Coos County, an Economic Update
As the wet months of winter and early spring fade behind us and last year’s economic data have been checked and rechecked, now is a good time to take a look at Coos County’s economy. Usually, we analyze business activities on the basis of business type and ownership – is the business owned by private individuals or is the activity one that government oversees? For example, we typically look at private schools and health care providers separately from public providers. However, since the services and workforce needs are the same, we could view these private and public entities as a combined category. In other words, all education and health-related work is grouped together regardless of whether services are provided by the county’s healthcare districts and public schools or by individuals running their own businesses. Coos County’s Industry Sectors from a 30,000-foot Perspective Grouping similar businesses allows us to analyze the county’s economic sectors by function. This is particularly useful when our educators and labor market planners want to see which business areas have the greatest number of workers – and where there might be future job opportunities or training needs. The graph below shows this 30,000-foot view of Coos County’s industry sectors by function. Nearly 60 percent of the county’s employment in 2016 occurred within three industry sectors. Coos County’s education and health services accounted for over 27 percent of county employment. This includes not only professional staff (e.g., teachers, physical therapists, etc.), but also the office staff, grounds crews, and others who work for these business entities. The second largest industry sector in our area is trade, transportation, and utilities; retail trade accounted for 66 percent of the jobs in 2016. Coos County’s leisure and hospitality sector employed more than 2,600 people in 2016 and is the third largest industry sector in our area. Not surprising, job growth is expected to be strongest in the largest sector: education and health services. Also projected to offer employment opportunities are manufacturing; leisure and hospitality; professional and business services (this includes staffing agencies, call centers, as well as accounting offices, etc.); and trade, transportation, and utilities. Workforce Characteristics of Some Industry Sectors It may seem odd that manufacturing, which only employed 7.7 percent of the county’s workforce in 2016, would rank second in anticipated job growth. This can be explained, in part, by looking at the age-related characteristics of this industry’s workforce. It has been said that “demographics are destiny” – for some of our businesses, that is true. Education and public administration (government) have the oldest workforce members with 36 percent of those employees being age 55 or over – in other words, one out of three workers is within 10 years of retiring. In addition, roughly 9 percent are already over age 65! Manufacturing workers also tend to be older; 28 percent are age 55 or older. All of these industries offer opportunities that often require not only post-secondary education or training but also on-the-job experience. These people will likely be difficult to replace. The other end of the spectrum are those industries offering more entry-level positions. For example, one out of every five workers in leisure and hospitality – the basis of much of our tourism, is under the age of 25. It is easy to see that many of our youth find their first jobs in this seasonal and dynamic industry. Retail trade, also a source of many jobs, has a younger workforce. Although 16 percent of workers are under the age of 25, one-third of retail workers are under the age of 35. These large business sectors offer many job opportunities at the entry-level and provide important experience for those new to the workforce. Joined at the Hip: Construction and Housing From an industry viewpoint, construction work falls into one of three categories: construction of buildings (29% of the industry’s workforce), heavy and civil engineering construction (27% of the workforce), and specialty trade construction (44%). Job activities, skills required, wages, and availability of workers varies depending on the category and specific building project. Although there are some entry-level employment opportunities, the construction industry encompasses a wide-range of highly skilled occupations. This is clear from the age breakout of this industry’s workforce: 26 percent of workers are within 10 years of retirement; only 8 percent are under the age of 25. Coos County’s construction industry saw its peak employment levels in 2006 through 2008, just prior to the Great Recession. Construction employment opportunities shriveled up, as evidenced by the lack of building permits issued for single-family residential homes. This decline in building permits, coupled with a slow-down in previous years, laid the groundwork for limiting current and future housing options as well as employment opportunities for construction workers. Sixty-seven percent of Coos County’s housing was built prior to 1980. An Economist’s Standard Approach: Supply and Demand When we talk about an area’s economy, we always seem to end up talking about supply and demand. From a workforce perspective, we have data from the Oregon Employment Department’s recent vacancy survey which tells us that businesses continue to have unmet needs for skilled workers. Our demographics reveal that we can anticipate many retirements within the next 10 years – retirements that will likely remove the county’s most experienced and skilled workers from the workforce across nearly all industries. As is typical in rural Oregon, Coos County relies on in-migration to maintain and grow the region’s population. Yet recently, school enrollment figures show an increase in student numbers. This represents potential demand for goods and services as well as future members of our workforce. Economic capacity-building is often characterized as the dynamic exchange between identifying demands, inventorying supplies, and characterizing and implementing effective and efficient means for developing infrastructure and workforce supplies to meet the demands – stay tuned, there are challenges and opportunities ahead!