Thursday, February 7, 2008

Will The Pittsburgh Region’s Median Age Help Mitigate This Years Recession?

With Pittsburgh’s job growth anemic (900 jobs added December ’06 to December ’07) and little evidence the pace will pick up soon, what is keeping Pittsburgh’s job market one of the hotter markets in the country? Our definition of “hotter” is the demand local companies have for new qualified employees (replacement workers as well as newly created jobs) compared to what we are seeing in other markets around the country.

The answer lies in the median age of our population, ranked as number 1 or 2 in the country (Allegheny County median age as of 2000 according to the Census Bureau is 39.6 years compared with a national average of 35.3). We are in a situation, even with residents working longer into retirement years, where enough of our population is leaving the job market that it is creating vacancies, or opportunities, for those entering the job market.

So far in 2008 we are seeing job market demand in the hourly arena as good as it has been in the past 6 years. Coupled with a housing market that never boomed with many other parts of the country and therefore is predicted to continue slow growth (2007 home sales were up 8% in the Pittsburgh region) and a commercial construction industry entering a multi year period of high demand we have an opportunity to whether the latest storm as well as any metro in the country.

This isn’t to say there will be no pain. Our economy and many jobs in it, of course, are dependent on demand from outside our region. However the demographics that currently exist here will help keep demand for replacement workers high and possibly at a higher rate than job losses created by the recession nationally.

This could be a harbinger of what the national job market looks like as well. Baby boomers are just now starting to hit retirement age, and as the number of retirees increases, the demand for replacement workers will grow with it.

According to an article in the February 4th edition of Workforce Magazine by Gina Ruiz “Recruiters See Strong Hiring Ahead Despite Recession Talk”. The article goes on the quote Human Resource Managers as saying the outlook for hiring demand remains strong. Staffing firms, always the leading indicator of a coming rise in unemployment rates, have remained flat across the country over the past year maintaining strong numbers from 2006.

"We’re not getting a sense that there is an impending jolt in staffing employment," says Steve Berchem, vice president of the American Staffing Association in Washington. The telltale signs of an impending recession are not there, he notes. "We’re living in a very different world," says Francis Luisi, principal at Charleston Partners, an HR executive recruiting firm in Rumson, New Jersey. Factors such as employers with global vision and the millions of baby boomers reaching retirement age could make the traditional recession-related hiring slump less severe than in past cycles, he explains. "It is simply too early to speculate on what will happen," Luisi says.