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June job growth is the strongest in nearly 16 years

Kevin Schuler knows all about the ramp-up in hiring in the Buffalo Niagara job market, which had its best month in nearly 16 years during June.

Schuler, a vice president at LPCiminelli, said the Buffalo development company has about 15 percent to 20 percent more people working this summer than it did a year ago, in large part because of the flurry of activity at a handful of high-profile projects, including the SolarCity solar panel factory in Buffalo.

“There’s a lot of work right now that’s driving it,” Schuler said. “For us, right now, I’d say we’re probably bigger than we’ve ever been.”

And so is the Buffalo Niagara job market.

The region’s building boom helped spur the strongest wave of local hiring in nearly 16 years during June, and the second-strongest in the last quarter-century.

The region added jobs at a 2.3 percent annual pace, creating 12,700 new positions in the process, according to data released Thursday by the state Labor Department.

“My first reaction to all of this is ‘pinch me,’ ” said Gary Keith, the regional economist at M&T Bank. “I haven’t seen anything like this in a long time.”

In several ways, it was a milestone month for the local job market:

• It was the strongest job growth since a 2.9 percent annual gain in July 1999 and just the fifth time in the last 25 years that any month has had an annual growth rate of as much as 2 percent.

• Coming on the heels of the job market’s 2 percent annual growth during May, it marked the second straight month that the pace of job growth has topped 2 percent – something that hasn’t happened in 26 years.

• Job growth locally now has averaged 1.7 percent during the first half of this year, more than double the 0.7 percent increase in jobs the region experienced during all of 2014. If that pace continues through the rest of the year, 2015 would be the strongest year for job growth in the Buffalo Niagara region since 1989.

• The region’s slow but steady growth in its job market now has continued for 34 straight months – the longest period of uninterrupted growth since 1990, according to Labor Department data. The private sector, which excludes government jobs, grew by 2.8 percent over the past year and now has grown for 62 straight months.

• Hiring in the construction industry was especially strong, hitting a 25-year high during June. Hiring centered in the region’s construction industry accounted for one of every six jobs that were added during the past year. Major projects, from HarborCenter to the SolarCity solar panel factory and a flurry of them on the Buffalo Niagara Medical Campus, gave the region a handful of high-profile projects to supplement normal seasonal highway and building activity.

“The demand is picking up,” said Daryl Bodewes, the business manager for the Northeast Regional Council of Carpenters. “And we expect an increase as the year picks up.”

The increase in hiring sends ripples throughout the Buffalo Niagara economy, giving workers more disposable income, which in turn, generates increased sales for businesses that, in turn, may become more willing to increase wages or hire additional workers.

“The construction certainly is the rocket fuel,” Keith said. “But the disposable income that’s coming out of these jobs, that’s where you get the broader growth.”

Hiring also was robust in the financial services sector, which is rebounding from a four-year slump that began during the Great Recession, and in professional and business services. Hiring in a category that includes temporary help agencies also was strong, rising by nearly 12 percent.

The hiring also has been broad-based. Except for government, which has shed jobs because of tight budgets, every category of private sector jobs grew during the second quarter, Keith said.

Local manufacturers, which endured a decline that spanned more than three decades, also continued their slow rebound, adding 600 jobs over the past year. Since hitting an all-time low in 2010, the region has regained 3,700 factory jobs – a 7 percent increase over the past five years – that has pushed manufacturing employment to its highest level since 2008.

Compared with the rest of New York, the Buffalo Niagara region is a jobs hot spot. The region’s 2.3 percent job growth was the second-strongest among New York’s 15 biggest metro areas, trailing only the 2.8 percent growth rate in New York City.

Hiring by private sector firms, which exclude government jobs, was even stronger, with private sector job growth reaching 2.8 percent, also the second highest in the state behind New York City.

But the region’s job growth, though strong by local standards, is fairly average on a nationwide scale. The U.S. added jobs at a 2.1 percent pace during June, only slightly slower than the job growth locally last month, but it was the first time that the local expansion topped the U.S. pace since July 2011. The local job growth was slightly stronger than the statewide average of 1.9 percent. The data is not adjusted for seasonal factors.

“Two percent plus job growth is not the norm around Western New York or upstate New York,” Keith said. “When you’re over 2 percent, by anyone’s standards, that’s pretty good.”

The Labor Department report also indicated that job growth during May was slightly slower than the landmark pace that was originally reported. The Labor Department said the region’s job market grew by 2 percent during May – a figure that was slightly slower than the 2.3 percent growth rate that it initially reported. The revised data is based on more extensive data from reports that companies file with the Labor Department.