Orange County bosses have cooled their hiring activity to the slowest pace in five years.
Can this economic chill be blamed on the weather?
Yes, we are still talking growth, but my trusty spreadsheet tells me for the past six months, year-over-year job increases have run at a pace below 25,000 new employees or 2 percent growth.
On one hand, that’s not shabby when you consider that since 1990, Orange County’s historical average job growth pace has been is 1 percent a year.
On the other hand, the last time growth was this slow was five years ago as the recovery from the recession was just beginning. In between, local bosses averaged 39,300 new jobs a year, or 2.6 percent yearly growth. Since September, new jobs were created at a 21,000-a-year pace.
One explanation I’ve heard around town for the moderating staffing plans is the weather. I’m often suspicious when companies blame what is a regular occurrence — changing weather — on poor results. But five years of drought did end suddenly, so I could see a stream of storms becoming a jolt to the system.
I created a yardstick for local jobs possibly impacted by weather — tracking employment in construction, retail and hospitality — to study this thesis. Building is tough in the rain, and folks don’t shop or entertain as much in inclement weather. It’s an Orange County workforce of 460,000, no small sample.
In the past six months, these rain-sensitive businesses added workers at a 6,000 a year pace. That’s the slowest since 2012 and almost two-thirds less than the 16,400 a year pace of the four years ended in September 2016.
So if industries that suffer in bad weather were pulling back on hiring, what about other Orange County employers?
The remaining private industries — employing 965,000 — added workers at a 12,200 a year pace since September vs. the 20,000-a-year hiring pace in the previous four years.
Yes, it’s a cooling but not as steep a drop as those found in rain-sensitive industries. So perhaps the wet weather played a part in the current dip in job growth.
Just a part.
Because two noteworthy job market changes are likely not weather-related: the virtual halt in Orange County hiring in professional/technical services and healthcare.
Gone is the significant creation of white-collar office jobs at firms specializing in the likes of law, architecture, engineering, accounting, and consulting. These employers had been adding workers at a 4,200-a-year pace the previous four years. Same for healthcare, which was growing at 6,400 jobs a year.
It’s a curious sign of corporate hesitancy when you consider various measures of CEO optimism that have been on the rise since businessman Donald Trump won the White House. Is the radical change Trump speaks of worrying certain CEOs? You know the grand healthcare debate could give a medical boss reasons to hold staffing stable.
And look at the big picture: National business output, as measured by gross domestic product, started 2017 with the slowest growth in three years.
So, now that the sun is shining once again above Orange County, we get to see if the blame-the-weather excuse for a hiring slowdown is all wet.