PHOENIX, ARIZ. (August 4, 2025) — The Arizona Association for Economic Development (AAED) has released its fourth annual State of Economic Development Report, providing a comprehensive look at the challenges, strategies, and outlooks shaping economic development across Arizona.
The 2025 report reflects record-breaking participation and a broader range of voices, including increased representation from rural communities and seasoned professionals. The insights serve as both a mirror of current realities and a guide for future action.
Key Findings from the 2025 Report:
Strategic Shifts
- Regional collaboration now ranks as the top strategy, overtaking business attraction. Economic developers are turning to cross-community partnerships to address shared infrastructure and workforce needs.
- While budgets remained relatively stable, long-term strategic planning is on the decline, with fewer practitioners reporting an active plan—signaling possible resource strain or changing priorities.
Top Challenges
- Availability of space and housing remain top issues, with practitioners citing the lack of development-ready buildings and affordable housing as critical barriers.
- Political interference—especially at the federal level—has grown significantly, with 60% of respondents reporting political challenges affecting economic development projects, up nine points from 2024.
- Community opposition is on the rise, increasingly obstructing projects and compounding existing infrastructure and workforce challenges.
Performance Metrics
- Success is increasingly being measured by net new jobs, capital investment, and number of companies served, reflecting a broader emphasis on outcomes over activity.
“Arizona’s economic development community is adapting to growing complexity—working across silos, navigating political uncertainty, and advancing innovative solutions,” said AAED President Jennifer Lindley. “This report provides an honest look at the hurdles and opportunities we must face together.”
The 2025 report is built on data collected directly from AAED members and offers actionable insights for policymakers, business leaders, and development professionals. It is designed to foster dialogue, inform policy, and advance sustainable, inclusive growth throughout Arizona.
About the Arizona Association for Economic Development
AAED, founded in 1974, has a mission to serve as Arizona’s unified voice for responsible economic development through professional education, public policy, and collaboration. For more information on AAED, visit www.aaed.com or call (602) 240-2233.
