January 22, 2010
State's jobs skid worst since "Boeing bust"
Seattle Times business reporter
Last year was the worst in recent history for job losses in Washington, the state Employment Security Department confirmed Wednesday: 106,200 jobs, or 3.6 percent of payroll employment here, were eliminated in 2009.
Those figures blow past the recession at the start of the 2000s and the double-dip recession of 1981-82. The last comparable downturn was the "Boeing bust" of 1970, when the state lost 5.3 percent of its payroll jobs, or 58,900 positions in that era's much smaller economy.
No industry has been hit as hard as construction, which accounted for nearly a third of all jobs lost in 2009. More than one of every six construction jobs that existed a year ago has vanished.
And the cuts are likely to keep coming. In a survey by the Associated General Contractors of America (AGC), which represents nonresidential builders, 47 percent of Washington state contractors said they expected more layoffs in 2010 -- the highest rate among the 29 states in the survey.
"It's bad, and believe it or not it's going to get worse," said David D'Hondt, executive director of the state AGC affiliate.
Commercial construction, which represented 40 percent of all construction nationally last year, probably will continue declining until the third quarter of 2011, D'Hondt said. The AGC expects Washington to track the rest of the country.
The bad news was self-evident in Wednesday's report, while one had to look closer for glimmers of hope.
Washington's unemployment rate, adjusted to reflect seasonal variations, jumped to 9.5 percent last month, as the labor force continued to shrink and 18,600 more people said they were out of work.
The state's jobless rate, while below the national rate of 10 percent, is the highest it's been since February 1984, when it clocked in at 9.6 percent. At that time, the state was coming out of the double-dip recession of the early Reagan years; by contrast, the current downturn is lingering like a bad winter cold.
Unemployment also rose sharply in the Seattle metro area, to 9.2 percent from 8.4 percent in November.
David Wallace, the state's acting chief labor economist, noted that November's jobless figures were revised lower, and that when looked at as a three-month moving average the payroll job losses are diminishing.
"We are still losing jobs, but we are losing them at a slower rate," he said.
Economists tend to put more weight on the nonfarm payroll numbers, considered more reliable than the unemployment rate. The figures are based on surveys of employers and individuals, respectively -- and not, as is often assumed, from counting how many people are receiving state unemployment benefits.
Last month, according to Employment Security, 334,270 people said they were out of work, and more than 287,000 people received benefit payments from the state. The other jobless people may not have qualified for benefits or used up their eligibility, a spokeswoman said.
Since Washington nonfarm payrolls peaked in February 2008, the state has lost 167,800 jobs, or 5.6 percent of peak employment.
Construction lost 55,700 jobs during that period. While all areas of the sector have been affected, residential specialty-trade contractors -- such as electricians and plumbers who work mainly on new houses -- were hurt the worst.
Workers on commercial projects, such as offices, condo towers and retail buildings, were less affected at first by the recession. But as those projects were finished, there were few new projects to take up the slack.
D'Hondt, of the Washington AGC, said the homebuilding collapse, the subsequent tightening of credit by banks, rising vacancies and falling lease rates all have cut into demand for new commercial buildings.
"At one time you could borrow 110 percent of a project from a bank," he said. "Now the bank will only lend 50 percent, and developers are having to personally guarantee the other 50 percent. As you can imagine, that brings things to a screeching halt."
There were a few bright -- or at least, less-dark -- spots in Wednesday's report.
Administrative and support services, a sector often considered a harbinger of employment gains elsewhere in the economy, grew by 1,200 jobs last month.
Unlike in previous months, all those jobs came in areas other than temporary-help agencies, an indication some employers feel good enough about their prospects to hire permanent support staff.
"I would like to see us gaining in both categories, but a permanent job generally is considered better than a temporary job," Wallace said.
Health and social services, which has proved the most resilient sector of the state's economy, added 500 more jobs.
The aerospace sector, which is concentrated in the Puget Sound region, gained 200 jobs.
And retailers added a net 400 jobs, which -- combined with the 500 jobs added in the leisure and hospitality sector -- suggests there are at least some people with disposable income who are finding ways to dispose of it.
But those gains were offset by cuts elsewhere.
Local governments cut 1,400 jobs, 500 of them in schools.
Manufacturing, despite the gains in aerospace, lost a net 400 jobs; financial services shed 800 jobs, while 400 jobs in the information sector vanished.
Clark County, across the Columbia River from Portland, notched the state's highest unemployment rate, at 14.3 percent.
Whitman County in Eastern Washington, home of Pullman-based Washington State University, had the lowest rate, 4.6 percent.
Drew DeSilver: 206-464-3145 or firstname.lastname@example.org
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