Arizona's Manufacturing Climate Remains Steady

Date: July 19, 2016 Last Edit: July 20, 2016

The state earns a C, same as last year.

Arizona’s Manufacturing Climate Remains Steady

Arizona’s manufacturing industry health carried over from 2015, remaining at a solid C, according to a new report by Conexus Indiana.

Ranking near the middle, the state matched its neighbors California and Utah, but came out ahead of both Nevada and New Mexico, which received F’s for their manufacturing industry health. Colorado earned a D.

The study takes into consideration share of total income earned by manufacturing employees, wage premium paid to manufacturing workers relative to other employees in the state, and share of manufacturing employment per capita.

Arizona’s 2014 total manufacturing output of $23.12 billion made up 9 percent of the state’s GDP, with more than 4,600 manufacturers employing over 157,000 workers, according to the Arizona Commerce Authority.

The Conexus study also looked at manufacturing factors like tax climate, global reach, and sector diversification. The state saw gains in some categories and no declining scores since last year’s report. Arizona improved its expected fiscal liability gap and global reach, and maintained its healthy tax climate grade of a B-.

“For firms that may operate virtually anywhere, tax rates (along with the quality of local public goods) matter a great deal in location decisions,” the report points out. “Business taxes, individual income taxes (both on workers and small business), sales, unemployment, insurance and property taxes all play a role in assessing regions for a potential employer location.”

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