Thursday, July 25, 2013

Iron County Economic Update

Iron County is still waiting for a full-fledged economic expansion. Recently released nonfarm job numbers find the county showing only a slight gain in employment. In fact, Iron County’s rate of year-to-year job growth has fluctuated around the no-change mark for more than two years. The highest increase since the end of the recession—just over 1 percent—occurred in September 2011. Plus, five months have actually showed declines. As of March 2013, Iron County registered a mere 0.4 percent year-to-year improvement in employment.

While employment levels remain fairly stagnant, other economic indicators show notable improvement—hopefully a precursor to an improved jobs picture.

Here are a few details:

  • Between March 2012 and March 2013, Iron County added only 60 jobs—a gain of 0.4 percent. To achieve full-economic recovery, Iron County should show a rate closer to 3 percent. All months in the first quarter demonstrated similar low-level gains.
  • In March, employment declines in three major industries put a significant drag on the economy. After expanding nicely earlier in the recovery, manufacturing now shows a 100-job loss. In addition, professional/business services dropped by more than 70 positions.
  • Many of these lost positions represent the loss of employment at temp agencies. Government (primarily on the local level—including public schools) dropped another 35 jobs.
  • Nevertheless, employment gains outweighed employment losses.
  • Private education/health care/social services added the most new jobs with other significant job contributions from leisure/hospitality services, construction, wholesale trade, and “other” services.
  • Although the county’s job gains during the past several years have proved tepid, its unemployment rate manages to edge ever downward suggesting workers have found jobs outside the county, moved or left the labor market.
  • Iron County jobless rate stood at 6.1 percent in June 2013—down more than a full percentage point compared to a year earlier. However, not surprisingly (given strong employment growth statewide), Iron County’s unemployment rate remains notably higher than the state average (4.7 percent).
  • Initial claims for unemployment insurance so far in 2013 are showing a downward trend—another positive trend for the economy.
  • The vast improvement in construction permitting during the first quarter of 2013 should eventually translate into continued vibrant increases in construction employment.
  • Following in the path of 2012, home permitting for the first three months of 2013 is up a whopping 650 percent. Of course, permitting is still down substantially from the boom years of the mid-2000s.
  • New nonresidential permitting values are also up substantially from the first quarter of 2012 (more than 1,000 percent). Approvals in the hospital/institutional and retail categories produced this vast improvement. Of course, keep in mind that it is early days yet in the permitting year.
  • Gross taxable sales continued its seven-quarter streak of year-to-year expansion with a 3-percent gain in first quarter 2013.
  • In addition, car sales continue to rally. Between first quarter 2012 and first quarter 2013, car and light truck sales increased by 14 percent marking the sixth straight quarter of gains.