Labor market and economic conditions for Benton and Franklin counties in 2014 showed significant growth in nonfarm employment and improvement in the labor market.
Economic conditions are showing movement in business confidence for hiring, as well as more workforce confidence to get hired.
The Tri-City area’s total nonfarm payroll employment increased for 21 consecutive months, reaching a 5.2 percent growth in December, with an unemployment rate at 8.8 percent, according to preliminary, not seasonally adjusted, estimates by the Bureau of Labor Statistics.
Local employers added, on average, 440 jobs per month in 2014, which is second best to 2010, for the past 14 years. Knowing that the majority of the growth in 2010 was driven by Hanford’s funding of $1.9 billion from the American Recovery and Reinvestment Act, we certainly can call 2014 job growth in the Tri-Cities successful. This is not just because of firmer and constant job growth; it has also been widespread, led by an increase in manufacturing, construction, education, health care and leisure and hospitality.
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Average nonfarm employment for the Tri-Cities increased 1.6 percent per year since 2009, which is above the state’s increase of 1.4 percent per year.
From 2013 to 2014, employment in both goods producing industries (7.5 percent growth) and service providing industries (2.8 percent growth), has been reflective not only of local population demand and economic stability, but national and state stability as well.
Construction employment is highly seasonal. However, it has stabilized in the past year as confidence of investors and home buyers improved. Construction employment is still below 2007 levels, but it increased by 3.1 percent over the year, which brings its five-year average annual growth to 0.1 percent and positive.
However, residential and commercial building permits were down in 2014, while the value of permits was up. In return, local median home prices continued to appreciate at 2.5 percent per year for the past 10 years.
Manufacturing has grown the fastest in 2014 at the rate of 11 percent, which brings the five-year average annual growth to 3.7 percent. Manufacturing jobs are becoming more diverse; however, the base is still in food processing as we see increased demand for specialty food products on the retail market.
Trade, transportation and utilities have seen steady growth in jobs during the past five years, with 2.3 percent growth per year. This specific industry cluster continues to expand in response to the population growth, as well as growth in the agricultural and manufacturing industries.
Retail trade makes up 67 percent of the employment in this industry cluster, and it has had 1.4 percent growth per year since 2009. Retail activities continue to increase in response to the area’s rapid population growth and improved economic stability.
Total private and public health care makes up 14.8 percent of total nonfarm employment in the area, with a five-year average annual growth rate at 3.1 percent. Local health care services are becoming a regional hub by bringing in more specialized services that were not accessible before.
Educational services, both private and public, have been expending at the rate of 2.1 percent a year since 2009. Total educational services make up 8.7 percent of the area’s nonfarm employment. Many school districts are working on facility expansions, renovations as well as building new facilities to accommodate growing demand.
In response to the growing wine and agricultural industry in the area, as well as the Tri-Cities being one of the fastest-growing communities, the leisure and hospitality industry grew by 5.6 percent over the year, with five-year average annual growth to 2.5 percent.
Improved business confidence brings in more employment opportunities to the local workforce. During the year, the civilian labor force increased by 740, where the number of unemployed decreased by 15.7 percent and number of employed increased by 2.1 percent. This has driven the Tri-City unemployment rate down by 1.4 percent in 2014. The labor force comeback is expected to continue into 2015.
Increasing business confidence and improving market profits, along with increasing workforce and consumer confidence, should lead to greater consumer spending and more diverse job growth in 2015.