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August 2, 2009
Even as experts start to believe the recession is ending, job seekers shouldn't get their hopes too high.
St. Louis won't see job growth until the second quarter of 2010, forecasting firm IHS Global Insight says, and even then it will take three years to replace all the jobs lost during the recession.
What's more, the new jobs that get created won't be in the same industries as those that were lost. Manufacturing, which has shed 16,000 jobs here in the past year, is expected to continue its long decline.
When job growth does begin next year, some of it will come from a completely predictable source: The federal government will be conducting the 2010 census. Bob Tomarelli, an associate economist with IHS Global Insight in Eddystone, Pa., says we'll also see strong growth next year in business services, education and health care.
Education and health care have been adding jobs even during the recession. Professional-services employers, a strong growth engine for most of the past two decades, have eliminated 7,400 jobs in the past year.
Because of the large number of corporate headquarters here, St. Louis actually has an above-average concentration of professional and business services jobs. We're also above average in education and health care.
Those are good things to be good at. "The metro areas that have been known for strong growth in recent periods all have strong allocations to the education, health and professional and business services sectors," Tomarelli said.
Manufacturing and financial services, on the other hand, are not going to be so healthy. When IHS Global Insight looks at the recovery on a state-by-state basis, Illinois is projected to have one of the most sluggish job markets. It's not expected to regain its pre-recession level of employment until sometime in 2015, a full three years after Missouri.
The very things that once made Illinois great — a major financial hub in Chicago and a heavy manufacturing base downstate — are handicapping it now. Financial companies "still face a lot of uncertainty," Tomarelli said, and the economy will continue its long-term shift from manufacturing to services jobs.
The manufacturing slump has made this recession especially difficult for St. Louis, with Chrysler closing its doors and many auto parts suppliers following suit. The silver lining, if one exists, is that St. Louis now is slightly below average in its dependence on manufacturing.
"That's the upside," Tomarelli said. "St. Louis doesn't have an overdependence on an area that is expected to be suffering. The (St. Louis) economy is structured in a beneficial manner now."
The problem, of course, is that those former factory workers still need to find jobs. When major structural shifts occur, the unemployment rate can remain high for years as workers have difficulty shifting into new occupations.
Tomarelli said St. Louis' unemployment rate, currently 9.9 percent, could get to 10.5 percent or higher before it starts falling. Even as late as 2014 or 2015, he said, the national unemployment rate will probably remain between 7 and 8 percent, compared with 4.9 percent at the beginning of last year. He didn't have projections for St. Louis that far in the future, but our jobless rate usually isn't much different from the nation's.
Each percentage point of unemployment means approximately 1.5 million Americans, or 14,000 St. Louisans, who want jobs but can't find them. This recession will continue to take a human toll, then, long after it is officially over.
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