Tri-Cities commercial permits up in Q3, growth rate leads E. Tenn.

Tri-Cities new commercial construction permits are showing a steady improvement from a disappointing performance last year with a growth rate that has led East Tennessee so far this year.

Tri commercialAccording to The Market Edge’s Q3 Building Permit Trend Report 178 new permits were issued  in Q3, compared to 159 during the same period last year. The year-to-date total – 351 permits – is 10.7% better than the first nine months of 2014 and are 1.9% ahead of the 2013 Q3 pace.

Market Edge President Dale Akins cautions that the “commercial building permit trends are actually NOT a reliable “trend indicator” due to the differences in how commercial construction projects are permitted. For example: permits for a 200 unit apartment complex could be issued as 1 permit, 1 permit per building, or 1 permit per unit, depending upon the requirements of the local code enforcement office.” However, the report does provide a benchmark to monitor commercial permits across East Tennessee.

The bulk of the quarter’s growth came in the region’s two largest counties with Sullivan County running slightly ahead of Washington County in both the number of permits for the quarter and year-to-date growth. So far this year permits are up 14.8% over last year in Sullivan while Washington Co. TN permits for the first nine months of the year are 13.2% better than last year.

Permit value in Sullivan County – $82.7 million – also lead the region. Washington County was a distant second with $43.5 million closely followed by Washington County VA – $30.2 million and Greene Co. – $29.2 million.-

Greene County hasn’t kept pace with last year’s year-to-date construction but did see a slight increase in the number of Q3 permits.

Greene, Scott and Washington Co. VA are all lagging the year-to-date permit total from last year.

The year-to-year permit growth rate for the Tri-Cities has also consistently outperformed the Chattanooga and Knoxville regions so far this year.

When compared to year-to-date total Tri-Cities permits were up 10.7% compared to 5.9% in Knoxville. Chattanooga has seen a 14.1% declined so far this year when compared to the same period last year.

Third quarter permit were up 11.9% in the Tri-Cities compared to Q3 last year.

The Knoxville region saw an 11.1% Q3 increase from last year while Chattanooga permits were 27.3% lower in Chattanooga than they were in Q3 last year.

Sept. sees Tri-Cities jobs gains; softer employment performance

Sept yy jobs emp ch

Clicking on chart renders larger version.

Employment showed some year-to-year softness in the Tri-Cities in September while year-to-year nonfarm job creation was up. Overall it was a positive month for the local labor market. Employment and job growth have been positive since March when compared to the same months last year.

September was the 28th straight month for year-to-year nonfarm job growth. Employment was up for the eight month, but the pace for both components has lagged since this year’s April-May growth peak. The preliminary September unemployment rate for the region, its two MSAs was unchanged from August.

Compared to September last year, there were 1,100 new jobs in the three-county Johnson City MSA and 1,700 in the four-county Kingsport- Bristol MSA. Those are preliminary, non-adjusted numbers. Expect some adjustment next month. For example, the August nonfarm jobs were adjusted down by 200 in both MSAs.

The region is slowly gaining on its pre-recession jobs level, but it’s not there yet. When compared to a September 2008 pre-recession benchmark the region is down 600 nonfarm jobs. The Johnson City MSA remains the hardest hit area. It’s down 900 jobs from the pre-recession benchmark, while Kingsport-Bristol has added 300 jobs.

The picture isn’t as bright for employment. Compared to September 2008 Tri-Cities employment is down 18,647. The Johnson City MSA is down almost 11,000 while Kingsport-Bristol is down almost 8,000.  The long-term trend picture using a 12-month-rolling average to take the noise of the monthly fluctuations show a steady, sharp increase that began in January peaked in April and May then began ebbing. In September the raw employment number and the rolling average were almost equal. From that perspective, employment is has bottomed out of the slump that began in late 2011.   It was during that slump period the data from the jobs and employment numbers were in opposition – nonfarm jobs were being adding but the household survey showed employment declining. That situation caused ETSU economist Dr. Steb Hipple to question the accuracy of employment data on the local level. Dr. Hipple is also a research associate for the Bureau of Business and Economic Research. So far this year the three-month moving avg. of nonfarm job and employment has been positive since March.

There are two primary labor market reports each month. The first is the payroll survey, and it’s just that. It’s a survey of employers about how many people are working and in what jobs.  This survey is the larger of the two reports and considered more accurate. But it’s not available on the county or city levels. It also doesn’t get an accurate count of self-employed and contract workers. Nonfarm jobs are the primary number from the payroll survey used in this report.

The second report is a household survey. It focuses on localities, how many people are working and how many who are looking for a job. It’s the report that drives the monthly unemployment rate. The household survey is a smaller sample so its accuracy is at its best on the national level although it is reported on the county and city (above 25,000) level. The U3 unemployment rate – the most used unemployment rate – has also been criticized because it over-reports the status of many part-time workers i.e. some who work as little as several hours a week are counted just like a full-time worker. The U6 unemployment number, which many say is a better picture of the labor market, was 10% in September. That’s the lowest level since May 2008. The U6 report is not available on the MSA or below levels.


 

The September and year-to-year performance of the region’s 12 job sectors can be found at Heat charts map Tri-Cities job sector gains and losses

September’s average private sector wage, hours worked and a cost of living report can be found at Johnson City sees Sept. wage gains; softer pay performance in Kingsport-Bristol


 

Here’s a short-take version of the payroll survey with the rounded number of nonfarm jobs with the y-y change and the September unemployment rates for the region, the two MSAs and three major cities:

TRI-CITIES

Unemployment rate – 5.8%, unchanged.

