Job Figures a ‘Home Run’ for CRE

WASHINGTON, DC-Yes the employment figures have been trending more positively for the last two months but the release of March’s figures on Friday by the Labor Department are particularly significant. The agency reported that the economy added 216,000 jobs, and that the unemployment rate declined to 8.8%, a two-year low. That number also represented a full percentage-point decline over a period of four months.

The figures are good news for the commercial real estate sector, Cassidy Turley’s Director of Research Kevin Thorpe tells me, for two reasons. First of all, there was a significant uptick in permanent hiring in March, compared to the temporary hires that have characterized past job numbers. Secondly, there are signs that the job growth is being fueled by actual job creation and not people dropping out of the job market from discouragement. “In terms of ongoing recovery for the commercial real estate sector this particular report was a home run,” he says.

In March there were 80,000 office workers hired, only 28,000 of which were temporary hires. That percentage - 36% - is far lower than the 90% that characterized much of 2010. “This is an extremely encouraging sign,” Thorpe says. “Businesses are gaining confidence in the recovery and there is nothing that correlates higher to net demand for real estate than permanent hiring.”

“Last year what we saw were people getting discouraged and dropping out of looking for work. Now we are seeing for the second straight month people reengaged in the job search. The recovery has become tangible enough for people to see work opportunities.”