Economic conditions in Idaho were strong through September, a trend that began in early 2010.
Commercial Vacancy Rates
Commercial real estate is a good indicator of whether employers are expanding or businesses are starting up or contracting or shutting down.
According to Reis Inc., a commercial real estate research firm, vacancy rates in the Boise metro area – the only area in Idaho with data – remained high through 2013. The retail market hovered around 18 percent compared with 9.5 percent throughout the country’s western region and 11 percent nationwide. Office vacancies were slightly lower, lingering around 17.5 percent to essentially mirror the 17.7 percent regionally and 17.1 percent nationally. Boise’s downtown core has a significantly lower vacancy rate at 10.6 percent than the outlying areas with 22.5 percent.
Projections by the Idaho Department of Labor indicate construction employment will grow 44 percent from 2012 to 2022, the fourth largest projected growth of any industry in Idaho and 28 percentage points above the projected growth for all industries. During that time, construction is expected to add 3,000 jobs and employ 10,000 people by 2022.
Through the early 2000s, construction was booming throughout the United States. As real estate became the golden investment with an A+ rating and home mortgages available at an all-time high, construction crews could not build houses fast enough. With some hard work and a little bit of luck, a young person straight out of high school could quickly make the kind of money typically associated with a four-year degree. As a result, laborers flooded to the market.
From 2000 to 2007, Idaho employment in the industry exploded, jumping 65 percent to dramatically outpace Idaho’s total employment growth of 19 percent. As banks continued to hand out mortgages to people who could not afford them, the housing market became saturated with available homes and the housing boom quickly turned into a bubble that popped as the first foreclosures hit the market toward the end of 2007, sending the economy into the deepest and longest recession the nation had seen since the Great Depression.
When real estate soured and the housing market dried up, construction jobs dried up with it.
August and early September were the wettest since 1953 in eastern and southern Idaho, and the heavy rain caused flash floods and other problems in several communities. Agriculture was hit hard.
An economist from the University of Idaho Extension Service estimated damage to crops at over $230 million.
Much of the barley and wheat in eastern Idaho was ruined or damaged by the heavy, sudden rains. Downpours caused sprouting and added moisture to the kernels, making it unsuitable for anything other than livestock feed.
The biggest demand for workers in south central Idaho is in the second half of the year when weather is more certain. Two-thirds of all part-time and full-time job listings with the Idaho Department of Labor are placed from July to December – a favorable time of year encompassing crop harvests that underpin the regional economy as well as being conducive to completing construction projects. Retail picks up with back-to-school and the Halloween, Thanksgiving and Christmas seasons.
The department’s job listings for south central Idaho have been increasing since the end of the recession as demand picked up from existing businesses that froze payrolls during the downturn and from new and expanding companies.
Information provided in this article has been gathered from various sources throughout the state, including local newspapers and other media.
- The Wayne Brown Institute, a Salt Lake City venture capital accelerator focusing on technology companies, wants to increase its presence in Idaho. The accelerator wants to add up to 40 Idaho mentors to counsel new entrepreneurs and find more startups seeking venture capital funding. The institute is a nonprofit accelerator that has helped companies raise more than $8 billion including acquisitions and stock offerings since 1983. President Brad Bertoch said its model works because its mentoring program for startups is not just free consulting but a short-term, focused program to help companies appeal to venture capital investors.
- Nowhere in the United States does it take less money to join the top 1 percent than in Idaho. Business Insider, which weighed household income data from the 2012 American Community Survey to estimate the income requirements necessary to reach the top 1 percent, found it takes just $274,000 a year to be in Idaho’s top 1 percent. Montana was next at $280,000 followed by New Mexico at $286,009 and Wyoming at $295,000. At the other end of the spectrum, it takes $688,000 a year in Washington, D.C., to make the District’s top 1 percent, $642,000 in Connecticut, $511,000 in New York and $504,000 in New Jersey. California ranked eighth at $433,000. Idahoans have a head start in reaching the Top 1 percent. According to calculations by the Business Insider, 14 states have a lower median household income.
Ethan.Mansfield@labor.idaho.gov, regional economist
(208) 332-3570 ext. 3455
Idaho’s official unemployment rate fell steadily during 2013, while the rate of workers faced with underemployment edged up.
Over 11,000 workers found jobs in 2013 including 3,000 new entrants to the labor force, driving the official jobless rate down over a percentage point to 6.2 percent. At the same time, the number of workers considered underemployed rose by almost the same amount, pushing underemployment up more than a full point to 18.2 percent, a reflection of a persisting rise in part-time jobs and the dominance of service sector employment since the recovery began in 2010.
The combined unemployment and underemployment rate for the state was 24.4 percent, up four-tenths of a point from 2012.
Idaho’s economy has generated about 16,000 nonfarm jobs in 2013. Health care, manufacturing, leisure and hospitality and construction were the most expansive sectors, accounting for 64 percent of the growth. The majority of jobs in every case were in southwestern Idaho, the state’s population center.
The biggest share was in manufacturing, which generated 16.5 percent of the new jobs, with durable manufacturing carrying the load. Since wages are typically higher in durable manufacturing than nondurable, those new jobs accounted for two-thirds of the $300 million in new wages that sector provided. The opening of the Chobani Greek yogurt plant in Twin Falls boosted nondurable manufacturing.