The construction industry suffered disproportionate job losses during the course of the Great Recession as property values plummeted and the over-heated housing market contracted. An oversupply of housing in many parts of the country caused construction to shrink for several quarters even after other industries had begun to grow again. During the post-recession growth period, however, Idaho’s construction industry has outperformed the rest of the country, fueled by the state’s high rate of population growth and the associated demand for housing and commercial space.
Beginning in late 2007, construction in Idaho began to shed jobs at an alarming rate. The industry contracted by almost 24,000 jobs between October 2007 and March 2009 – about 42 percent of the industry’s total pre-recession employment. While construction suffered across the country, Idaho’s sufferings were particularly acute; the state’s 42 percent industry contraction dwarfed the 29 percent loss experienced nationwide. Continue reading
It has taken four years for the Idaho economy to approach the job levels it boasted before the worst recession in generations.
Total nonfarm jobs have been right around 100 percent of the monthly peak before the recession took hold in Idaho in 2008. Employers were also hiring at near their prerecession levels, but the activity has shifted among the industry sectors.
Projections by the Idaho Department of Labor indicate construction employment will grow 44 percent from 2012 to 2022, the fourth largest projected growth of any industry in Idaho and 28 percentage points above the projected growth for all industries. During that time, construction is expected to add 3,000 jobs and employ 10,000 people by 2022.
Through the early 2000s, construction was booming throughout the United States. As real estate became the golden investment with an A+ rating and home mortgages available at an all-time high, construction crews could not build houses fast enough. With some hard work and a little bit of luck, a young person straight out of high school could quickly make the kind of money typically associated with a four-year degree. As a result, laborers flooded to the market.
From 2000 to 2007, Idaho employment in the industry exploded, jumping 65 percent to dramatically outpace Idaho’s total employment growth of 19 percent. As banks continued to hand out mortgages to people who could not afford them, the housing market became saturated with available homes and the housing boom quickly turned into a bubble that popped as the first foreclosures hit the market toward the end of 2007, sending the economy into the deepest and longest recession the nation had seen since the Great Depression.
When real estate soured and the housing market dried up, construction jobs dried up with it.
Unemployment rates in Idaho and southeastern Idaho are far lower than four years ago. In June the unemployment rate in the seven-county region was 4.2 percent. In 2010 the annual unemployment rate stood at 7.4 percent.
Despite the substantial drop, the total number of jobs in the region has yet to recover to prerecession levels. According to estimates from Economic Modeling Systems International, there were 62,373 jobs in southeast Idaho in 2007. In 2013 there were 58,600, a decline of about 6 percent.
Some counties in the region saw increases. Bingham County gained 469 jobs, rising to 15,213 in 2013. Likewise Bear Lake County’s employment grew by 63 jobs from 1,634 jobs to 1,697. Caribou County grew by 99 jobs from 3,215 jobs in 2007 to 3,314. Oneida County posted a modest gain of 13 jobs to 1,118 and Power County also saw a limited increase of 45 jobs to 3,252.
Others did not. In Bannock County – the number of jobs fell by 4,214 from 35,161 jobs in 2007 to 30,947 jobs in 2013, a decline of 12 percent. Franklin County also experienced a 7.5 percent job loss of 248 jobs from 3,308 to 3,060.
Idaho’s job recovery began showing signs of life in late 2011 and picked up in 2013 when year-over-year monthly growth rates exceeded 2 percent, according to the Quarterly Census of Employment and Wages. In April 2013 Idaho had the third highest year-over-year job growth at 3.1 percent and the fourth highest in May at 3.1 percent.
Through the 12 months that ended in September 2013, Idaho recovered 21,000 of the 56,000 jobs it lost to the recession. While that recovery rate was 40th among the states, it underscored the slow job growth the state experienced during the first several years following the recession. Continue reading
Bannock County is trying to attract new businesses and help existing companies grow, but in order to regain prerecession employment levels, food and high-tech manufacturing payrolls need to expand.
The most recent unemployment statistics for Bannock County suggest the economic tide is turning in the Pocatello area. The seasonally adjusted unemployment rate in February was 5.2 percent, a tenth of a point below the statewide rate.
Still employment in Bannock County could be better. Through the recession and since, the total number of workers on the job decreased nearly 7 percent from 40,100 in 2007 to 37,400 in 2013.
While the recession is long over, its effects are lingering on some occupations. Economic Modeling Specialists Inc. reported in October that nationally some occupations were rebounding faster than others, specifically those in production. Using its data, Idaho turned out to be similar to the nation, showing that occupations in production rebounded the fastest.
Of the 760 occupations that EMSI estimates employment data on in Idaho, 246 fell by 10 percent or more between 2007 and 2009. Of those, 35 have shown at least a 10 percent growth in employment between 2010 and 2012. This is in contrast to what EMSI reported for the nation as a whole. Nationally, EMSI found only 181 occupations fell by 10 percent or greater and only 14 grew by that much.
Several of the occupations in Idaho had miniscule changes though. Only 15 occupations grew by at least 10 employees during the recovery. Just like the nation, the majority of these occupations in Idaho are in production.
The occupation with the fastest recovery was mining service unit operator, which grew over 30 percent – 11 workers – after the recession ended. Three rebounding occupations added over 100 during the recovery – electrical equipment assemblers, semiconductor processors and machinists. But all three occupations have more ground to cover to reach the highs recorded in 2007.
Almost all of the rebounding occupations required some duration of on-the-job training and paid between $12.18 and $22.57 per hour.
Notably missing from this list were construction occupations, which declined severely in Idaho during the recession but have yet to rebound in any great numbers.
Andrew Townsend, Regional Economist