Arizona business leaders remain confident despite recession threat

crystal ball with graph arrow going up and down

Illustration: Lazaro Gamio/Axios

Arizona business leaders are clear about a potential recession this year, but remain more optimistic about success and growth than their counterparts in other states.

What is happening: About half of the nation’s small- and medium-sized business leaders expect a recession in 2023, compared with 61% nationally, according to a new survey by JPMorgan Chase.

Why it matters: With a recession looking increasingly likely, employers here are more prepared to weather the storm.

By numbers: Nearly 60% of our business leaders said they were optimistic about the local economy, compared to 50% nationally.

  • About 55% plan to hire full-time employees in the next 12 months.
  • More than 40% of medium-sized companies say they plan to increase wages.

What they say: “I have a lot of confidence in our local entrepreneurs because they were prepared for this. After COVID, they learned so many things that they probably never thought about that they practiced all of 2022,” Cherry Perez, JPMorgan Chase’s banking market leader for Arizona, tells us .

  • He says the companies he works with have become 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 a 401(k).

Flashback: Arizona was hit hard by the last recession, largely because of its reliance on the real estate and construction industries, which were hit particularly hard.

Yes, but: The state has since worked to diversify its economy, adding more jobs in sectors such as 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 — something economic developers have been working on since the Great Recession.

What is next: The Arizona Commerce Authority is currently working with about 330 companies considering expanding here, according to Patrick Ptak, the organization’s senior vice president of executive initiatives. More than 70% of them are production projects.

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 nation’s bright spots,” Ptak says.

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