Arizona construction industry growing despite rising interest rates

Howard Fischer Capitol Media Services PHOENIX — Interest rates may be rising, driving up the cost of mortgages. But a new report from Arizona's Office of Economic Opportunity shows the state's construction industry continues to add jobs.

Doug Walls, the agency's labor market information director, pointed out Thursday that as recently as February of this year, fewer than one out of every five permits for new private housing were for buildings with five or more units.The trend closely matches the series of sharp increases in interest rates, with the federal funds rate — which influences all other lending — rising from less than 1% at the beginning of the year to 3.9%.

At the same time, he noted, the prices of homes themselves have been going up. That has caused other ripple effects. Bars and restaurants added another 1,300 workers in November, bringing total employment up by nearly 11,000 over the same time a year earlier. But hiring at hotels and resorts was weak in November, with that sector of the economy actually shedding 400 jobs from the prior month.

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