Sunday, March 31, 2013

Georgia Employment grows in February (maybe)

On Friday, March 29, the Bureau of Labor Statistics published February 2013 employment data for Georgia.
In February, Georgia’s nonfarm employment, seasonally adjusted, increased by only 2,600 jobs. This resulted in a percentage increase over the month of only 0.065 percent, not enough to determine whether the increase was real or only a statistical variation in the sample data.
For state and sub-state data, changes in the sample are statistically significant only when the changes are 0.2 percentage points or greater. Georgia’s numbers in February were too small to meet this threshold and therefore could be characterized as “essentially unchanged.”
The February data reverses a prior three-month slow but steady gain in jobs after a burst of speed in October, the month just before the Presidential Election.
Table A. Georgia’s nonfarm jobs net change over the month

September            -3,000
October               25,900
November              6,200
December              7,800
January                  9,500
February                2,600

The most recent four months combined total (26,100 jobs) just exceeds October’s one-month jump of 25,900.
This cannot be attributed to normal seasonal patterns, as the data are already seasonally adjusted to account for this normal cycle of seasonal growth in October-December followed by a slump in January-February.
Over the year, Georgia has added 72,100 jobs, an increase of 1.8 percent. All of the net growth occurred in the private sector, which gained a total of 81,900 jobs for the past 12 months, as government jobs dropped by 9,800.
The Georgia data for February contrasts with the nation, which grew by 236,000 jobs, a statistically significant increase of 0.2 percent.
Georgia passes the 4 million jobs mark
If there is any bright note in the data, Georgia passed the 4 million job mark in February. The number is totally symbolic with no economic consequence, but worth noting anyways.
Georgia has not had more than 4 million nonfarm jobs in the state since early in 2009. It has taken the state four years to regain this position.
By Industry over-the-month
For February, the best performing sectors of the economy were the Information (2,500 jobs/2.5 percent), Professional & Business Services (3,300 jobs/0.6 percent) and Construction (600 jobs/0.4 percent) industries.
The worse performing sectors were Transportation & Utilities (-2,300 jobs/ -1.2 percent), State Government (-1,000 jobs/-0.6 percent) and Leisure and Hospitality (-1,500 jobs/-0.4 percent).
The Construction jobs growth is welcomed news to this struggling sector, where weather plays a major part in employment. It will take months of consecutive good numbers to revive this sector, which still posts roughly the same number of jobs it had in February 2012.
It is less clear why the Leisure and Hospitality sector took a dive in February, and we will have to wait and see if this is a one-time aberration of the preliminary data, or whether some deeper factors are at work in this sector that includes restaurant and hotel workers.
State and Local Government combined to a net loss of 2,000 jobs over the month., a trend which has become “old news.”
Annual growth – look to the Information economy
Since February 2012, the best performing industry has been Information. While only accounting for 2.6 percent of the state’s labor market, it has grown by 6.1 percent over the year.
Other exceptional sectors have been Professional & Business Services (4.9 percent) and Leisure & Hospitality (4.7 percent).
Losses continue at all levels of government. Federal jobs have declined by 1.9 percent, State jobs by 1.8 percent, and Local Government by 1.2 percent.
Over the past 12 months, State and Local Government lost a combined 7,800 jobs.
Manufacturing jobs continue to produce indifferent growth, increasing by only 1.1 percent over the year.

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Friday, March 22, 2013

Atlanta employment growth carries Georgia in January

On March 22, the Bureau of Labor Statistics released metro employment data for January 2013.
The Atlanta-Sandy Springs-Marietta metro area produced 8,400 of the 9,400 nonfarm jobs recorded for Georgia in January, according to preliminary seasonally adjusted results from the Bureau of Labor Statistics. Almost 90 percent of the net jobs created in the month were attributed to the Atlanta metro area, which comprises nearly 60 percent of the state’s nonfarm job market.
In January, the U.S. recorded 119,000 more jobs. In contrast, half of the state’s 14 metro areas grew faster than the nation’s rate of growth over the month, while the other half lost jobs.
Besides Atlanta, other metro areas with significant job increases included Athens-Clarke County (600 jobs), Dalton (600 jobs), and Hinesville-Fort Stewart (300 jobs).
Excluding the Atlanta metro area, the other metro areas in the state lost a total of 2,700 jobs over the month. The Augusta area recorded 1,300 fewer jobs, Savannah area lost 800 jobs, Columbus and Macon each lost 600, Brunswick declined by 500, and Rome area lost 400 jobs.
As a percentage of the labor market, Rome lost the greatest percentage, losing one percent of its nonfarm jobs, while Hinesville-Fort Stewart’s 300 job gain resulted in the greatest percentage increase at 1.5 percent.
While the 14 metro areas gained a net of 5,700 jobs in January, the rest of the state added 3,700 nonfarm jobs, which was a significantly better showing for the non-metro areas of the state.

