There’s no question the Buffalo Niagara job market has slowed.
The question is how much.
Figures from the state Labor Department show the region’s job growth ground to a halt beginning in the late summer after steadily slowing throughout the spring and fall. But economists are raising questions about the accuracy of the data, pointing to an outsized drop of nearly 20 percent in the number of jobs in the administrative and waste services field.
The skeptics predict that the region’s job growth data will be revised upward when updated statistics are released in March, showing that the pace of job creation has slowed markedly over the past year, but still remains positive.
Regardless, the pace of that job creation has not been robust enough to make a meaningful dent in the region’s unemployment levels, which continue to hover around their highest levels since the early 1980s. The local unemployment rate in November of 7.9 percent was a two-year high and the third-highest for any November since at least 1990, without adjusting for seasonal factors.
The soft job market also has made a big impact on local wages, which are rising modestly again after stagnating during the recession and the early stages of the recovery. In 2011, the average job in the Buffalo Niagara region paid $41,193, up 2.7 percent from $40,095 in 2010, according to Labor Department data.
In the long run, however, Gary Keith, M&T Bank’s chief economist, said the Buffalo Niagara job market has held up fairly well since the recession began in late 2007. Erie County, for instance, has almost 1 percent more jobs now than it did heading into the recession.
“There are only a handful of places that can make that claim today,” he said. “Although it may not seem like it, relatively speaking, this is a fairly strong performance.”
But that’s not to say that there haven’t been some troubling signs in the Buffalo Niagara labor market since last fall. Job growth, which regularly ran at a better than 1 percent annual pace during the summer of 2011, has been slowing steadily for more than a year and turned into outright job losses as summer gave way to fall, although the accuracy of those figures has been questioned.
Overall, the local job market has been mixed, with pockets of strength interspersed with segments of weakness. Construction remains a bright spot, with employment in the building trades more robust than it’s been in 20 years. Manufacturing, long the region’s weak sister, also enjoyed a resurgence as factories bulked up work forces that had been depleted during the dark days of the recession.
The region added 1,700 factory jobs since 2009, reversing a decline that spans more than three decades, as local manufacturers rebuilt their work forces after slashing them deeply during the recession.
“There’s been a real pause in the downsizing of the manufacturing base,” Keith said. “That is something that’s a positive for us.”
That’s important because growth in other segments of the local job market, especially in service jobs, has long been canceled out by the steady decline in factory work. “For the time being, we’re in a stable position that will allow us to move forward without the headwinds and offset from the manufacturing sector,” Keith said.
That weakness primarily was centered in the local financial services industry, where employment has shrunk by 4.4 percent over the past year, and in hospitality, which was down about 2.1 percent after being one of the area’s bright spots for hiring in 2011.
Yet Buffalo isn’t alone in dealing with a sluggish job market. Job growth across upstate New York has largely been flat over the past year, said Jason Bram, a senior economist with the Federal Reserve Bank of New York.
“Unemployment remains at quite a high level, and this is an ongoing issue of concern,” Bram said.
Employment levels upstate still are almost 2 percent lower than they were at the start of the recession during the fall of 2007, Bram noted.
Trade skills needed
Local officials also have been paying more attention to a skills gap locally. With an aging manufacturing workforce, some local employers are saying they’re having a harder time finding workers with the trade skills needed to fill the skilled factory jobs that will be coming open. That skills gap has been a focus of the Western New York Economic Development Council, and efforts are under way to help local colleges, such as Erie Community College, develop training programs that are more closely tailored to the jobs that are expected to come open in the future.
“There is an educational component to unemployment,” Keith said. “Manufacturing will be more important to our future than it has been. Are we going to have a labor force that is able to transition to those opportunities?”
And after decades of manufacturing being viewed as a dying part of the local economy, job training officials believe new outreach efforts are needed to let students at the high school level and younger know that good-paying jobs are available in manufacturing and skilled trades.
“We need to bring the kids out [to local factories] and see what you can do and learn about the opportunities,” said State Sen. Patrick Gallivan, R-Elma. “We clearly have a lot of work to do.”
Keith agrees. “We need to have a focus on the skill sets that employers need. I think we’re in the early stage of that. Businesses are starting to speak up,” he said.
State job projections, however, don’t offer a cheery outlook in the years to come, with the greatest number of openings forecast in generally low-wage occupations, from cashiers and waiters to customer service representatives. The aging population also is expected to create a wave of hiring in better-paying medical occupations, from registered nurses and licensed practical nurses to home health care aides.