Posted: 11/04/2006 14:00:05

TUCSON, Ariz. (AP) -- The Arizona-Sonora regional economy is improving but persistent weaknesses hamper its competitiveness with other border regions, according to a new study.

The 2006 Arizona-Sonora Regional Economic Indicators report is based on a University of Arizona analysis in five areas -- competitiveness in NAFTA and global markets, cross-border economic interactions, performance of leading industry sectors, development of the "knowledge-based economy" and quality of life.

The states of Arizona and Sonora are measured jointly relative to other U.S.-Mexican border regions.

"We have seen improvements in the short term. However, the longer-term trends in the region relative to our position are declining," said Vera Pavlakovich-Kochi, director of the regional development program for the UA's Office of Economic and Policy Analysis and one of the study's authors. "In the longer term, we still see the region has persistent weaknesses."

The biennial report, released Friday, found the region's competitiveness in both NAFTA and global markets improved, border ports increased trade and became more specialized in electronic equipment and machinery, and the region retained its role as a leading gateway for Mexican agricultural products to enter U.S. and Canadian markets.

The only indicator showing no improvement over two years ago was Sonora's maquiladora sector, which grew at the slowest pace of Mexico's border states.

Arizona and Sonora are lagging behind other border-state regions in measures related to the knowledge-based economy, said Bruce Wright, UA associate vice president for economic development.

The two states have been working together to find ways to resolve conflicts between open trade and immigration and security concerns.

Arizona's strengths in high-tech areas can be used to support emerging Sonoran activities that will be a benefit to both states, Wright said. The region is in a transition period economically as more high-tech industries are starting to emerge and change the nature of industry in the two states.

Information from: Arizona Daily Star, http://www.azstarnet.com

(Copyright 2006 by The Associated Press. All Rights Reserved.)

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