Following a 2.5% 2009 decline and a 2.6% 2010 increase, the US economy continued to bump along in 2011. First quarter 2011 real gross domestic product (GDP) barely grew posting a .4% increase. Second and third quarter posted modest gains at 1.3% and 1.8%. Changes in tech job demand, as measured by the WaveLength Tech Jobs Index, followed these broader trends. Index values, both by city and tech job function, peaked in March 2011 and drifted down to Spring 2010 levels.
Source: WaveLength Market Analytics December 2011
As the chart indicates, tech jobs demand in all cities sharply peaked in March 2011. While each city has its own story to tell, all cities clearly saw an apex last spring, declined sharply until fall when declines moderated. The Bay Area, home to many of the industry’s largest tech companies, finished out 2011 with an index value of 202, making it the city with highest tech jobs demand. The fast-growing tech city of Austin finished the year at 183, giving it second place. Communications-oriented Denver just edged out Dallas to finish third. Another communications-oriented city, Raleigh-Durham even finished comparatively strong. Meanwhile, the traditionally steady labor market around Washington DC, bucked the trend. While not usually subject to the same volatility as the rest of the US labor markets, DC tech job demand dropped below levels seen in October 2009 (when the WaveLength Index originated). Seasonal disruptions in hiring certainly play a role, but perhaps secular shifts to IT outsourcing and cloud computing may be showing some initial impact.
Source: WaveLength Market Analytics December 2011
So where are the surprises? What are the positive signs? The above table tells us that the surprise is that the Research Triangle area. With tech job demand declining at only 8% and 20% year over year, it’s a top performing market. The demand declines in tech-heavy Seattle are the steepest, particularly interesting when compared to the Bay Area. Now for the positive sign — Bay Area is showing signs of stablizing tech job demand posting a modest 2% decline in Fall 2011.
Source: WaveLength Market Analytics December 2011
Looking at US-wide demand, some tech job functions fared better than others in 2011. The above chart is based on data that is not limited to our 10 tech cities. It clearly shows that demand for marketing-related functions increased faster than technical or sales roles, and that they also suffered the most severe demand declines. While it looks like demand for technology sales people has barely moved, the value more likely reflects that demand holds steady. Even in the worst of times, companies need sales people. To a degree, it’s the same with technical job functions. In the worst of times, application engineers and network engineers are still required to create and maintain; it may mean enterprise IT is more likely do more maintenance than more labor-intensive creation.
Source: WaveLength Market Analytics December 2011
It’s always good to remember that although the WaveLength Index shows that demand was slower last year, it’s still much better than it was in 2009. Remember how bleak the job market was in the summer and fall of 2009? As the chart above shows, demand for tech jobs is still considerably higher; it’s 100% higher in the Bay Area and around 60-80% higher in most cities.
Source: WaveLength Market Analytics, December 2011
As usual, check back for updates. The next blog will focus on the Bay Area’s tech job functions. WaveLength Market Analytics also intends quarterly updates. In the meantime, if you want to know how demand for specific tech job functions is faring in one of the other nine tech job markets we cover, just let us know and we’ll be happy to publish those results, too.
Methodology
The number of job postings is collected every Wednesday using well-known job sites and then calculated into the index for each job function. The index contains 6 common functions found in every technology company, including product marketing, product management, application developer, network engineer, sales, and marketing. The index series is designed to measure monthly changes using a smoothed 4-week average rolled up into an overall composite. The program was includes coverage of 10 high tech cities since October 28, 2009. We update our research monthly. We feature 10 geographic markets– Austin, Atlanta, Bay Area, Boston, Dallas, Denver, San Diego, Seattle, Raleigh/Durham, and Washington DC. Feel free to visit http://www.wlanalytics.com/currents/.
