For the past year, the construction industry has been the main driver of economic growth in the state, accounting for a whopping 19. 4 percent of all...
For the past year, the construction industry has been the main driver of economic growth in the state, accounting for a whopping 19.4 percent of all new jobs. Not so in November.
In what may be a sign of an impending cooling in the state’s red-hot housing market, construction firms hired 400 new workers last month compared with 2,400 during November 2004 and notably less than the average 1,075 monthly gains of the past year.
Statewide, the economy remains strong, buoyed by hiring from a broad range of industries, the Washington state Employment Security Department said Tuesday. Payrolls expanded by 6,200 jobs in November, in line with average monthly gains the past year.
With more people looking for work, the state’s jobless rate remained unchanged in November at 5.6 percent.
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The slowdown in construction hiring, coupled with rising interest rates and double-digit appreciation in home values, has stoked fears that Washington may get caught inside a housing bubble.
The Office of Federal Housing Enterprise Oversight ranks Washington ninth among the 50 states in terms of annual housing appreciation, with home values jumping 15.6 percent in the third quarter.
“It’s hard to tell what’s going to happen,” said Rick Kaglic, chief economist at the Employment Security Department. “We’ll need a few more months of data to know if the long awaited slowdown is upon us.”
Homebuilders assure it’s not.
“If homebuilders have one complaint, it’s the backlog of work they’re facing, not a decline in demand,” said Sam Anderson, executive officer of the Master Builders Association of King and Snohomish Counties.
The more modest pace in construction hiring was felt mainly outside the Puget Sound region. Robust commercial development in the Seattle-Bellevue-Everett area last month helped create 1,000 jobs, almost double the average monthly gains seen during the past year.
Even if construction hiring tapers off, other industries such as aerospace, information technology and biotechnology would likely pick up the slack, economists said.
“There’s nothing on our radar screen to suggest job growth [in Washington] will slow next year,” said Keitaro Matsuda, senior economist at the Union Bank of California in San Francisco.
Matsuda predicted job growth next year should be about 2.5 percent. Statewide this year, employment has advanced by 2.7 percent, compared with 1.5 percent for the nation overall.
Driven by solid consumer spending, hiring in November was most robust among trade, transportation and utility firms — 2,100 new jobs, accounting for seasonal variations. Other big gainers were professional and business services (1,300) and education and health services (900).
The usually resilient information sector, which includes software publishers, telecommunications firms and Internet firms, was the one industry to lose jobs last month, reducing payrolls by 500 workers.
The Seattle-Bellevue-Everett area continues to drive growth across the state, accounting for 45 percent of new jobs. Although employment in the region is 25,000 jobs shy of its December 2000 peak, “the gap is steadily narrowing,” Kaglic said.
And fears of overbuilding to the contrary, real-estate development is likely to remain the growth engine in the Seattle area for some time.
“Every month, I think things have got to slow down, but I don’t see any indication of that for at least another 18 months,” said Kristen Scott, managing partner of architectural firm Weber + Thompson, whose staff this year went from 41 to 70 employees. “If we could find the right candidates we’d hire five more people right now.”
Josh Goodman: 206-464-3347 or firstname.lastname@example.org