July job outlook

07:56 AM EDT on Thursday, June 29, 2006

By ED MAZZE

Employment growth in Rhode Island continues to be slow due to the impact of increased fuel costs and a decline in housing permits.There has been a slight increase in the seasonally adjusted unemployment rate due to the departure of student workers at the end of the Spring semester.With record rainfalls in May and June causing the cancellation of a number of events, there is concern about a decrease in tourism during the summer months. If weekends are rained out, the leisure and hospitality sector will feel an immediate impact with fewer seasonal employees being hired and retained. A tighter state budget will cause fewer vacancies in government from being filled to save money.

With large amounts of money being spent on the coming primaries, election and casino vote, a number of new jobs were created in the media business to handle the production of advertisements. However, some of this work went to interns employed by the media and at the marketing communications companies during the summer. There will also be a number of individuals with political experience hired by candidates running in highly contested primaries. Many of these jobs will go to individuals from other states who have worked on political campaigns. The elections create an opportunity for students on summer break to volunteer to work for a candidate, get a first hand view of a political campaign and strengthen their resumes.

Moody's Economy.com recently reported that the sectors of the national economy causing the largest job growth in the last half of 2006 will be construction excluding housing, education services, finance, health care, leisure and hospitality and manufacturing. Other than manufacturing, Rhode Island seems to be following the national trend in creating employment opportunities. The number of residential housing permits in Rhode Island and the median price of single family houses show a decline to the year 2010. The Rhode Island economy does show growth in commercial construction and the building of high rise condominiums. The residential housing slowdown in Rhode Island can have an impact on mortgage banking, real estate sales and businesses supplying materials to builders. There is a long term effect because homeowners will not be able to use their homes to generate additional dollars for spending by taking out second mortgages. Home refinancing was one of the driving forces of the Rhode Island economy in 2003 and 2004.

There is some good news for college graduates. Deloitte & Touche USA LLP recently conducted a study of employment needs at fast-growing technology companies. The survey found that their highest need was finding, hiring and retaining qualified workers. About 41% of the respondents said a shortage of qualified workers is their biggest obstacle in 2006 up from 27% who listed hiring as their top concern in 2005. With a concentration of this type of company in the New England states, graduates of business, engineering and other technology programs without jobs should be sending their resumes to these companies.

Ed Mazze is the Distinguished University Professor of Business Administration at The University of Rhode Island