LV RESEARCH – JOBS

LAS VEGAS RESEARCH JOBS-

WHAT WE LOST!

We have September job numbers now, and they do show improvement in the Valley in most sectors, though not all. The job situation has been improving since April, but the job gains have been stubbornly slow, no doubt due to continued disruption of business as usual – and especially due to the disruption of the hospitality industry, especially in terms of conventions.

Comparing September job numbers to March numbers – the last pre-business closure numbers we had – reveals some surprises. The industrial real estate market, for example, is doing quite well in the Valley, so it is slightly surprising that the sector is still down 17,467 jobs, after losing 30,642 jobs from March to April. By comparison, the office sector lost 18,928 jobs from March to April, and in September is down 6,930. To put it another way, office has regained 63 percent of the jobs it lost, while industrial has only regained 43 percent of its lost jobs.

The retail sector lost 26,351 jobs between March and April, and is still down 8,653 jobs, regaining 67 percent of the lost jobs. Medical office lost 3,284 jobs between March and April, and is still down 846 job, regaining 74 percent of those lost jobs.

The industrial sector, which is seeing high levels of net absorption, has regained the fewest number of jobs among sectors. Note that these numbers are based on where people actually work, not on the classification of the industry in which they work – i.e. industrial jobs means jobs in industrial buildings.

The key weak spots in industrial jobs appears to be in construction; the Valley not only lost 7,100 construction jobs since April, it has lost 1,200 since May, when most industries began seeing job growth.

Specialty trade contractors are down 4,800 jobs since April, and 1,200 jobs since May; building foundation and exterior contractors are down 1,800 jobs since April, and 100 jobs since May; and building finishing contractors are down 2,100 jobs since April, but fortunately up 600 jobs since May. The numbers are better for manufacturing jobs and wholesale jobs, and much better for logistics jobs. This points to the bifurcation we have noted in the industrial world – between the massive logistics buildings that are in high demand and the smaller buildings occupied by small businesses. The transportation and warehousing sector lost 2,400 jobs between April and May, but has regained 5,100 jobs from May to September, meaning a net gain since the business closures.

The e-commerce businesses are hungry for workers to support the massive increases in online retail shopping that have occurred since the business closures. This is also good news for the industrial real estate sector in aggregate, as the occupancy of a 350,000 square foot logistics building displaces a whole lot of vacated 5,000 square foot light industrial units. The losers of this shift will likely be the office and retail sectors, who rely on paying customers to pay their rent, and who will have fewer industrial workers as paying customers until the economy sees some overall improvement.

Job gains have been stubbornly slow, no doubt due to continued disruption of business as usual!