The Buzz

ALACHUA COUNTY – Bad news for government employees, good news for everybody else, it seems.

Eight out of ten industries in the Gainesville metropolitan statistical area, which includes all of Alachua and Gilchrist counties, have expanded the number of people they employ over the last year, according to a report from the Alachua County manager's office.

Only the government sector experienced a reduction in employees, with 2.6 percent fewer workers now compared to May of last year. The information sector remained the same, with no growth or reduction.

"When only one industry is declining, that is a healthy indicator," said Alachua County Economic Development Coordinator Edgar Campa-Palafox. The report from the county manager collects its data from the U.S. Department of Labor, and is meant to provide local lawmakers with a quick snapshot of the state of the economy in the area.

The biggest growth was seen in the mining, logging and construction industries, which had a combined increase of 7.3 percent.

One reason for the increase is that these kinds of businesses have traditionally not had a large presence in the area, so even a small surge in the number of employees would cause the percentage to shoot up, said Ray Schaub, from the University of Florida Bureau of Economic and Business Research.

"When dealing with a smaller sample, these numbers tend to fluctuate more," he said. For example, an industry that employs 1,000 people could add only 70 jobs and it would be reflected in a 7 percent increase. Industries like leisure and hospitality, which has been small because of the lack of tourism in the area compared to the rest of the state, had a 6.9 percent expansion in workers since even a small hiring surge would have a major impact.

Even so, the increases are still significant, said Economic Development Coordinator Campa-Palafox. Schaub also agreed.

β€œIt’s still a positive sign,” Schaub said.

Despite what the numbers indicate, not everybody in the construction world has seen the effects.

Ron O'Steen, of construction company O'Steen Brothers Inc., said his firm has not been able to add on new employees in the last year. Although he has seen more work lately, it has been sporadic and not steady enough.

"The work is not consistent enough," he said. "We'd put them to work for a month or two then have to lay them off."

Most of his work comes from government contracts, but the building block of revitalizing construction in Alachua County is the residential market, which feeds business development, he said.

"We've been sucking air for the last four or five years," O'Steen said in regards to the housing construction market.

The increase in construction jobs is probably a result of pent-up demand from the last five years, said County Commissioner Lee Pinkonson.

O'Steen said he still hasn't lost hope, and he expects things to improve.

"It's like a train with a lot of cars. It's slow getting started," he said, but it builds momentum eventually. There has been an increase in residential construction activity, a good sign. When more houses are constructed, it means more people to put money into the economy and attract new businesses.

Ronald Kless started Leading Edge Advertising Agency in January, which offers search engine optimization, web design and advertising packages. Although he is the only full-time employee, his company has employed several freelancers. With the business services sector in the combined counties of Alachua and Gilchrist growing 6.3 percent in the last year, more companies like Leading Edge might be created. He expects to add three to six full-time employees by sometime in 2014.

Kless attributes the growth in demand for business services to the arrival of companies, especially startups, attracted by the nearby university.

"There's a constant influx of money from all over the state because of the students," he said. Because startups don't have the resources an established company might have, they need an advertising agency that can provide customized service, he said.  

"We form a symbiotic relationship. They need us and we need them," he said. Companies providing professional services reflect what is going on in the local economy in general, Kless added.  

Nanotherapeutics, based in the city of Alachua, announced earlier this year it would create 150 manufacturing jobs in Florida. Manufacturing saw a 4.7 percent increase in employment over the last year. In addition, education and health services increased 5.2 percent, financial activities increased 1.6 percent, transportation and utilities increased 1.7 percent, and the miscellaneous sectors increased by 5 percent. Total non-farming business increased 2.2 percent.

County Commissioner Pinkonson said the economic indicators report is encouraging.

"Things definitely look better," he said.  

Although Gainesville is the economic hub of the area, the agriculture-heavy rural areas make a large contribution to the economy too, Pinkonson said.

The reduction in government employment is probably a result of the recession, he said.

Schaub disagreed, saying it was probably due to a combination of decreased funding from the state, and the state setting trends by reducing the size of its payroll.

Overall unemployment in the area rose slightly over the period from April to May, going from 4.9 percent to 5.3 percent, but it is still well below the state average of 7.1 percent and the national average of 7.6 percent.

"The trend is going," said Campa-Palafox, "but not as fast as everybody would like it to."

The inclusion of Gilchrist County in the average probably doesn't change the figure that much, Campa-Palafox said. Without it, the average would probably only be about .1 or .2 percent lower.

The economic report paints a good picture he said, but unemployment is still too high.

Alachua County Commissioner Susan Baird agreed.

"We're doing well, but it should be outstanding with the potential we have."

One problem is that electricity rates in Alachua County are too high, making it difficult for businesses to move in, Baird said.

"With a city that has so much employment from the university and government, the unemployment should be around 3 percent," she said.  

"I think that's a realistic goal."

#     #     #

Email CMcKinney@