Less help wanted

The great job-creation machine that has kept the northern Nevada economy humming clearly is slowing.

Economists and other observers believe the pace will remain positive maybe barely so through 2008, but they caution that effects of 2007's credit crunch and slowdown in residential construction will continue to slosh into 2008.

Analysts at the Nevada Department of Employment, Training and Rehabilitation project that employment growth will run at a 1.7 percent statewide in 2008.

"But this might be a little bit optimistic because of everything that is unfolding in the credit markets," says analyst Peter Jansen of the Nevada Department of Employment, Training and Rehabilitation. "Employment growth is going to slow substantially. To what degree, we don't know yet."

In the last year, employment growth in the Reno-Sparks area has run about 2.7 percent, which translates into nearly 6,000 new jobs.

When the state's economy was booming in the middle years of this decade, employment gains of 4 percent or more a year were common in Nevada including a sizzling 6.5 percent increase in 2004.

In Washoe County, the number of working people rose from 172,000 in 1996 to 221,000 this autumn an increase of 28 percent.

Those workers bought houses or rented apartments, spent their paychecks at grocery stores and movie theaters and created jobs for even more new workers.

Now, the rest of the economy is working hard to make up the jobs that are being lost in residential construction.

At the most recent count by the state, about 21,700 people in the Reno-Sparks metropolitan area were at work in construction jobs. That's down by more than 2,000 in the past year.

The financial sector has lost another 400 jobs in the past year as mortgage companies and others firms that serve the residential market shrink with the market.

The residential slowdown spills into other segments of the economy.

James Hardie International, which makes residential siding at a plant east of Sparks, said a couple of weeks ago that the plant now runs production only 12 days a month. At its peak, the plant employed well over 100 who worked feverishly to meet demand throughout the West.

Another indicator of the slowing housing market: Tax revenues from the sale of building materials, appliances and furniture fell so far that the Sparks municipal government is offering incentives to workers to take early retirement. The city hopes to save $1.3 million a year, says Assistant City Manager Steve Driscoll.

Among the segments taking up some of the slack with the decline in construction employment: Retail, which added 700 jobs in the past year. Restaurants and hotels, with another 700 new jobs. Professional and business services added 600 jobs. And most other sectors of the region's economy have shown some modest increases in employment.

Steve Conine, owner of the AccuStaff office in Reno, says laid-off construction workers are finding jobs in light industrial companies or warehouses. But, he says, those positions often are entry-level and don't pay as well as construction jobs.

Chuck Alvey, chief executive officer of the Economic Development of Western Nevada, expects modest employment growth in the region during 2008, but he says uncertainty is a common theme among executives as the new year dawns.

"I don't know that people know what to expect," he says.

The number of companies scouting the region for new facilities has slowed in recent months, says Ron Weisinger, executive director of the Northern Nevada Development Authority in Carson City.

And that, he says, becomes a compelling argument to help existing companies grow to provide employment opportunities.

"We need to grow from within," he says.

Conine, meanwhile, notes that a slowing economy often benefits companies such as his that provide temporary employment.

If executives are uncertain about the course of the economy, he says, they're more likely to fill vacancies with temporary workers rather than make the commitment to hire permanent employees.