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QUARTERLY ECONOMIC REPORT
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ST. LOUIS OUT-PERFORMING NATION IN JOB GROWTH
By Bryan Bezold
RCGA Director of Research and Chief Economist
For the past three years, economists have struggled to explain
the much weaker than expected job growth following the 2001 recession. Compared with previous economic recoveries, 2002 and 2003 didn’t produce much in the way of job growth. Nationally, there was some payroll growth in 2004, but it was consistently below analysts’ expectations.
Looking at the St. Louis data, you’d never have guessed that national performance was still weak in 2004. In fact, when it comes to employment growth, 2004 will go down as one of the region’s strongest years in recent memory.
During the summer, employment growth was particularly strong. Employment in June, July, and August was at least 2.5 percent higher than those same months in 2003. At the same time, U.S. employment growth was about half of St. Louis’s (see chart).
Local employment growth had been accelerating prior to June, however. Year over year growth has been positive every month of 2004. Through August, local employment growth has averaged 1.6 percent. If that holds through the fall, 2004 would go down as the strongest year for employment growth in
St. Louis since 1997, when local employment grew by two percent. In St. Louis, employment growth averaged 1.2 percent during the 1990s.
Some perspective is probably helpful. 2004’s strong performance comes on the heels of three consecutive years of job losses in St. Louis; total employment fell by 0.9 percent in 2001, 1.2 percent in 2002, and 1.1 percent in 2003. The recession of 2001 hit this region hard. We weren’t alone in that respect, however. Many of the high flying regions of the 1990s suffered more than we did. Chicago, for example, saw employment decline by 0.5 percent in 2001, two percent in 2002, and 1.1 percent in 2003. San Francisco really took it on the chin, losing jobs at a rate of 2.6 percent in 2001, 6.3 percent in 2002, and 3.5 percent in 2003. So as difficult as the last three years have been for job seekers,
St. Louis was a relatively good place to be.
Unfortunately for Chicago and San Francisco, the recovery hasn’t taken hold in those markets yet. As of August, employment in San Francisco was up just 0.3 percent over last year, and year over year employment growth had been negative until June. In Chicago, August, employment was up just
0.2 percent over last year, and employment growth had been negative through May.
St. Louis hasn’t just out performed Chicago and San Francisco, however. According to the U.S. Bureau of Labor Statistics (which, incidentally, is the source for all of the employment figures cited in this edition of the Update), in July and August, Las Vegas was the only metropolitan area that added jobs at a faster rate than St. Louis.
What’s going on around here? After all,
St. Louis doesn’t have a reputation for being a high flying economy. But facts are facts, and right now they suggest that St. Louis fared better than many regions during the period of national employment decline, 2001-2003, and is currently out-performing the vast majority of metropolitan areas when it comes to job growth.
Looking more closely at St. Louis’s numbers, we can see some of the answers. Manufacturing, which employs about 12 percent of the region’s workforce, was actually up slightly in August, with employment up one percent over a year ago. Given recent headlines about the recovery of steel manufacturing in the Metro East, and Boeing’s announcement that they will add up to 800 new workers this year, that number makes sense, even though it bucks the national trend.
The region’s real employment powerhouse, though, is in the service sector. Professional and business services employment grew by seven percent from August 2003 to August 2004. Within that sector, the scientific research and development industry has grown from 1,000 jobs in 1994 to 6,000 jobs in 2004. Educational and health services are also up 7.47 percent over last year.
In some quarters, service jobs are derided as low skill and low wage, but that’s not the case with these jobs. Professional and business services include legal, accounting, and engineering. Educational and health service jobs include occupations such as doctors, physical therapists, and university professors.
What we’re seeing is the growth of a 21st Century economy, diversified between high-tech, globally competitive manufacturing and sophisticated services. |
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