Phoenix, AZ, January 16, 2026
Arizona is entering a phase of rapid economic acceleration, with a focus on innovation and strategic investments. Phoenix is leading this growth, attracting talent and fostering an environment favorable to entrepreneurs. Projected job growth is expected to rise significantly, while strategic investments are boosting key sectors like technology and manufacturing. The state’s business-friendly policies and the resilience of its small businesses contribute to a robust economic outlook. Overall, Arizona’s economy is on a promising trajectory, ensuring continued engagement with local communities and supporting entrepreneurship.
Phoenix, AZ
Arizona’s Economy: Poised for an Accelerated Future
The Grand Canyon State is entering a period of significant economic acceleration, driven by a vibrant entrepreneurial spirit, strategic investments, and a commitment to business-friendly policies. Phoenix, in particular, stands as a beacon of growth, attracting new businesses and skilled talent.
Arizona’s economic outlook for the coming years shows promising trends, with various sectors experiencing robust expansion. This environment fosters personal achievement and underscores the resilience of the state’s diverse business landscape. The proactive stance on fostering innovation and streamlining processes positions Arizona, and especially its capital, Phoenix, for sustained economic momentum.
Arizona’s Accelerating Economic Momentum
Arizona’s economy is forecast to experience an acceleration in economic growth, influenced by an uptick in national economic activity. Projections indicate that state job growth, while modest in 2025 at 0.8%, is expected to rise to 1.6% in 2026 and 1.5% in 2027. The state’s nonfarm employment reached 3,302,200 in November 2025. This growth is largely driven by the private sector, which added 28,000 jobs over the year ending November 2025, while government employment saw a decline of 6,700 positions.
The Phoenix metropolitan area is a significant contributor to this growth, with job gains in the Phoenix MSA expected to rebound to 1.6% in 2026. Furthermore, Phoenix has been recognized among the top 10 U.S. markets to watch in 2026, due to strong job creation, continued population growth, and expanding manufacturing and tech sectors. Population growth statewide is anticipated to remain steady at 1.3%-1.4% per year over the next couple of years, primarily fueled by net migration.
A Fertile Ground for Entrepreneurs and Innovation
Arizona has emerged as a premier destination for entrepreneurs, consistently ranking among the best states for starting a business. In 2025, Arizona was ranked the 14th best state for entrepreneurs by SimplifyLLC, an increase of 11 spots from the previous year. This ranking is attributed to the state’s new business growth, which ranked 8th nationally, and its job creation rate, which stood at 4th. WalletHub also recognized Arizona as the 9th best state to launch a new business, considering factors like access to financing, a skilled workforce, and affordability.
The state’s innovation ecosystem is rapidly expanding. The Arizona Commerce Authority (ACA) hosts the Arizona Innovation Challenge (AIC), one of the nation’s largest business plan competitions, with a focus on Software as a Service (SaaS) startups in its Fall 2025 cohort. Major events like Arizona Tech Week, scheduled for April 2026, are designed to showcase the state’s growing innovation, attracting investors, startups, and global tech leaders across multiple cities including Phoenix, Tucson, and Flagstaff.
Strategic Investments Fueling Growth in Advanced Industries
Arizona’s economic acceleration is significantly bolstered by strategic investments in advanced industries. Sectors such as semiconductors, technology and AI, manufacturing, battery, aerospace and defense, and bioscience are experiencing considerable growth statewide. Notable developments include Amkor Technology in Peoria; Apex Power Conversion, Cyclic Materials, Gulfstream, Hadrian, Moses Lake Industries, and XNRGY in Mesa; ASML, Eternity Technologies, Lucid, Mayo Clinic, and TSMC in Phoenix; and Applied Materials and Brewer Science in Chandler.
In Fiscal Year 2025, companies committed to creating a projected 24,285 new jobs in Arizona with an average wage of $95,928, accompanied by over $31 billion in local community investments. The expansion of broadband infrastructure is also a key initiative, with Arizona’s Broadband Equity, Access, and Deployment (BEAD) Final Proposal unlocking $967 million to expand broadband infrastructure, supported by $520 million in private-sector matching. This plan is set to install over 7,709 miles of fiber optic technology, creating approximately 5,000 jobs. The state also launched the Arizona Permit Finder to reduce regulatory barriers and accelerate broadband expansion.
The Power of Limited Regulation and Pro-Business Policies
Arizona’s commitment to a business-friendly environment, characterized by streamlined regulations and a competitive tax structure, plays a crucial role in its economic appeal. The state’s corporate tax rate is 4.9%, one of the lowest nationally, and the individual income tax rate is a flat 2.5%, benefiting many small businesses and startups. Beyond favorable tax policies, Arizona maintains a lighter regulatory burden compared to many other states, with straightforward business licensing and no statewide franchise tax.
These pro-growth policies have contributed to Arizona outpacing many parts of the country in job and GDP growth. Conversely, analyses have highlighted the potential negative impact of excessive legislation. A 2025 report identified 88 bills that, if enacted, could have imposed over $45.9 billion in annual costs on businesses, reduced employment by 660,000 jobs, cut per-capita income by $4,600, and shrunk the state’s economy by $64 billion. This underscores the importance of continued vigilance in maintaining policies that support economic expansion.
