Labor Market Update for the
Pacific Northwest U.S.
June 2008
This article from the Summer edition of Applied HR
Strategies' HR Intelligence
Newsletter highlights labor market conditions in the Pacific
Northwest US.
Pacific
Northwest regional labor markets off slightly, but still more healthy
than nationally.
Recently released data shows slight job losses in Washington
State and Oregon, in both cases less than the previous month. April
unemployment rates of 4.8%, 5.5% and 3.1% respectively in Washington,
Oregon and Idaho, up only slightly (0.1% in most cases) from late 2007.
Regionally, as job growth has ground to a halt, job losses have remained
small, and less in April than in March, which was the first month of
declines in most states. The star of the region though remains Idaho,
despite its unemployment rate shooting up to a still extremely low 3.1%
in April (from only 2.7% in November).
Metro areas remain stronger, with the Seattle at only 3.5% unemployment
rate, seasonally adjusted, and actually below rates in late
2007. Year-over-year job growth of 2.0% in Seattle isn’t bad either,
considering the national economy. The Portland area was also below the
state’s overall unemployment rate at last check. In general, urban areas
are stronger than less populated areas.
Housing markets have slowed down in the Pacific Northwest but remain
substantially stronger than the US as a whole for the past two years. It
still remains to be seen if the housing slowdown will have a substantial
impact on the regional economy. Most economists assume there will be
some slowing in the regional economy, but there is no clear evidence
that the area is in a recession, despite an obvious slowing of economic
activity. Most regional economists are less sanguine than a few months
ago, but few are claiming that we’re in a recession right now. Oil
prices also remain an unpredictable wild card for the economy.
Despite the relative
regional strength, slow job and economic growth for the remainder 2008
is still likely.
Even though the northwest economy is healthier than the national one (WA
Stage GDP was the third strongest in the nation in 2007 and early 2000),
it doesn’t mean we’re “out of the woods” yet. Despite this, even in
today’s weaker economy, many employers continue to report difficulty in
hiring some skilled workers, especially experienced technology and
engineering professionals, and in the nursing/health care, accounting
and finance areas.
Applied HR Strategies continues to
expect wage growth to moderate in throughout 2008, even in the “hot” job
categories.
Nationally, wage growth
in technology has already started to slow. We also expect merit
budget to drop slightly during the year from 2008 predictions made
in the second half of 2007.
The
Seattle area ranks third in venture capital
growth over the past decade.
Venture capital (VC) investments in the state continue strong,
and the Seattle area is the third fasting growing region in the past
decade according to a recent report. The two fastest growing areas, New
Mexico and Pittsburgh, are much smaller in terms of dollars invested, so
they have more room to grow faster. Of course, the 800 pound gorilla
remains California, but the Puget Sound region is stronger.
Investments in the area have remained strong in early 2008, although
slightly below last year’s level, virtually ensuring that the relatively
tight tech and related labor markets will continue for a while, at
least. The areas doing well recently are software, biotech, wireless,
and “clean” technology, such as biodiesel.
Most analysts and VCs believe that current funding levels are healthy
and sustainable, barring a major hit to the economy and/or equity
markets. This should keep the regional area from any near-term
significant drop-off in labor demand in technology oriented industries,
like what happened in the 2001 – 2002 period.
-
Doug Sayed, Applied HR
Strategies
 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.
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