Latest Jobs Report Suggests Most Industries Recovering

by James Jones and Peter Fuleky, April 28, 2013 UHERO

Although slightly slower than in the second half of last year, conditions in the local job market continued to improve in the first quarter of 2013 according to the latest figures from the Bureau of Labor Statistics (BLS). The total number of nonfarm jobs in the state grew by 1.6% in the first quarter of 2013 compared to the same period last year; resulting in roughly 6,000 more jobs on Oahu and almost 4,000 more jobs across the Neighbor Islands.

Job creation picked up in a wide range of sectors, indicating that the recovery has spread beyond just tourism. Construction led the pack with industry payrolls expanding by almost 9%, adding more than 2,500 jobs compared to the first quarter of 2012. The local construction sector still has a way to go on the road to recovery but the outlook is encouraging; see our latest forecast for the details.  The broad leisure and hospitality sector continued to add jobs as the local tourism industry keeps breaking records; the sector added 1,800 jobs. There was also significant hiring in administrative services (which includes temporary staffing firms) and health care; each of the two sectors added roughly 1,700 jobs. The expansive “other services” sector that includes a variety of industries from auto repair to dog grooming also grew, adding almost 1,400 jobs.

A handful of sectors cut jobs, with the largest cuts occurring in the federal government. Federal government jobs in the state fell by 2.1%, a loss of more than 700 jobs. The data suggest most of the job losses were concentrated in ship building and other divisions within the Department of Defense (DOD). This was likely, at least in part, the result of a civilian hiring freeze and the layoff of temporary workers put into place in the run up to the “sequestration” budget cuts. While lawmakers in Washington continue to wrangle over the federal budget, it remains highly uncertain whether these jobs will return or if more layoffs will be coming. Defense officials have signaled that furloughs could be in store for DOD civilians later this year, though it’s unclear how many Hawaii workers would be affected.

After a strong year in 2012, retail hiring started off 2013 surprisingly slow with no new jobs created. Moreover, retail employees were working fewer hours: the average work week fell 4.3% from 32.1 to 30.8 hours per week. While it’s too early to sound the alarm, limited hiring and scaled back hours could indicate some potential weakness in the local retail sector. Perhaps consumers have started to cut back on spending in response to the expiration of the payroll tax holiday. Alternatively, visitors faced with higher room rates, or an unfavorable exchange rate in the case of Japanese visitors, may be opting to spend less at local retailers. Check back to UHERO as we monitor this and other developments in the local economy as they unfold this year!