According to a groundbreaking new report by the Common Sense Institute Arizona (CSI), Arizona’s manufacturing industry is on fire, with a staggering $77.6 billion in sales for 2022, up almost 40% from 2017.

LEARN MORE: Could Southern Arizona become battery manufacturing capital?

CSI is a nonpartisan research institute that uses precise econometric analyses to bridge the gap between economic development and public policy.

Manufacturing now accounts for around 9% of the state’s GDP and 6% of total employment, as Arizona experiences unprecedented growth. And while the state’s manufacturing boom happened earlier in the 2010s, the report shows that the passage of the Tax Cut and Jobs Act in 2017 sent the sector into overdrive.

“Policy is paramount when it comes to the manufacturing sector,” said Steve Macias, CSI board member and CEO of Pivot Manufacturing. “Our industry has a significant impact on the Arizona economy, with indirect and induced effects that far exceed what you might expect. We punch above our weight, and that’s why we need to pay close attention to the policies that govern our operations.”

The report highlights substantial foundational reforms that have improved Arizona’s competitive position for investment and job creation since 2011. This includes the “jobs bill” HB 2001, which created the Arizona Commerce Authority and reduced corporate income and business property taxes, among other measures. And it’s paying off, with 3.6% average annual manufacturing job growth since 2017, compared to just 1.5% over the previous six years.

Other key findings include the number of people directly and indirectly employed by Arizona’s manufacturing sector, which stands at a remarkable 633,565, or 16% of the state’s total workforce. And the industry’s share of Arizona’s economy is an impressive 19.4%.

“The impact of the industry on our economy is clear, with impressive job growth and revenue collections,” CSI Executive Director Katie Ratlief said . “It is important for policymakers to continue supporting the growth of the sector by creating a business-friendly environment through tax policies and infrastructure investments.”

Arizona’s manufacturing sector is a powerhouse that is driving the state’s economy forward, and it’s poised for even more growth in the years to come.