EMPLOYMENT AT MID-YEAR
Metro Houston added 22,900 jobs in the first half of ’17, an improvement over the comparable periods in ’15 and ’16, when Houston posted significant losses.
The region will undoubtedly finish the year with net job gains, likely adding more than the 29,700 jobs in the Partnership’s original forecast, but still short of the long term average of 60,000 per year. How short? That depends on how the second half of ’17 plays out, whether current employment trends reflect a cyclical pattern or a fundamental restructuring of the economy, and how accurately the Texas Workforce Commission is measuring current employment trends.
Six sectors account for the bulk of job growth to date— employment services; manufacturing; food services and drinking places; arts, entertainment and recreation; health care; and other services. As a group, they’ve added 48,900 jobs through June. Three sectors account for the bulk of Houston’s losses—retail; transportation, warehousing, utilities; and wholesale trade. As a group, they’ve cut 27,800 jobs. Lesser gains and losses have occurred in other sectors. Energy remains an enigma.
SECTORS ADDING JOBS
Employment services (primarily contract workers) leads all other sectors, adding 10,600 jobs since January. That’s a near-record six-month performance. Employment services has added 16,000 jobs since June ’16. That is a record 12-month performance.
Gains or losses for the sector foreshadow gains or losses for the broader economy. In a downturn, firms lay off contract workers before cutting permanent staff. In a recovery, firms often hire contract workers to handle the increase in business, placing them on the permanent payroll as growth gathers steam.
Employment services has trended upward since November ’16 and now stands at an all-time high. In a normal recovery, growth should have plateaued by now, giving rise to gains in other sectors, but that hasn’t happened yet.
Two possible explanations:
• Employers still worry about the recovery’s strength and remain reluctant to move contract workers to permanent status, or
• A fundamental shift in staffing patterns is underway. Just-in-time inventory systems have been in place for years. Just-in-time staffing (i.e., reliance on contract
workers) may be the next step.
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