LOS ANGELES—In April, both private sector and government agency job creation sped up and payroll gains have reached the highest levels in two years, according to a research brief from Institutional Property Advisors. In total, 288,000 jobs were created in the month of April alone. Although GDP growth in the first quarter was weak, the report notes that these job gains cast a positive outlook on economic expansion for the year.
Job growth was seen in almost all sectors, but a few stood out. Professional and business services sectors produced the most job growth with 75,000 new jobs. The strong commercial real estate development industries led to a boost in construction positions. Those industries produced 32,000 new jobs. Manufacturing industries produced 12,000 during the month, and an increasing in retail spending has led to significant store openings and job growth in the retail sector. The information sector, primarily media positions, was the only sector to see job loss in April.
These job gains mean that all of the office-using jobs lost during the recession have been gained back, while some sectors, namely the financial sector, have not yet reached its pre-recession jobs peak. On the opposite end, the government is slowly adding new positions, lifting its former two-year ban on hiring. Government employers created 15,000 jobs during the month of April with local governments contributing the most new jobs. Overall, the government created 68,000 new jobs in the past year.
This is really good news for the office real estate sector, which is still recovering from the recession. In a recent exclusive interview with GlobeSt.com, Oliver Fleener, SVP of PM Realty Group forecasts 50,000 new jobs will be created in the next five years and bring office vacancy rates to single-digit numbers. He explains vacancy rates will drop to 9.9% by 2016, leading to a rental rate increase by as much as 40% by 2019.