Looking to bright side, economist says pace of unemployment is slowing.The year 2009 is on track to go down as the worst on record for employment losses and industrial leasing activity in New Jersey, according to economic and real estate experts.
Â2009 will ultimately be remembered as the worst employment loss yearÂ since the statistics have been tracked, said Jim Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, at an event hosted this morning by commercial real estate brokerage Cushman & Wakefield at the Sheraton Meadowlands, in East Rutherford.
Nationally, the first nine months of 2009 have seen nearly 4 million U.S. private-sector employment losses, compared to 3.2 million job losses for all of 2008, Hughes said. But ÂweÂre seeing a slowing rate of decline,Â with 210,000 jobs lost in September, in contrast to 749,000 losses in January, he said.
The 2007-09 recession differs from previous downturns in the composition of job losses, Hughes said. In the previous recessions of 1981-82, 1990-91 and 2001-03, unemployment was overwhelmingly concentrated in the manufacturing and construction industries, accounting for 82.2 percent to 97.7 percent of job losses, he said. In the current recession, however, services encompassed 50 percent of job losses, compared to 2.3 percent to 17.8 percent of job losses in the other downturns, Hughes said.
ÂThis is the first white-collar recession,Â he said. ÂWe have no precedent on how the oncoming recovery will proceed.Â
But New Jersey still fared better than the nation in terms of losses of office-using jobs, said Kenneth McCarthy, managing director of New York area research at Cushman & Wakefield. Office-using employment in New Jersey was down 6.5 percent from its peak, compared to a 7.7 percent decrease for office-using employment nationwide, he said.
ÂWeÂve seen some deterioration, some weakness, but not as much as youÂd expect,Â McCarthy said. Employment levels in the Garden State are currently at 1998 levels, but the amount of office space has increased by 25 percent since then, he noted.
At the end of the third quarter, the overall office vacancy rate held at 18.7 percent, up from 17.8 percent from the same period a year ago, according to Cushman & Wakefield statistics. Although overall vacancy has started to creep up, ÂitÂs a fairly stable office environment,Â he said.
But New JerseyÂs industrial market, however, is experiencing its weakest leasing activity since the brokerage firm began gathering statistics in the late 1990s, with 8.3 million square feet leased year-to-date, McCarthy said. Overall asking rents, at $6.07 a foot, are the lowest in a decade, and direct net absorption Â a negative 10.9 million square feet Â is also at its weakest in that period, he said.
ÂItÂs a reflection of the decline in the economy, particularly in the distribution of goods,Â he said. ÂAs demand has dropped, demand for space has fallen dramatically.Â
E-mail Evelyn Lee at [email protected]d