Jobs recovery likely to remain slow | nnbusinessview.com

Jobs recovery likely to remain slow

John Seelmeyer

Jonny McCreary, who works about as closely as anyone to the front lines of the labor market, has his fingers crossed that things will perk up for real sometime during the third quarter of 2010.

The question of employment growth carries more than academic interest as 2010 dawns. Large swaths of the northern Nevada economy everything from sales at little boutiques to purchases of expensive suburban homes depends on the regional economy’s ability to rebuild employment and create paychecks.

McCreary, whose LaborMAX staffing agency in Reno sends workers out to construction, production and other jobs every morning, continues to land new accounts as employers shed permanent workers and use temporary staff as needed.

The market for construction laborers remains crummy. But he’s starting to see some signs of life among manufacturers.

“There, I’m seeing more peaks than valleys,” he said.

Bill Anderson, chief economist for the Nevada Department Employment, Training and Rehabilitation, believes the peaks in job growth will be much smaller in coming years.

“We’re not going to see a replay of the boom-like conditions when Nevada would add 60,000 jobs year-over-year,” Anderson said.

In fact, he thinks the state still faces months of trekking through the valley of high unemployment.

When the state was deciding whether to increase the unemployment tax on employers this autumn, Anderson said he expects the jobless rate in Nevada to reach 14.5 percent in the spring of 2010. It stood at 12.3 percent in November.

And even in 2011, Anderson said, the unemployment rate could average 12.8 percent.

Just two years ago, the unemployment rate in the Reno-Sparks region stood at 4.8 percent, and more than 219,000 people were working. These days, employment has dipped below 200,000, and the jobless rate in the metropolitan area stands at 11.3 percent.

Those figures have fueled the sense of urgency in the economic development agencies that are charged with developing new jobs in the state.

The Reno-based Economic Development Authority of Western Nevada this month was working with 68 companies that represented as many as 4,400 new jobs for the region.

The authority’s top prospects could bring as many as 1,700 jobs, said Chuck Alvey, president and chief executive officer of EDAWN.

Among the region’s strengths: An abundance of available industrial space left vacant during the recession.

“There’s a lot of available square footage,” said Alvey. “We’re very competitive.”

But potential new employers are sometimes slow to make a decision, he said, because of their own uncertainties about the future of the economy.

In the Carson City area, the Northern Nevada Development Authority is working with employers that could bring as many as 6,000 jobs, said Rob Hooper, the authority’s executive director.

The jobs range from research to manufacturing, he says, and inquiries come from companies that are doing well despite the downturn as well as companies that look to develop a West Coast presence during an economic recovery.

While the migration of California companies remains an important source of employment growth in northern Nevada, Hooper said the region also is fielding more inquiries from Oregon and Washington.

Companies in the Northwest, he says, are looking to Nevada for a business-friendly environment.

The region scored a major win in 2009 when Northwest Territorial Mint, a company employing about 150, relocated to Dayton from the Seattle area.

But Anderson cautioned that the traditional engines for homegrown employment in Nevada gaming, tourism and construction aren’t going to pick up steam any time soon.

“Folks have learned their lessons,” he said. “Consumers have learned their lessons. Businesses have learned their lessons.”

All three major elements of the recession the residential slowdown, the freeze on lending for development and weak consumer spending hit Nevada harder than other parts of the nation.

Consumers spooked by the recession probably will be slow to return to their big-spending ways at casinos, resorts and other tourism destinations, Anderson said.

Slow consumer spending, he predicted, means Nevada will lag the rest of the nation during the recovery.

Construction probably will be slow to revive as well, he said. The state’s economy added 50,000 construction jobs from 1997 to 2007, only to lose a similar number in just the past two years.

“As long as that sector remains in the doldrums, that’s going to hold the economy back,” Anderson said.

But over the long-term, Anderson said Nevada’s basic strengths a good location, an attractive business tax environment are likely to keep the state’s economy among the strongest in the United States.


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