As it turns out, the Buffalo Niagara job market held its own last year.
And that's a good thing.
New – and more comprehensive – data from the state Labor Department shows the Buffalo Niagara job market grew at roughly the same rate it has during each of the last six years during 2017.
Neither the 3,900 jobs that the region created last year or the pace of the expansion – averaging 0.7 percent a year – were eye-popping. In fact, our job growth last year – and during each of the previous six years for that matter – has been less than half of the nationwide increase in hiring.
But the revised data was a big relief in one important way: It showed that the Buffalo Niagara job market isn't losing steam – something that earlier, less detailed versions of the same data had shown was happening. The revised data showed that job growth across Erie and Niagara counties was twice as strong as the 0.3 percent increase originally reported.
Gary Keith, M&T Bank's regional economist, said last year's upwardly revised job growth isn't bad by Buffalo Niagara standards. "It gives us some more runway to keep growing," he said.
That's a good thing, because there's no question that the local job market is starting to run into some headwinds that are making it harder for hiring to keep up its current pace.
- Unemployment is hovering around 5 percent, which is within spitting distance of the modern-day lows in the low-4 percent range that were set more than a decade ago. Low unemployment means there are fewer available workers for businesses to hire, making it more difficult for them to add qualified employees.
- The region's population isn't growing, so unlike many other parts of the country, the Buffalo Niagara job market doesn't benefit from an ever-expanding supply of workers as more people move here. Even so, the fact that our population has stabilized in recent years is a big step in the right direction for an economy that had been battered by decades of steady population losses.
- The weakened Canadian dollar is putting a damper on cross-border shopping, hurting a retail sector that had come to rely on a steady stream of Canadian shoppers in search of lower prices in the U.S. The weak loonie makes it harder for those Canadian shoppers to find bargains here at a time when pressure from online shopping already is squeezing traditional retail.
- The construction industry, which had been a strong stimulus to the local job market since 2014, now is shrinking after big construction projects, from the Tesla solar panel factory to the new University at Buffalo medical school and Oishei Children's Hospital, largely wrapped up. After growing by more than 3 percent annually from 2014 to 2016, construction jobs in the Buffalo Niagara region fell by more than 3 percent last year.
John Slenker, the labor department's regional economist in Buffalo, said it's important to put the region's recent job growth in perspective.
The addition of 3,900 jobs in a single year may not sound like much, considering how fast the rest of the country is growing. But consider this: From 1997 to 2011 – a period that spans 14 years – the region didn't create a single additional job.
"We went from this stagnant, slowly dying area to one where the best description is that it's a little engine that could," Slenker said. "That's pretty remarkable."
Of course, the region's job growth still lags well behind the rest of the country, where hiring grew by 1.5 percent, or more than twice the local increase. That's a problem because it means there are fewer opportunities here for people to find jobs than in other places.
But it also reflects our stagnant population. Without population growth, the fastest a region can typically expect to grow is around 1 percent, Keith said. We're not far from that mark.
"Our labor force is really being stretched," Slenker said. "The baby boomers are retiring, and over the next several years, that will continue."
As a result, the Buffalo Niagara labor force has shrunk by nearly 5 percent since the end of 2009. The national labor force has grown by 5 percent during that same time, according to data from the federal Bureau of Labor Statistics.
"There really aren't too many available bodies who can fill our employment needs," Keith said. "You can hang a help wanted sign outside your business, but you'd better have the population to support it."
One encouraging sign, Keith notes, is that the flight of young people from the area – a key contributor to the Buffalo Niagara region's long period of population loss – has ended. The region's population of millennials – people between the ages of 20 and 34 – has grown by almost 18 percent since 2005, which is faster than the national average. The influx of young workers has helped offset the impact the wave of baby boomer retirements is having on the local labor pool.
"If we can grow at seven-tenths of a percent, given that we're at 5 percent unemployment and zero population growth, that's a positive to me," Keith said.