Improving Economy Changes Primary Race in Ariz.

Arizona took the recession and the housing crisis on the chin. Now that the state's economy is starting to recover, it has Republican presidential candidates talking about other issues.

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Tomorrow, voters in Arizona will also go to the polls. Like Michigan, Arizona was hit hard during the great recession with unemployment peaking at twice the national average. But its economy is starting to turn around.

And as NPR's Ted Robbins reports, that's changed the way Republicans are campaigning in the state.

TED ROBBINS, BYLINE: Here's what Arizona voters are hearing from the candidates. This is from the Republican debate in Mesa.

MITT ROMNEY: We have to have individuals that will stand up for religious conscience, and I did and I will again as president.

RICK SANTORUM: I supported No Child Left Behind. I supported it.

RON PAUL: You literally vote for abortion because Planned Parenthood gets the money...

NEWT GINGRICH: We have to generally worry about nuclear weapons going off in our own cities.

ROBBINS: What voters aren't hearing is much talk about a dismal economy, and there's a good reason why.

LEE MCPHETERS: The economy really picked up in the second half of last year.

ROBBINS: And Arizona State University economist Lee McPheters says the state's economy continues to improve.

MCPHETERS: So you've got an economy that has turned around. And compared to other states, we're doing pretty well. I mean, you would certainly not say Arizona's in your bottom 10, bottom 20 states.

ROBBINS: In fact, recent numbers have Arizona in the top 10 states for job growth in manufacturing, transportation and warehousing, even in construction. But the best sector for job growth, health care. Over the last year, health care accounted for a quarter of all new jobs.

MCPHETERS: From the lower skilled, lower paid jobs all the way up to neurosurgeons and to scientific researchers.

JASMINE BHATTI: Everyone that I know, they all have jobs.

ROBBINS: Jasmine Bhatti graduated from a nursing program last May. She's now working as an RN at St. Joseph's Hospital in Phoenix. The need is there because the massive numbers of people who've moved to Arizona over the last 50 years are getting older.

BHATTI: Obviously, we've got the generation of baby boomers coming in and they have the typical conditions associated with aging and chronic conditions.

ROBBINS: Health care job growth could slow, though, later this year when coming cutbacks in state aid to the poor kick in. Most of the gains in construction jobs are for large single projects like this senior housing going up in Tucson and the world's largest semiconductor factory, which Intel is building in Chandler.

Now, Arizona still has one of the nation's highest foreclosure rates. Half of all mortgages in the Phoenix area are under water. But there's even a bit of good news on that front. Investors seem to be buying up foreclosed properties and a recent report from Arizona State University says Phoenix home values are inching their way up again after hitting a low last September. ASU economist Lee McPheters.

MCPHETERS: This year, 2012 is going to be better than last year on every indicator. There will be more single family housing starts. There will be more home sales. There will be more jobs created. It's just at a very, very slow pace compared to what is average or typical for Arizona coming out of a recession.

ROBBINS: McPheters predicts that it will be two or three more years before the state's economy gets back to pre-recession levels. But there is no doubt Arizona's economy is slowly improving. That's changed the emphasis of the Republican primary campaign in Arizona. What's on top of voters' minds we'll find out tomorrow.

Ted Robbins, NPR News, Tucson.

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