Monday, October 22, 2012

Brief Beaver County Update

When it comes to large construction projects in small counties, what goes up must come down. This pattern has certainly dominated Beaver County’s employment figures for the last several years. Construction jobs come in, construction jobs go out leaving the underlying trends in job-growth obscured. Indeed, if lost construction jobs are excluded from total job counts, the more stable part of the labor market is expanding. Unfortunately, construction spending and permitting also send ambiguous signals in other indicators. Here’s a short blow-by-blow account:
  • Overall, Beaver County lost 40 positions between June 2011 and June 2012—almost entirely the result of a 63 percent decline in construction employment.
  • Expansion in other sectors went a long way to offsetting the construction losses. The reopening of the copper mine contributed to the 70-position gain in mining. In addition retail trade and leisure hospitality services displayed notable expansions. In addition, covered agriculture added a notable number of positions which are not included in the nonfarm totals.
  • Take out the construction losses and add in the covered agriculture gains and Beaver County would have shown a net increase of more than 100 jobs.
  • Since unemployment rates are calculated by residence rather than by work-site, the loss of temporary construction jobs has not inflated the county’s unemployment rate. As of August 2012, the county showed an estimated unemployment rate of 6.0 percent—only slightly higher than the statewide average in August. Beaver County’s jobless rate has changed little since the beginning of the year.
  • Initial claims for unemployment insurance (when seasonal patterns are discounted) seemed to have settled at a low level.
  • Just as employment levels are dominated by large construction projects, so are construction-permitting figures. Nonresidential permit values accounted for a large increase in values in 2011 which was difficult to match in 2012. For the first six months of 2012, total permit values are down 36 percent. In actuality, that’s a fairly encouraging figure given the 113 percent value gain in 2011.
  • On the other hand, residential home permits continue to slide. Beaver County, like many of its smaller peers, hasn’t seen an increase in home permits since the recession began. Moreover, permits are down 80 percent for the first six months of 2012.
  • Gross taxable sales also reflect business-related investment related to construction. While most counties struggled through the recovery phase of the recession, Beaver County generated double-digit sales gains. However, currently, Beaver County is marking its fourth straight quarter of declining year-to-year sales.