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Real estate

DIGITAL Employment report May 2021

May 21, 2021 | 2 min read
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DIGITAL* employment chart

Scatter plot showing the May 2021 DIGITAL employment Percentage change in three month and 12 month averages

Moody’s Analytics, Principal Real Estate Research, May 2021.

Employment rose during the first quarter of 2021 for 46 of the 48 markets Principal tracks, as the economy continued to benefit from the increased pace of vaccinations that continues to facilitate business reopening’s across the nation. Though April’s employment at the national level was weaker than expected, most markets are still experiencing strong employment growth. Our internal DIGITAL sum of markets lagged slightly behind the national average during the past quarter on weaker performance among gateway markets.

Overall, markets were more randomly distributed during the quarter and some DIGITAL markets experienced a slowdown from prior quarters. Smaller, secondary markets are still outperforming the nation on a longer-term basis. Recent chip shortages and shipping delays likely also contributed towards slower employment growth in markets with a significant manufacturing presence, such as Chicago, San Jose, Cleveland, and Dallas/Ft. Worth. Materials shortages in the construction industries may have also been responsible for more moderate job growth in traditionally high growth markets such as Atlanta, Miami, and Orlando.

Top 5, bottom 5 cities

Table showing the top and bottom 5 cities with extreme percentage changes in DIGITAL markets from February to April 2021

BLS, May 2021.

Vaccinations are well underway in the U.S. and, as of writing this report, nearly half of the nation has already received their first dose. Increased vaccination and the resumption of leisure and retail businesses is one of the keys to a swift recovery in the labor market, and states and markets with slower vaccinations could represent a headwind to stronger recovery. Job openings have also risen to record highs, indicating renewed demand for workers as the economy re-opens. Near-term headwinds on vaccine and childcare shortages should dissipate as we get deeper into the year. We expect many markets to fully recover by 2023, though many DIGITAL markets are expected to see an earlier recovery.

Monthly percentage change

Collection of bar charts showing the monthly percentage change in DIGITAL markets segmented by gross-producing, service-providing, office-using and total, from November 2020 to April 2021

BLS, May 2021.

*DIGITAL refers to key long -term growth drivers centred around demographics, innovation, globalization, infrastructure, and technology that Principal has identified as metrics of long-term market outperformance.

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MM11961-01 | 05/2021 | 1655533 | 05/2022