX Named 5th Largest/Fastest Growing City

Credit: City of Phoenix/U.S. Census Bureau

By Roland Murphy for Arizona Builder’s Exchange

Phoenix Mayor Greg Stanton let the news slip at the Bisnow Phoenix New Construction and Development event earlier this month (AZBEX, May 19) and last week the City and other sources jumped on the official announcement: Phoenix is both the 5th largest and the fastest growing city in the country.

Estimates recently published by the U.S. Census Bureau put Phoenix’s population at 1.62M people for 2016, an addition of more than 32,000 from 2015. The metro area total was 4.66M.

City and regional leaders were quick to trumpet the news as justification for the area’s investment and economic development strategies, particularly in the aftermath of the Great Recession.

“Growth is good, and we are happy to be the fifth-largest city in the country, but our focus in Phoenix is on quality,” Stanton said in the City’s official announcement. “We have worked very hard to create a more innovation-based, export-driven economy that’s more sustainable and brings more quality jobs into the area. It’s working, and people are voting with their feet to be a part of what Phoenix is building.”

Shift in Focus Key to Recovery, Growth

The announcement highlighted the degree to which GDP across the Valley has shifted in recent years. Nearly two-thirds of the recovery has come through advanced industry sections such as technology, financial services and healthcare. At the Bisnow event, Stanton singled out healthcare as the only industry segment that grew in the recession and touted the city’s investments in downtown, education and infrastructure, particularly in transportation, as key contributors to that growth.

The general shift in employment and income toward more high-end industries is evidenced not just in population growth, but also in income. The City sites data from the U.S. Bureau of Labor Statistics that puts the average Phoenix-area wage nearly even with the national average at 96 percent. The highest average pre-recession wage in Phoenix was 85 percent.

“Phoenix is growing because we’re making it a destination of choice for companies looking to relocate,” said Phoenix City Councilmember Jim Waring, District 2. “We’re building our economy and bringing in new people looking to take advantage of our excellent quality of life.”

“Phoenix and Arizona are open for business,” said Sal DiCiccio, councilmember for District 6. “The steps we’ve taken in recent years – making Phoenix the fastest city in the nation with 24-hour permitting and inspections – has made it easier to grow or expand businesses. Those steps are paying off in a huge way. Phoenix is rising.”

An article last week in Phoenix Business Journal cites estimates from the Arizona State University W.P. Carey School of Business that project a 2 percent population growth for the metro area this year, after 2.1 percent in 2016 and 2 percent in 2015.

Phoenix Isn’t Alone

The Phoenix metro area is not the only portion of the state seeing significant growth. An article last week that first ran in The Capitol Times and was picked up by The Casa Grande Dispatch points out higher populations in Pinal County as well.

Queen Creek, which lies in Maricopa and Pinal counties, grew 8.2 percent last year, according to the article. Marana grew at 3.6, and both Apache Junction and Casa Grande increased by 3.3. With the exceptions of Florence and Eloy, every incorporated area in Pinal saw growth to some degree over 2016.

Pinal County has made significant investments in its image and outreach to draw economic development opportunities. As a result, hundreds of millions of dollars in new development, including a factory by Lucid Motors, a state of the art club, major entertainment outlets and other highly sought-after businesses are building or have plans to build in the area.

Estimates are Just That

The Capitol Times story points out, however, that estimates are not the be-all and end-all when it comes to either economic or population numbers. The story cites Jim Chang, state demographer with the Arizona Office of Economic Opportunity, who pointed out the Census Bureau annual report’s estimates are compiled using official 10-year base counts, which are then updated yearly to reflect boundary changes and, subsequently, households to create the new projections.

These numbers will almost certainly be revised and corrected after the official 2020 census numbers are published in 2021.

Still, economic indicators like construction starts, housing and commercial vacancy rates, and even light rail ridership volumes all but make certain the strong optimism expressed by area officials is primarily justified.

“Phoenix has a fresh, new brand that says it is a generous, diverse and welcoming community for entrepreneurs and innovators. Our economy is more diversified and doing better. We are leading the nation in tech job growth,” said Daniel Valenzuela Phoenix District 5 councilmember. “Today our brand is inclusive and welcoming. It’s not the fact that we moved past Philadelphia as the 5th largest city in the country, it’s why we moved past them that should have our attention.”

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