Recession Check-In

We’re now 21 months into the recession, and some economists are pointing to September as the possible end date. Prognosticators have taken their fair share of criticism over the past 21 months, but my faith has been somewhat restored lately. IHS Global Insight early this year predicted that total employment in Austin-Round Rock would decline by less than one percent during 2009, and so far that’s looking like a pretty good bet. According to the August report from the Texas Workforce Commission (TWC), total nonfarm employment in Austin-Round Rock declined by 7,200 jobs, or 0.9 percent, between August 2008 and August 2009. Here are the talking points on specific sectors:

· Manufacturing and construction continue to bear the brunt of the recession here, like in many other regions around the U.S. Manufacturing employment in Austin-Round Rock totaled 51,600 jobs in August 2009, down 11.5 percent from one year earlier. Construction and related industries were down by 7.3 percent.
· Tech manufacturing continues its downward slide. Computer and electronic product manufacturing was down to 25,800 jobs in August 2009, a 13.7 percent decline from one year earlier. This is not a new story, so here’s some historical perspective: According to TWC’s data, the last time monthly employment in that sector totaled fewer than 26,000 jobs was October 1990. The peak was 49,900 jobs in January 2001.
· We must love our food and entertainment here. Despite consumers dialing back on discretionary spending, restaurants and bars added 2,400 jobs between August 2008 and August 2009, a 3.8 percent gain. Population growth can explain part of that increase, but I’m still impressed.
· Government spending may be propping up employment in other sectors (e.g., transportation, utilities), but it’s playing only a minor role in direct job creation. Total government employment in Austin-Round Rock grew by only 1,900 jobs, or 1.2 percent, between August 2008 and August 2009. Interestingly, local government added 4,500 jobs, while state government lost 2,500 jobs. Federal employment was virtually unchanged.

Reminder: We recently got a 2009Q3 update from one of our other data providers. So if you’re interested in the economists’ best guesses about which industries and occupations will lead us out of the recession, let us know. Brian Kelsey