Tuesday, January 10, 2012

The More Things Change ...

Nobody can deny that the past five years have been revolutionary for Southern Nevada's economy. The region took a trip from the economic heights down to the economic gutter, and along the way the very face of the region’s employment changed … well, not much, actually.

Let’s take a look at the employment picture in December 2005 using the numbers from NDETR. Assuming a group of ten workers, those workers would fall roughly into the following sectors:

They're smiling because they have no idea what's about to hit them.

And now for something completely different … Southern Nevada’s workforce distribution in November 2011.

They're smiling because they still have jobs.

Shocking, isn’t it.

Of course, this is just looking at the percentage of workers in each of these vaguely defined sectors. In essence, the workforce has made a very tiny shift from construction into healthcare. If we get a bit more precise, we see the following fields expanding - Government (+1%), Healthcare (+2%), Hospitality (+3%), Retail (+1%) – while Construction (-7%) and Office (-1%) - i.e. financial, real estate, professional and business services - shrank. Industrial employment didn’t budge as a percentage of the workforce.

The view is a bit less rosy when we look at actual jobs, of course, and that’s what really counts. From December 2005 to November 2011, Southern Nevada lost 92,000 jobs. The big loser was construction, which jettisoned 64,000 jobs (more than that, really, since construction jobs had not hit their peak in December 2005). The total number of jobs also declined for industrial, retail, office and hospitality (but only by 1,700 jobs). Two sectors managed to increase employment – healthcare (up 13,700 jobs – nothing shocking there) and government, which despite recent job cuts still employs 1,200 more people now than it did then with not many more citizens to serve and a bit less economic activity to support it.

In plain terms, jobs translate into bodies in warehouses, offices and shops, and bodies need a place to be productive. Thus, jobs equals demand for commercial real estate. If you want a crystal ball into the future performance of CRE, just watch for the next jobs report.

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...