LOS ANGELES-The recovering housing sector is reaching into several segments of the job market. That is according to a recent Marcus & Millichap Research Brief, which says that home sales and development will be a major engine of economic expansion in the coming months.
Residential contractors added only 900 positions last month, but payrolls have grown by 16,200 jobs year to date, the brief says. Home sales are also strengthening the finances of local governments, which added 13,000 workers in May and 19,000 spots so far this year.
Housing’s momentum occurs as manufacturing, which drove the early stages of the recovery, has started to sputter, according to Marcus & Millichap. The nation’s factories trimmed 8,000 positions last month, the only private-employment sector to cut workers.
Auto manufacturing remains a bright spot, the Research Brief says. Transportation equipment manufacturing payrolls inched up last month and auto makers reported higher sales earlier this week. An 11% rise in light truck sales can be partly attributed to the revival in home building.
Following the addition of 38,400 workers last month and a downward revision to April payrolls, full-time, office-using employment remains just 2% from pre-recession peak levels.
Through the first four months of 2013, more than 266,000 full-time office positions have been added nationally, accounting for more than one-fourth of all private-sector jobs created during that time, the Brief says. Growth in full-time office jobs has helped reduce the amount of under-utilized space and raises the probability that employers will expand their office footprints to accommodate additional workers.
This year, office tenants will absorb 98.3 million square feet of space to drive down vacancy 80 basis points to 15.9%. The gains in retail employment this year came not only from higher customer traffic, but also from the opening of new stores, according to the report.
More than 4 million square feet of space was absorbed in the first quarter, trimming vacancy at the nation’s shopping centers 10 basis points to 10.7% in the first quarter. Nominal construction, additional store openings, and the traffic and spending generated by a strengthening job market will tighten vacancy by 80 basis points this year to 10.0% and support 1.8% asking rent gains, the Research Brief says.
As reported earlier by GlobeSt.com, the small job growth indicated by the most recent Federal Bureau of Labor Statistics report might push the Federal Reserve to end its quantitative easing.