A new analysis of U.S. Bureau of Labor Statistics data finds the nation’s supply of retail jobs as of November 2012 off more than 450,000 from the same period five years earlier, those halcyon days now known as BTGR – Before the Great Recession.
How much did the bottom falling out of the housing market, the collapse of credit markets and widespread job cuts dent retail employment? Consider that just a dozen of the country’s top 102 metros have more retail jobs now than they had in 2007 and only a half dozen – Houston, New York, Oklahoma City, Denver, Raleigh and Austin – have added more than 2,000 retail jobs in that time frame.
Retail job growth can be an indicator of the economy’s growth since it is so heavily tied to consumer spending. Retailers added about 700,000 temporary jobs leading up to the 2012 holiday shopping season, a shade better than the prior year and a sign that while the economy is improving, it certainly isn’t improving enough to generate abundant consumer confidence.
The retail job gains come in metros with strong economies and heavy concentrations in sectors like energy and technology that are attracting new jobs and increased consumer spending. Need further proof? Look at a new analysis of private sector weekly earnings over that same time period.
In Durham NC, which is in the Raleigh metro, average weekly private-sector paychecks have shot up almost 48 percent since 2007. In Oklahoma City, they’re up by 19 percent from 2007, and in Austin, the increase is more than 16 percent. In Houston, average weekly wages rose a more modest 4 percent over the last five years, but at $940, that is still among the highest rate of any metro in the country.
The retail sector is also perking up in places that have made retail development a major component of their economy. In the McAllen-Edinburg metro, where average private-sector wages are up by more than 11 percent since 2007, the retail sector has added 1,100 jobs in that same period. McAllen’s location on the doorstep of Mexico attracts hundreds of thousands of cross-border shoppers every year.
And online retail, which now accounts for 7 percent of total retail sales, is creating new opportunities as well. Forrester Research forecasts that e-commerce will account for $327 billion by 2016, or 9 percent of total retail sales, and that 192 million consumers will make online purchases.
That e-tail growth is generating jobs and investment in locations with logistics-rich assets. In Kentucky, for example, the presence of the mammoth UPS Worldport cargo hub in Louisville has helped draw a string of distribution operations for e-commerce retail fulfillment, including Amazon,.com, Zappos Shoes and Chegg.com.
Where does the retail sector fit into your economic development strategy? Do you view it as a byproduct of overall job growth and investment or as a component of the industry mix in your region? Does e-commerce offer further opportunity for your region? Let us hear from you.