Nonfarm jobs – 203,100 up 1.4%

Employment – 214,320 up 1.6%

 JOHNSON CITY MSA

Unemployment rate – 6.2%, unchanged

Nonfarm jobs – 79,400 – up 1.4%

Employment – 83,280, up 2.1%

KINGSPORT-BRISTOL MSA

Unemployment rate – 5.6%, unchanged%

Nonfarm jobs – 123,700, up 1.4%

Employment – 131,030, up 1.4%

BRISTOL, TN

Unemployment rate – 6.1%, up 0.1%

Employment – 10,900, up 1.9%

JOHNSON CITY

Unemployment rate – 6%, unchanged

Employment – 28,560, up 1.5%

KINGSPORT

Unemployment rate – 5.9%, down 0.1%

Employment – 21,210 – up 1.9%

Tennessee’s September preliminary, non-adjusted unemployment rate was 5.7%, down 0.1%. The adjusted rate was 5.7%, unchanged from August.

The U.S. non-adjusted rate was 4.9%, down 0.3%. The adjusted rate was 5.1%, unchanged from August.

 

Johnson City sees Sept. wage gains; softer pay performance in Kingsport-Bristol

wages

Clicking on image renders larger graph.

Private sector wages in the Tri-Cities’ two MSA continued headed in opposite directions in September.

The current Bureau of Labor Statistics report shows the average in Kingsport-Bristol has declined for the past two months while it made small gains in the Johnson City MSA. Those small gains are multiplied by a decrease in the average working week in Johnson City.

September’s average in Kingsport-Bristol was $630 a week. That’s $2 a week better than September last year.  So far this year private sector workers in Kingsport-Bristol have seen their weekly average increase every month compared to last year.  It rose to the 7% plus range in May and June, peaked in August at 8% then dropped to 1.5% in August then 0.4% last month. September was the 14 straight month wages have increased on the year-to-year comparison.

Last month was the second straight month the Johnson City average has increased. Those increases were small, but any gain is good news in an area where the year-to-year average has been negative in all but four months since May, 2012. All four of those increase were this year.

September’s average in the three-county Johnson City MSA was $595, $4 better than September last year.

INFLATION AND BUYING POWER

When last month’s weekly wage in Kingsport-Bristol is was adjusted for inflation from a September 2008 pre-recession benchmark it had $16 a week more buying power.

Buying power for Johnson City private sector workers declined by $66 a week when the same inflation adjustment is made.

AVERAGE WORK WEEK

The average work week declined in both MSAs last month.

September’s average in Kingsport-Bristol was 34.9 hours, down from 36.5 during September last year.

In Johnson City it was 33.9 compared to 34.3 hours the same month last year. It has declined on the year-to-year comparison for the last four months. But there’s a positive to that when compared with the average weekly wage. Since wages have increase slightly during the past two month workers are gaining ground instead of seeing lower wage from fewer hours worked.

TRI-CITIES WAGES LOW IN REGIONAL, STATE COMPARISON

Average private sector wages in the Tri-Cities consistently ranks at the bottom when compared to the other MSAs in East Tennessee and the state.

Jackson is the only MSA in the state with a lower weekly average wage.

Morristown has the highest wage among the smaller MSA in East Tennessee while Knoxville had the highest average wage in the state last month.

COST OF LIVE FACTOR

Unfortunately I haven’t found a cost of living index based on the MSA level to factor it into the wage comparison. We do know the Tri-Cities have a lower cost of living that the national average. But most of those comparisons are made on the city level.

Sperlings’ BestPlaces has a tool to compare the cost of living with other cities http://www.bestplaces.net/compare-cities/ 

According Sperlings’ data crunching Knoxville has the lowest overall cost of living for East Tennessee towns that correspond to the wage report. That’s a powerful statement when combined with data showing it has the highest average wage.

Here’s the current overall cost of living ranking from Sperling’s site:

Knoxville – 80.7

Bristol – 82

Kingsport – 85.1

Morristown 85.6

Johnson City – 87.4

According to Sperlings’ Web site, “Our cost of living indices are based on a U.S.average of 100.” An amount below 100 means a town is cheaper than the US average. A cost of living index above 100 means it’s more expensive.

state wages

Clicking on graph renders larger version.

Heat charts map Tri-Cities job sector gains and losses

September was a pretty good month for the Tri-Cities’ labor market and a good way to get a handle on it is with MTSU’s employment heat charts.

Employment heat charts are simply a graphic representation of how the 12 labor sectors have performed during the past year on a year-to-year metric.

In September the charts show nonfarm jobs grew in both MSA’s. Overall Kingsport-Bristol market looked a little stronger; however, the Johnson City MSA has stronger growth in a couple of sectors. Both areas show some of the stronger performance in sectors that traditionally pay less, have more part-time employees and offer fewer services.

KINGSPORT-BRISTOL:

-Eight of 12 job sectors grew from last year, three were flat and only one was down.

-Education and health services, wholesale trade, retail trade, transportation and utilities, financial activities, leisure and hospitality, and government jobs have increased for the last three months.

-A big negative for this MSA is manufacturing – the MSA’s largest job provider – has been negative or flat for the last three months.

-The biggest negative is the information sector which has seen sharp losses for five months.

JOHNSON CITY  MSA:

– Four of 12 job sectors grew from last year, four were flat and four declined.

-Mining, logging and construction, leisure and hospital and professional business service saw four months or better of strong increases.

-Trouble areas include wholesale trade, information, financial activities, and government.

The performance of education and health services and the government sector is also problematic for Johnson City since they are the MSA’s top jobs producers.

Education and health services were flat in September and have seen a lack luster performance since April. Year-to-year losses during that period almost equal gains.

The government sector has been flat or negative for four months.

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