Labor Market Update for the
Pacific Northwest
September 2007
This article includes excerpts from the
Fall 2007 edition of Applied HR Strategies' HR
Intelligence Newsletter.
Northwest
Labor Markets Healthy
Recently released data for June 2007 shows unemployment rates of 4.9% and
5.1% respectively in Washington and Oregon. Washington’s bottomed at 4.4%
the late spring, but as job growth has slowed, the rate has crept up. The
national unemployment rate was 4.6% during the same period. Metro areas
are stronger, with the Seattle at only 3.9% unemployment in July, while
the Portland area was at 4.8% recently.
No doubt, job
growth is slowing, especially outside of the major metro areas. In
Washington, year-over-year growth is at only 1.8%, after 2.5% to 3.5%
growth for most of 2005 and 2006. In both states the metro areas are
growing faster, in numbers and percentages, than in the less urban areas. The IT and technology areas are the strongest overall in terms of
percentage job growth. Aerospace growth has slowed, but it’s been strong
for some time. Seattle area job growth is 3.8% year over year (July to
July).
The housing markets
are finally slowing down in the Pacific Northwest after being
substantially stronger than the US as a whole for the past two years. Even so, construction employment was 3.7% higher in Washington over the
past year, although that seems certain to slow. It remains to be seen if
the housing slowdown will have a substantial impact on the regional
economy. Most economists seem to think there will be some slowing in the
regional economy, but few are predicting a recession beginning anytime in
the next year or so.
Most economists
have been predicting slower job and economic growth in 2007 for some time,
and it appears to have arrived. Still, the northwest economy appears a
bit healthier than the national one, at least in the Puget Sound region,
where many employers continue to report difficulty in hiring skilled
workers, especially experienced technology professionals, just about
anything engineering-related, and in the accounting and finance areas.
While wage growth
has been very strong in some hot areas, Applied HR Strategies continues to
expect wage growth to moderate in throughout the year, even in most “hot”
areas. Nationally, wage growth in technology has already started to slow
somewhat.
Washington State Firms Rake in Venture Capital
Venture capital (VC) investments in the state continue their strength,
virtually ensuring that the already tight tech labor markets will continue
for a while, at least. In the second quarter of 2007, $300 million in
venture funding flowed into WA State companies, mostly in the software,
internet or health-related companies. VC funding is an important leading
indicator of labor market demand and thus is an important metric is
gauging labor market demand, since much of the invested dollars go towards
maintaining labor pools and hiring new talent. In the second quarter,
Washington ranked third overall in dollars invested (behind California and
Massachusetts). The only other western state to break the top 10 was
Colorado.
Most analysts and
VCs report that current funding levels are healthy and sustainable, at
least for now. Few think that we are approaching “bubble” levels, such as
when VC investments went through the roof in the late 90s, leading to a
huge “pop” and a dramatic drop in funding in the early 2000s.
-
Doug Sayed, Applied HR
Strategies
Base
Salary Increases in the Pacific Northwest Outpace Other U.S. Regions
Our annual survey of base salary
increases reveals that most IT, technology, and life science organizations
in the Pacific Northwest plan to award U.S. employees with pay increases
at a slightly higher rate (4.0%) than companies located in other regions
of the U.S. (3.9%).
 Applied HR Strategies
(AHRS) is a Seattle-area HR and compensation consulting firm
devoted to helping growth-oriented companies compete within the strong
base of technology focused organizations in the Puget Sound region.
Culpepper has partnered with Applied HR Strategies to publish reports
analyzing compensation trends and practices in the Pacific Northwest.
|
