Anneliese Vance-Sherman is Employment Security’s regional labor economist for Whatcom, Skagit, Snohomish, King, San Juan and Island counties.
Washington state continues to march forward, leaving behind the economic downturn of seven years ago. King County, with 1.3 million jobs, has arguably led the statewide recovery, and continues to show strong year-over-year job growth in most sectors.
From February 2014 to February 2015, employers in King County created 41,400 jobs—an increase of 3.3 percent. The overwhelming majority of new jobs came from the private sector (38,600 jobs—an increase of 3.6 percent). All major industries expanded over the year, with the bulk of growth observed among service providing industries.
On a percentage basis, the industry that grew its labor force the most was construction. Over the past 12 months, construction industries collectively added 9,200 jobs or 16.4 percent—and gains were widespread, particularly among specialty trade contractors and building construction.
In terms of employment growth, the second highest growth industry was professional and business services. Professional and business services consists of a diverse set of niche industries, ranging from computer systems design and accounting services to management services, administrative support and temporary employment services. In short, professional and business services is the umbrella industry of businesses that exist because they support other businesses. Altogether, professional and business services contributed 8,600 jobs to the King County economy, growing 4.2 percent over the past 12 months.
On the surface, construction and professional and business services may not appear to have very much in common—apart from their high growth rates. But there is always more to the story.
As King County and Washington state fell into recession, these two industries were among those that endured the deepest proportional and absolute losses. Construction employers in King County shed an estimated 25,700 jobs from February 2008 or a staggering 35 percent. Professional and business services shed 21,700 jobs over the same time period—a loss of just over 11 percent. By comparison, the total loss of jobs across all nonfarm industries in King County amounted to 93,800 or nearly 7 percent.
Why did these two industries suffer such deep losses, and why are they expanding so rapidly at this point?
In short, construction and professional and business services are both very sensitive to the rhythm of the local economy—and it makes sense. Both are largely contract-based. Businesses tap into them to assist with capital investments and expansions, technological upgrades, and background operations that allow them to focus on their core competencies. When the economy started to turn sour, customer businesses withdrew contracts, held off on projects or found ways to bring some jobs in-house. More recently, as business has picked up across sectors and confidence has grown, customer businesses have resumed purchasing the specialized products and services offered by these two industries.
Once the economy began to rebound, confidence among employers began to increase and professional and business services was in business once again! Construction took a little bit longer, but is clearly undergoing a period of strong demand and high growth.
As we move forward in the recovery, I am watching these two industries carefully. Because they’re so deeply rooted in the plans and operations of other area businesses, they can provide early indicators about the state of the economy. At this point, both appear to be healthy and growing.
For more up-to-date information about local industry employment in Washington state and by county, go to our Labor Area Summaries page.