Arizona's economy is improving, but a local economist says growth remains slower than pre-recession rates.

The growth rate is about two percent a year, which is about half the average rate between the years 1975 and 2007, said George Hammond, associate director of the Economic and Business Research Center at the Eller College of Management.

"The growth rate is by and large lower than we're used to here," he said.

Job growth is continuing, but largely in the lower-wage areas such as transportation, leisure and hospitality industries, Hammond explained. While job growth is expected to increase in 2014, Hammond said he thinks it will level out in 2015 and after that the growth will be in service industries, such as health care.

"We're really struggling to find our feet after the great recession," he said.

The housing market continues to affect the state economy, a reason Arizona saw some of the biggest economic declines during the recession.

Arizona home prices are increasing by about 18 percent, which Hammond said is about twice as fast as the rest of the country. But new residential building permits, which virtually stalled during the recession, have yet to return to their pre-recession levels. In fact, he said, they are about what they were in the mid 1970s.