Real Estate Job Engine Finally Slows Down
news.yahoo.com
By ADAM GELLER, AP Business Writer
Wed Dec 14,10:48 AM ET
NEW YORK - Ever since the labor market began improving 2 1/2 years ago, the housing boom has supplied an outsized share of new jobs. But if red-hot real estate is cooling, who will be hiring?
In fact, many employers will likely continue adding workers in 2006, but hiring will probably be spread more evenly across the economy than in the past few years, experts say.
Demand for construction workers, mortgage brokers and others could slow. Manufacturing jobs will probably decline. But a wide range of companies and industries will likely add jobs, including health care, accounting, engineering and other services.
"Job growth will generally be broad-based," said Marisa DiNatale of Economy.com, a research and forecasting firm. "We do expect total employment growth to slow down, but generally we still expect to see gains."
Employers could add 2 million or more new jobs in 2006, economists say, putting it roughly on par with the year just ending. The economy has gained 1.8 million jobs through November, and a total of nearly 4.5 million since the labor market reversed its decline in mid-2003.
Employers, faced with spiraling health costs, have been conservative about hiring. But as corporate worries about the price of energy ease, service businesses may be more willing to add workers.
"Manufacturing is still a somewhat difficult area, but services can make that up," said Jeffrey Joerres, president and CEO of staffing firm Manpower Inc. "We would look at it (the job market) and say, you know what, 2006 has the likelihood of creating as many jobs as 2005 did."
Even as companies like the major airlines and General Motors have been cutting jobs, a few industries have been the source of much of the nation's net job growth.
Housing and related industries have produced nearly one in four new jobs since 2003, DiNatale said. The largest number were in construction, which has added about 660,000 jobs.
There are some signs the hiring is moderating. But the pace of homebuilding and buying is still so strong, that some employers say they'll need new workers well into the new year.
"We have contracts on over 8,000 homes. They have to be built. I can't stop hiring," said Jon Downes, vice president of human resources for builder Toll Brothers Inc.
Housing is hardly the only industry that has been adding workers.
Health care, which continued growing during the recession, has added nearly 600,000 workers since the labor market began improving, a mix of both lower-paying and better paid jobs that should continue to multiply as aging Baby Boomers drive demand.
Temporary agencies have signed on 400,000 more workers, with caution by companies prolonging demand.
Restaurants have added close to 600,000 new workers since mid-2003. But the mix of new leisure and hospitality jobs could change in the coming year, with more hiring by hotels and resorts, experts say.
Demand is also strengthening for other types of workers.
Companies plan to hire 15 percent more new workers from the nation's colleges next year than in 2005, according to the National Association of Colleges and Employers. Those in the highest demand are students ready to work in mechanical and electrical engineering, accounting, business administration and finance.
That demand is evident at accounting firms like BDO Seidman, which plans to add 300 employees in the coming year after adding 400 in the past 12 months. The hiring is driven largely by the new laws requiring more thorough audits by public companies, said Tom Murphy, director of human resources for the company.
Demand for experienced accountants is as hot now as "what it was for programmers in the dot com boom in Silicon Valley," he said. "If you're somebody with five to 10 years of experience, you are getting weekly phone calls from a headhunter."
Still, for most workers, the job market is very different from what it was at the height of the economic boom. Most have seen their paychecks grow very slowly, even as inflation climbs and other costs, like health care and housing, have jumped.
That is likely to stay the case through much of the next year, in a continuing employer's market, observers say.
But if employers continue to add jobs the way they did in November — when 215,000 were added to the nation's payrolls — even that could change by a year from now, said Joel Naroff of Naroff Economic Advisors. By then, the unemployment rate, now 5 percent, could tighten.
"That would tell me," Naroff said, "that businesses are going to have to start bidding a little more for workers." |