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Georgia’s jobs becomes more urbanized

As might be expected, Georgia’s 1.8 percent jobs growth in 2012 (seasonally adjusted) did not come evenly to all parts of the state.
Over the year, Brunswick showed the highest percentage growth at 2.8 percent, followed by Rome at 2.6 percent. The Atlanta-Sandy Springs-Marietta metro area, which accounts for nearly 60 percent of the state’s jobs, registered an above-state average of 2.4 percent by increasing its jobs count by 55,000.
Georgia’s jobs become more urbanized
In December 2002, the metro Atlanta area accounted for 57.8 percent of the state’s jobs, while in December 2012, that percentage had grown to 59.7 percent, a growth of 1.7 percentage points.
When most state residents think urban, they think about Atlanta, but that describes only part of the state’s picture.
Interestingly, while the Atlanta metro area certainly made a large contribution towards that increasing urbanization; other metro areas in the state grew faster than the Atlanta area resulting in a growth of 2.2 percentage points. Areas like Savannah (up 13 percent over the decade) have certainly increased the urban-but-non-Atlanta-metro areas’ jobs growth.
Overall, 84.9 percent of the state’s jobs were located in the state’s 14 metro areas in December 2002. By December 2012, that percentage had grown to 87.1 percent.
Over the 10 years, the 14 metro areas combined added 165,300 nonfarm jobs, while the rest of the state actually lost more than 74,000 jobs. As the state moves towards having 90 percent of its jobs in metro areas, it raises questions about the future of those non-metro parts of the state.
By Urban Area: The ugly
Looking at individual urban areas, many of the areas that have shown the greatest 10-year growth actually reversed in 2012. Hinesville-Fort Stewart jobs declined 2.0 percent over the year, although it still shows a 24.2 percent growth over the decade. Similarly, Warner Robins jobs dropped 1.5 percent in 2012 while still posting a 20.2 percent growth since December 2002.
Several areas showed good growth over the year, but residents can be forgiven if they don’t feel immediate joy, as these areas are still down from their 2002 levels. Macon has lost 0.3 percent of its jobs over the past 10 years, and Brunswick has lost 0.2 percent leaving both areas feeling like it was a lost decade for them.
The most significant problem has been in Dalton. The area lost 1.3 percent of its jobs in 2012, which just amplifies its decade’s loss of 18.7 percent since 2002. There is an area that needs significant revitalization, and perhaps a rethink of its jobs base, to bring its jobs picture to where it stood at the turn of the century.
Table 1.
December 2012 Nonfarm Jobs in Georgia
Total Statewide                                3,988,200
Metro Atlanta                                   2,380,300
Metro-Non-Atlanta                          1,095,100
Rest of State                                         512,800

Georgia moves with the Nation

On March 18, the Bureau of Labor Statistics published its revised estimates for 2012 reflecting its annual benchmark processing, as well as updated seasonal adjustment factors. This gives us the most valid look at where employment in Georgia grew and declined in 2012.

Overall, using seasonally adjusted data, Georgia grew by 69,400 nonfarm jobs in calendar year 2012 for a growth rate of 1.8 percent.

The jobs story was one of slow recovery with much of that recovery being in job sectors normally associated with services supplied in urbanized areas.

Big contributors to the state’s growth were Professional and Business Services, up by 22,600 jobs (+4.1 percent); Leisure and Hospitality, up 17,600 jobs (+4.6 percent); and Education and Health Services, up by 14,800 jobs (+3.0 percent).

Percentage-wise, the Information sector had the largest increase, up 5.0 percent, but because of its small size, that translated into only 4,900 more jobs in the state.

The state was held back by declines in Construction (-4,200 jobs) and Federal government employment (-2,500 jobs). The biggest percentage loss was in Mining and Logging, which dropped 4.5 percent, but only by -400 jobs.

National Comparisons

Compared to the nation, Georgia’s job growth was slightly better than the nation as a whole, which grew by 1.7 percent in 2012. Georgia’s fastest growing sectors outpaced national growth. For example, while the Information sector in the state grew by 5.0 percent, nationally, the sector declined -0.2 percent.

Similar results occurred for Georgia’s other growing sectors where the state grew faster than the nation. In Leisure and Hospitality, the state grew by 4.6 percent while the nation grew by 2.7 percent. In Professional and Business Services, the state grew by 4.1 percent, while the nation grew by 3.2 percent; and in Education and Health Services, the state grew by 3.0 percent, while the nation grew by 2.1 percent.

Georgia remains an increasingly service-oriented state despite talk of new manufacturing. In 2012, the state added 6,100 jobs for a 1.7 percent increase. While that is a nice reversal of declines in recent years, the growth rate still fell below the state’s overall 1.8 percent growth.

It is fair to ask that if the state grew faster than the nation in several large sectors, why was its overall growth rate just slightly better? The answers are in Construction, which grew nationally by 1.8 percent, Financial Activities, which grew by 1.3 percent, and in government, where all three sectors declined slower than in Georgia. If the Construction sector had grown at the national rate, it would have added 6,800 more jobs to the state’s economy. Similarly, if State employment had maintained its national rate of zero percent change rather than a 1.5 percent loss, the state’s jobs total would have been higher by 2,700.

Not being able to grow Construction at the national rate due to the state’s slower recovery is a significant drag on the state’s economy.

It is also true that the state’s decision to continue to reduce state employment is slowing down the state's overall job growth.

To summarize, Georgia has done slightly better than the nation, but the state has not found a magic formula for job growth. While it improves, and that is welcome news, its success more mirrors the nation, than providing any path that others can emulate.

All of the state’s efforts at economic development have, so far, just kept it in line with everyone else.

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