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Kansas City’s Employment Picture is Mixed

January 11, 2013

Data released this week by the Bureau of Labor Statistics (Current Employment Statistics) gives us a look into the Kansas City metro’s employment situation. The release has data through November, but even though there is a month to go, we can safely say that 2012 will not go down as a robust year for employment in the area.

Total non-farm employment in the region grew by just 2,400 between November 2011 and November 2012, an increase of 0.2 percent. For comparison, the nation’s employment grew by 1.4 percent over the same period.

There is a silver lining to this data. To find it we need to look at the employment change by industry.

Nov12MSAEmpChangeSource: Bureau of Labor Statistics (CES)

The sharp increase in the professional and business services industry is the most eye-catching aspect of the chart above. The growth in this industry more than offsets losses in mining, logging and construction (mostly construction in our case) and information.

The decline in construction does seem strange given that the region has had some positive signs in that area. Residential building permits in the first 11 months of 12 are up 54.5 percent compared to the same period in 2011. Residential construction value is up 61.5 percent. Non-residential construction is also up, albeit at a lower (4.9 percent) rate.

The professional and business services industry is a broad industry that includes three categories: professional, scientific and technical services; administrative, support and waste management; and other professional business services. Looking at each of these categories in the chart below, we see that the growth is not evenly distributed. The vast majority of the employment gains lie in the professional, scientific and technical services industry.  This industry includes positions such as engineers, lawyers, computer services, accounting and advertising services. These are generally high-skilled, high-paying jobs. These are the jobs that regions across the country — and across the world — are trying to attract because they bring with them higher wages and typically help attract even more positions for talented workers. The fact that we are experiencing significant growth in this industry is at least one positive sign we can take away from this data.

Nov12MSAEmpChangeProfBusSvcsSource: Bureau of Labor Statistics (CES)

 

These numbers do get revised as new data becomes available. We should see any revisions in the release of the January data, which will be released in early March. We will take another look at this data then.

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