Resilience and Community at the Core
Small businesses form the backbone of Arizona’s economy, demonstrating remarkable resilience through economic fluctuations and disruptions. In Maricopa County, which includes Phoenix, small businesses have adapted through innovation, community support, and an inherent entrepreneurial spirit. Digital transformation, including embracing e-commerce and online services, has been a key survival strategy. Local communities have shown strong loyalty to these businesses through “Shop Local” campaigns and city-sponsored grant programs.
Government and nonprofit entities, such as the Arizona Small Business Development Centers (SBDCs), provide vital support through funding, resources, and training, aiding entrepreneurs in navigating loan applications and expansion planning. These localized efforts ensure that economic growth remains deeply embedded within the communities, leveraging local talent and ideas. An economic impact report from the Black Chamber of Arizona revealed that its members saw a $1.5 million increase in sales and helped create over 500 new jobs between 2024 and 2025.
Phoenix’s Dynamic Real Estate and Workforce Landscape
The Greater Phoenix Metro area is undergoing a transformative period, with a convergence of new restaurants, tech expansions, manufacturing projects, energy infrastructure, and large-scale housing growth. Phoenix has successfully attracted skilled workers from other states, particularly from high-cost coastal markets, due to its affordable living and operating costs. The region is retaining its college graduates and drawing a young, skilled workforce, which is reshaping neighborhoods and driving housing demand.
The housing market in Phoenix is showing signs of recovery and stabilization in 2026, with closed sales rising from post-pandemic lows and mortgage rates stabilizing. While inventory remains tight, new construction is booming in suburban areas. The region’s transformation into a semiconductor, healthcare, and advanced manufacturing hub is influencing workforce and migration patterns, bringing high-income jobs that support homeownership.
Conclusion
Arizona’s economy, with Phoenix at its heart, is demonstrably poised for accelerated growth. The confluence of entrepreneurial drive, strategic investments in cutting-edge industries, a favorable regulatory and tax environment, and the innate resilience of its business community creates a powerful economic engine. As the state moves forward, a focus on fostering innovation, supporting small businesses, and maintaining a welcoming climate for investment and talent will be key to sustaining this positive trajectory and ensuring broad-based prosperity for all Arizonans. We encourage our readers to support local businesses, engage with community initiatives, and stay informed about the unfolding economic narrative shaping Phoenix’s bright future.
Frequently Asked Questions About Arizona’s Economic Acceleration
- What is the projected job growth for Arizona in 2026?
- Arizona’s job growth is expected to rise from 0.8% in 2025 to 1.6% in 2026 and 1.5% in 2027.
- How does Arizona rank for entrepreneurs?
- In 2025, Arizona ranked as the 14th best state for entrepreneurs, moving up 11 spots from the previous year, with new business growth ranked 8th and job creation rate ranked 4th nationally. It was also ranked the 9th best state to start a new business.
- What industries are driving economic growth in Arizona?
- Key industries driving growth include semiconductors, technology and AI, manufacturing, battery, aerospace and defense, and bioscience.
- What is Arizona’s corporate tax rate?
- Arizona has one of the lowest corporate tax rates in the country, currently at 4.9%.
- What is the role of small businesses in Arizona’s economy?
- Small businesses are considered the backbone of Arizona’s economy, demonstrating remarkable resilience and adapting through innovation, community support, and entrepreneurial spirit.
- How is the housing market performing in Phoenix?
- The Phoenix housing market is showing signs of recovery and stabilization in 2026, with rising closed sales from post-pandemic lows and stabilizing mortgage rates.
Key Features of Arizona’s Accelerating Economy
| Feature | Detail | Scope |
|---|---|---|
| Job Growth Projection (2026) | Expected to rise to 1.6% | State-level |
| Entrepreneurial Ranking (2025) | 14th best state by SimplifyLLC, 9th best by WalletHub | State-level |
| Leading Industries | Semiconductors, AI, manufacturing, bioscience, aerospace & defense | State-level |
| Corporate Tax Rate | 4.9% | State-level |
| Private Sector Job Growth (Year ending Nov 2025) | Added 28,000 jobs | State-level |
| New Job Commitments (FY25) | 24,285 new jobs with $31 billion investment | State-level |
| Broadband Expansion Funding | $967 million unlocked, $520 million private-sector matching | State-level |
| Phoenix Housing Market Outlook (2026) | Recovery and stabilization, rising closed sales, stabilizing mortgage rates | Phoenix MSA |
| Population Growth Rate (Next couple of years) | 1.3%-1.4% annually | State-level |
| Small Business Resilience Factors | Innovation, community support, entrepreneurial spirit, digital transformation | Maricopa County / State-level |
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Author: STAFF HERE PHOENIX WRITER
The PHOENIX STAFF WRITER represents the experienced team at HEREPhoenix.com, your go-to source for actionable local news and information in Phoenix, Maricopa County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Waste Management Phoenix Open, Cactus League Spring Training, and Arizona State Fair. Our coverage extends to key organizations like the Greater Phoenix Chamber of Commerce and Visit Phoenix, plus leading businesses in technology and healthcare that power the local economy such as Intel and Banner Health. As part of the broader HERE network, including HERETucson.com, we provide comprehensive, credible insights into Arizona's dynamic landscape.
