Jobs in jeopardy?

Friday, July 4, 2008

Phoenix Business Journal - by Chris Casacchia, Ashley Macha and Yvonne Zusel

Editor's note: This week kicks off our monthly series focusing on various Phoenix-area jobs -- from the recession-proof to the dangerous and the really cool.

Bleak economic indicators continue to drag the Phoenix market, but population growth is offsetting some of the problems.

As the region matures, more skilled workers are needed to meet market demands -- in good times and in bad.

It was in this vein that the Phoenix Business Journal set out to chronicle businesspeople caught in the middle of this tumultuous cycle. The downturn has wiped out mortgage firms, hurt retailers and squeezed entrepreneurs, while providing plenty of work for bankruptcy attorneys and accountants.

People from across the country flock to the Valley for a better climate, more space and lower living costs, and their migration to Arizona is leading many industries to boost hiring to try to keep up with the growth.

One of the best examples is health care, which gained 9,600 employees from May 2007 to May 2008, according to the Arizona Department of Commerce. Even with that increase, the industry continues to face major shortfalls, especially on the nursing front. Nationally, the average age of a

registered nurse is between 45 and 48, but in Arizona it's more than 60 -- and 10,000 nurses are near retirement. A December 2007 report by HealthWorks, the Arizona Healthcare Workforce Data Center, estimates the state will need about 49,000 new registered nurses by 2017.

"We are trying to increase the number of RNs and increase awareness of the nursing profession," said Barbara Thurber, an RN and recruitment director for Sun Health.

She said nursing schools doubled their enrollment from 2001 to 2007, and they offer refresher courses for nurses who want to return to the profession. Thurber said the highest demand is in acute care, followed by skilled nursing and home health.

CREATING NEW BUSINESS

Regulatory changes, new tax codes and a much more watchful eye from Uncle Sam -- particularly in the wake of corporate scandals -- have solidified the accounting profession as a hot spot for graduates and those seeking high incomes.

The 2008 Job Outlook report, a national gauge of hiring intentions, ranks accounting as the most in-demand job for undergraduates. On the graduate level, employers ranked the profession at No. 5.

Stricter corporate accounting and auditing regulations -- spurred by the Sarbanes-Oxley Act, which was enacted in 2002 to combat auditing negligence -- has given the sector great growth potential. Financial planning, especially for higher education, estates, asset transfers and inheritances, also has bolstered demand.

Personal financial planning accountant Jason Washo, who established Scottsdale-based Washo Financial LLC seven years ago, said 85 percent of an inheritance can disappear if not handled correctly.

"That can be pretty daunting," he said. "That's why the demand for what we're doing is so high."

Employment of accountants and auditors was expected to grow 18 percent between 2006 and 2016, the fastest rate of any occupation. The U.S. Department of Labor projects more than 226,000 jobs will be created during that time.

Regulatory and compliance issues also can be attributed to the nearly recession-proof careers of bankruptcy attorneys, who are getting busier as the mortgage debacle and lending crunch continue and retailers close their doors. Even since the new bankruptcy laws took effect in 2005, making it more difficult to file, economic factors have brought in new business.

"Even when the economy is going well, we still see people having problems," said Harold Campbell, a bankruptcy specialist for 30 years and state chairman of the National Association for Consumer Bankruptcy Attorneys.

"Bankruptcy is an area where the need is always going to be there," said Campbell, principal of Harold E. Campbell PC in Mesa.

TAKING A HIT

Record foreclosures, tightening credit and home depreciations are wreaking havoc on the Phoenix real estate market. With the industry tied so closely to the region's overall economic health, ancillary businesses such as banks, furniture stores and home improvement retailers are taking hits.

Some in the mortgage sector, which has lost thousands of jobs in the past two years, and real estate agents predict the downturn will be the worst to hit Phoenix in decades.

Economist Jay Butler's forecast also is clouded with uncertainty.

"Optimists are looking for recovery by the end of this year, and maybe even into 2009 or 2010," said Butler, director of Realty Studies at Arizona State University's Polytechnic campus. "Even if we do have recovery, it is going to be a spotty one."

Other experts predict the housing correction will last well into the next decade, possibly into 2015.

"I don't think anybody really knows," Butler said.

In the first quarter, there were 15,200 single-family home sales in the Phoenix metro area, down 29 percent from the same period last year. Townhome and condominium sales sank 46 percent, to 2,645, according to the latest figures released by ASU Realty Studies.

During that quarter, 27,404 Arizona homes had foreclosure filings, up nearly 245 percent from a year earlier and 45 percent from the fourth quarter of 2007. Arizona now ranks as the third-hardest-hit state in the nation.

One in every 95 homes here has been in the foreclosure process -- almost double the national average.

To complicate matters, many of the mortgage firms that serviced these borrowers no longer exist, including First Magnus, Great Southwest and American Home Mortgage.

Mortgages Ltd., one of the state's largest commercial real estate lenders, also is facing an uncertain future following the death of Chairman and CEO Scott Coles and a number of lawsuits filed against the firm.

OUT OF GAS

The auto industry also is going through one of its toughest times, as gas creeps toward $4.50 a gallon and consumers question whether their gas-guzzling SUVs were worth the deals they got on the lot.

"Once gas hit $3.58 a gallon, that's when people started going to smaller cars," said Byron Pope, associate editor of Ward's Auto, an industry magazine published in the Detroit area.

Nationally, major automakers reported a significant dip in sales for the second quarter. Only Honda had a year-over-year sales jump in June.

Arizona car sales aren't faring much better.

Bobbi Sparrow, president of the Arizona Automobile Dealers Association, said sales across the state were down 31 percent in the first quarter from the same period last year. She said the poor economy is likely to blame for the decrease, and she doesn't expect improvement in the second half of the year.

Startups discouraged

Liquidity and capital issues also are plaguing entrepreneurs, who should wait to bring their ideas to market, according to Tom Duening, director of entrepreneurial programs at the Ira A. Fulton School of Engineering at Arizona State University.

"It's very difficult to get any type of bank loan right now for any type of venture," Duening said, adding that most new businesses are struggling to survive.