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Housing, software fuel jobs resurgence in Western states

Robert Thomson got a 20 percent raise after starting in November at Richmond American Homes in Salt Lake City, eight months after landing a job at another builder. A year ago, he was unemployed.

“I feel much better than I did,” said Thomson, 33. “There’s a lot of construction, just a lot of things going on.”

Hiring by homebuilders and software and mobile application developers is helping the western third of the United States lead the nation in employment growth, according to Moody’s Analytics Inc. and IHS Global Insight Inc. That’s a contrast for the region, which has had the highest unemployment rates following the collapse of the U.S. housing bubble in 2006, with prices plunging in Las Vegas, southern California and Arizona.

Nevada’s unemployment fell 2.4 percentage points in the year ended November 2012, the most of any state, to 10.8 percent, though it’s still the highest in the U.S., according to the Labor Department. Joblessness in Arizona, California, Hawaii and Idaho are all down by at least 1 percentage point in the same period.

The national unemployment rate held at a four-year-low of 7.7 percent in December, according to the median projection in a Bloomberg survey before the Labor Department’s Jan. 4 figures. Employers added positions at about the same pace as in the prior month, showing the job market held up as lawmakers searched for a solution to break the fiscal impasse.

Among metropolitan areas with employment of 1 million or more workers, those in the West led in job growth in the 12 months through November, said Lee McPheters, research professor and director of the JPMorgan Chase Economic Outlook Center at the W.P. Carey School of Business at Arizona State University in Tempe. Houston topped the list followed by Phoenix, Denver, Seattle and San Francisco.

“We view the West as the nation’s most dynamic growth region,” McPheters said in an email. In 2013, Arizona, Utah, Texas, Washington, Colorado and California will be the strongest in the region in job growth and in the top 10 nationally, he said. Over the next five years, Texas and California will add more than 1 million jobs each, more than any other state, he said.

Other assessments buttress the strengthening outlook for the region. “The West has been outpacing the rest of the U.S.,” said Eduardo J. Martinez, senior economist at Moody’s Analytics in West Chester, Pa. “Labor markets crashed when the housing market crashed. Now we are seeing signs of housing prices and permit issuance swing from neutral to positive.”

Employment in the 13 most western states, including Alaska and Hawaii and excluding Texas, will rise 1.8 percent in 2013 and 2 percent in 2014, according to IHS Global Insight. That’s fastest among U.S. regions both years. Moody’s Analytics also said the area has the most favorable job outlook, and forecasts gains of 3 percent annually by 2015.

Raising many roofs

Homebuilders such as Toll Brothers Inc. and Beazer Homes USA Inc. are both benefiting from and helping to fuel the employment increases. Revenue doubled to $167.7 million in its five-state western region for the three months ended October, Horsham, Pa.-based Toll Brothers said Dec. 4.

The four-state western market for Atlanta-based Beazer Homes, rose 58 percent to $141.1 million in the quarter ended Sept. 30 from the same period in 2011.

The housing snapback has bolstered Arizona’s job market. The Phoenix area added 50,700 jobs in the year ended November, almost 11 percent in construction, according to the Labor Department.

Job hunters in California and Washington have also found opportunities in mobile technology, social networking and electronic commerce.

“Tech certainly is a driver for California,” said Gary Schlossberg, a San Francisco-based senior economist at Wells Capital Management Inc., which oversees $331 billion, noting in particular the mobile application industry in San Francisco.

“It’s one of the most dynamic areas,” he said. “Just look at the rents, and the restaurants at night, it’s all being driven by tech growth and the spillover from that.”

Other cities in the West are also benefitting.

“We have these nodes throughout the region where innovation is concentrated and not just Silicon Valley,” he said.

Kaiser Permanente said last month it is recruiting for an information technology center opening in January near Denver with plans to add 500 jobs such jobs in Colorado by 2015.

Las Vegas is becoming an emerging market for e-commerce with the relocation of shoe and apparel site Zappos Inc. and its 1,400 employees downtown from the suburbs.

The city had the second-highest growth in high-technology jobs in 2011 behind San Francisco, with much of that in e-commerce, according to a report by Jones Lang LaSalle Inc., a commercial real estate broker in Chicago. The report also cited Phoenix, Los Angeles and Orange County as emerging markets for high-tech jobs in the West.

That hiring ripples to retail and hospitality industries. Every technology job in a city creates five additional local jobs outside the sector, estimates Enrico Moretti, an economist at University of California Berkeley.

McPheters attributes the rebound in the West to population growth – domestic migration to states like Arizona and Nevada from California and the Midwest and international migration to California.

Phoenix, Denver, San Diego and San Jose, Calif., were among 15 cities adding the most people between April 2010 and July 1, 2011, according to the Census Bureau. That’s helping boost expansion at companies that put plans on hold when construction stalled and capital dried up during the recession.

RavenBrick, a Denver-based manufacturer of energy-efficient windows, plans to at least triple its workforce over the next year to 60 from 20 employees, said Alex Burney, the firm’s chief executive officer.

“Denver is an easy sell if you’re talking to a qualified person in Detroit or Toledo. Other cities can’t compete with the amenities here,” he said.

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