Excerpt from Newmark Grubb Knight Frank
Written by Bob Bach Director of Research – Americas firstname.lastname@example.org
With the U.S. labor market finally recapturing the 8.7 million jobs lost to the recession, now is a good time to examine which metropolitan areas are leading in job growth and which are lagging behind. Newmark Grubb analyzed 75 of the nation’s largest metros to determine (a) how far employment fell as a result of the recession, (b) how quickly employment bounced back, and (c) how many of them have, like the U.S., recovered all of their lost jobs and are setting new peaks—the net effect of (a) and (b). The table below ranks the 75 metros according to all three metrics, while the adjacent map displays item (c)—the current position of metro labor markets relative to their pre-recession peaks.
The map divides metros into four categories: fast growth (employment levels that are 3.0% or more above the pre-recession peak); above-average growth (0 to 3.0% above the prior peak); below-average growth (0 to 3.0% below the peak); and slow growth (more than 3.0% below the peak). Metro areas with employment levels below their prior peaks are said to be recovering, while areas that have established new peaks are expanding. The U.S. labor market has moved from recovery to expansion, but just barely.
Bakersfield ranks in the nations top 20 and is considered expanding with a 3.5% increase in employment above its prior peak.The fastest growing U.S. metro, by far, is Austin, with seasonally adjusted employment up a full 15.1%. That puts it well ahead of second-place Houston, which is up by 9.9%. Rounding out the top five are San Antonio, San Francisco and Grand Rapids, Michigan. The Texas markets and San Francisco are fueled by energy (pun intended) and technology, respectively, while Grand Rapids’ diversified manufacturing base has helped power that market into the top five.
At the other extreme, the five slowest-growing markets, counting down to the bottom, are Tucson, Greensboro—Winston-Salem, Las Vegas, Albuquerque and Wichita. The forces holding back these metros are varied. Tucson and Albuquerque are overshadowed by stronger neighbors in the Intermountain West, including Phoenix, Denver and Salt Lake City, which are more economically diverse and are attracting new households and businesses at a faster clip. In a similar vein, Greensboro—Winston-Salem is overshadowed by the nearby metros of Charlotte and Raleigh-Durham, which are booming. Las Vegas is still digging out from the housing bust, while in Wichita, manufacturing employment, dominated by small aircraft production, is mired near recessionary lows.
So, for the commercial real estate industry, one might say that job growth is necessary but insufficient. Landlords and investors also want barriers to entry, whether natural (e.g., San Francisco’s shortage of developable land) or manmade (e.g., Portland’s urban growth boundary) that suppress new supply and keep pressure on rents.
Metro Labor Market Performance During Recession and Recovery
Analysis of Payroll Employment Data from the BLS Establishment Survey
|Market||% Increase Trough to Jun 2014||Metro Rank Trough to Jun 2014||Jun 2014 % Change from Prior Peak||Metro Rank Change From Prior Peak|
|Broward Co., FL||10.1||28||-2.6||54|
|Fairfield Co., CT||7.4||48||-0.8||42|
|New York City||10.4||23||6.4||9|
|Orange Co., CA||9.3||33||-3.1||60|
|Palm Beach Co., FL||10.8||19||-2.6||55|
|Salt Lake City||12.9||7||5.7||11|
Source: U.S. Bureau of Labor Statistics, Newmark Grubb Knight Frank
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