Has the great Mountain region growth machine broken down? It’s looking like it might have.
Not this time is the famous Western engine of plentiful real-estate-driven job creation delivering on its immemorial promise of a rapid snap-back from every set-back.
In December we released the first edition of the index, and while the data suggested then that in aggregate no multistate region had been hit harder by the last year’s economic crisis, I thought the story was all about the unevenness of the Mountain region recovery, and blogged about the sharp contrast between the massive distress of the metros along the Western rim of the region (Boise, Las Vegas, and Phoenix) and the relatively modest downturn being experienced by the metros arrayed to the east of them--metros like Colorado Springs, Albuquerque, and Denver.
Now, though, we’ve just released another edition of the Mountain Monitor (covering the fourth quarter of 2009) and I’m thinking more about what is shared.
To be sure the range of experience is huge, with house prices having fallen 20.8 percent year over year in metro Las Vegas but just 3.3 percent in metro Denver. Likewise, metropolitan output has slumped a disturbing 4.1 percent in Boise from it peak, and 3.3 percent Phoenix, but just 0.9 percent in Colorado Springs and actually grew by 1.8 percent in Albuquerque and Ogden.
And yet for all that, what is going to be most striking--and disturbing--to Western eyes on the Monitor are the jobs data, particularly as displayed by an important new analysis we’ve developed for this release. It’s bad enough that though output is now growing in the large Mountain metros employment growth remains elusive. In this respect, employment in the region’s larger metros slumped another 0.4 percent in aggregate in the fourth quarter, and only Albuquerque and Ogden saw net job growth from the third to the fourth quarter (metro Phoenix managed to hold even).
Yet the slow hiring at least tracks with broad national trends. Only 20 metros nationwide managed to achieve job growth between the third and fourth quarters. Only one metro (McAllen, TX) has regained its pre-recession employment level.
What will give pause to leaders in the Mountain West, by contrast, is the fact that the recent Great Recession marks the first time in at least three decades that the Intermountain West has lagged the nation in terms of the pace of job recovery. Witness the new historical comparison we’ve undertaken as summarized by four line charts we’ve assembled depicting the pace of job recovery in the four last recessions.
In the three previous national recessions (those of 1981, 1990, and 2001) employment recovery in the Intermountain West metros occurred well ahead of the national recovery and, with one exception, employment had fully recovered eight quarters after the start. Quick job growth after recessions seemed a given. By contrast, the story this time has been different. Two years after the start of the Great Recession, the large Intermountain West metros possess 6.1 percent fewer jobs than they had when the recession started. What is more, their generally anemic to nonexistent job recoveries have been transpiring significantly slower than the nation’s.
This is jarring and new. At a minimum, such anemia represents a gigantic human, social, and economic problem. But beyond that the lack of a quick job recovery represents an almost existential challenge to western exceptionalism and the fundamental premise of a region that has been almost impervious to national declines. Quick, real-estate driven job growth has been taken for granted for 50 years in the West; now, a broad national consumption and migration pull-back is going to force the region to consider anew from where else may flow the next era of growth, the next era of job creation and broadly shared prosperity.
We’ll visit some ideas on that in the future.