When it comes to the aerospace and defense sector, a new report ranks Arizona high for attractiveness, but the state’s ranking has dropped a bit.

PwC lists Arizona as 4th most attractive, behind Washington state, Texas and Georgia. Last year, Arizona ranked 3rd.

“These metrics change a little bit, you know, every year and these states are really competitive and really close,” said Scott Thompson, Aerospace and Defense Leader for PwC.

The rankings examined cost, labor, infrastructure, industry, economy and tax policy. Among the categories, Arizona’s highest score was "industry."

“We look at the breadth and maturity of the aerospace and defense industry and Arizona came out number five,” Thompson said.

Aerospace Manufacturing Attractiveness Rankings by KJZZ Phoenix on Scribd

The state ranked 10th in cost which included labor cost, energy cost, transportation cost, construction cost, and labor productivity. Arizona’s lowest ranking, 23, was in the labor category.

“We look at first of all total labor force, but also the quality of basic education, skilled education, advanced education,” said Thompson.

He said demand for commercial aviation is growing at about twice the rate of global GDP and aircraft production has increased about 50 percent in the past five years.

“So, we’re at record levels and in order to continue to grow and keep up with the demand companies are going to have to expand,” Thompson said.

The report said the outlook for defense contractors is strong as a result of increases in U.S. defense budgets and global demand.