This week Bureau of Labor Statistics (BLS) published its employment forecasts for the decade from 2010-2020. The good news is that BLS predicts an increase of nearly 20.5 million jobs over the course of this decade, this in contrast to a decrease of nearly 3.2 million jobs in the last decade (2000-2010). Unfortunately, the Federal Government sector does not fare as well. BLS predicts that federal government employment will shrink by 372,000 jobs by 2020. About half of this decline is attributable to job losses at the U.S. Postal Service (182,000 jobs) and much of the remainder is expected to come from non-defense federal employment (122,000 jobs).
Is this a concern for landlords? On the one hand, combined with the austerity and budget trends we are experiencing currently, the projected decline in actual federal employment presents a double-whammy: not only is the government tightening its space utilization per employee but it is also expecting a drop in the actual number of employees. However, on the other hand, we must note that federal employment has flexed up and down for decades and during that same period the demand for leased space has consistently grown (though the owned space inventory has remained relatively static).
News of declining federal employment doesn’t correlate directly with a reduction in space leased from the private-sector but it is certainly one more signal that future federal growth is no longer automatic.