Hourly Update

State forecast sees strong economy continuing

PHOENIX - Arizona's economy will remain strong and outpace the nation as a whole this year and next although at a slightly slower pace then previously projected, state researchers said Thursday. Department of Economic Security researchers said in a work force analysis that non-farm jobs will increase by 4.9 percent this year and by 4 percent in 2007, compared with 5.3 percent in 2005. DES said non-farm employment is expected to increase by 228,000 jobs over the two-year period, down from 256,000 under a previous DES estimate. The DES analysis said the greatest number of new jobs will be added in professional and business services but that natural resources and mining will see the fastest growth pace because any significant expansion in that technology-reliant sector's relatively small work force can have a big percentage impact. DES said information is the only industry likely to see job losses while weakness forecast in job growth will be most evident in sectors associated with consumer spending and housing. In a separate report, the Legislature's budget staff said Wednesday that July tax collections of $658.9 million were up 6.6 percent from July 2005 but $700,000 below the current budget's forecast for the month. July sales tax collections and corporate income tax collections were up 12.2 percent and 10.6 percent, respectively, while individual income tax collections were up only 4 percent from those of July 2005, the Joint Legislative Budget Committee staff said.