US tech industry sees slower employment decline than private sector

The tech industry has suffered the full force of the global economic recession in the first half of this year, yet TechAmerica Foundation believes it has weathered the storm better than most other sectors.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 9/24/2009

At a slower rate than the United States private sector, the US high-tech industry has shed 1.9% of its jobs, approximately 115,000 positions, between January and June of this year.

That's according to the TechAmerica Foundation, which this week released a new report based on US Bureau of Labor Statistics data looking at four sectors within the high-tech industry: high-tech manufacturing, communications services, software services, and engineering and tech services.

“The tech industry has suffered the full force of the global economic recession in the first half of this year, yet we believe it has weathered the storm better than most,” said TechAmerica Foundation President Christopher W Hansen in a statement. “Given that technology is an important economic driver, long-term investments and globally competitive tax policies are critical for encouraging technology companies to form and flourish in the United States and add new American jobs.”

From June 2008 through June 2009, tech lost 224,100 jobs, a 3.7% workforce decline, the foundation said. Meanwhile, the US private sector shed jobs at a higher pace – 5.1% – in the same period.

However, not all tech sectors lost jobs at a slower rate than the private sector. For the first six months of 2009, US high-tech manufacturing employment saw 69,500 net jobs go in the first half of 2009, a 5.6% loss that left a total of 1.2 million tech manufacturing jobs in June. This represented 11.6% of total US manufacturing jobs lost over that time period, the group said.

TechAmerica further reported that total US high-tech services employment was also down over the previous six months, but not as severely as manufacturing. Technology service providers shed 45,500 net jobs from January to June of 2009, a 1% drop for a total of 4.6 million jobs. The breakdown was: engineering and tech services down 21,500 jobs, communications services down 13,600 jobs, and software services down 10,400 jobs, the data showed.

TechAmerica said that employment across the technology industry "seems to have faltered" in comparison to private sectors employers as a whole during this same six month period. While high-tech employment declined by 1.9% from January to June 2009, private sector employment held steady with 0.2% growth. 

"The apparent growth in private sector employment reflects the fact that these figures are not seasonally adjusted, and, among other factors, include a temporary increase in employment nationwide that typically occurs at the beginning of June when schools close and there is an influx of youth and other part-time or temporary workers into the workforce," TechAmerica explained. "The more widely cited seasonally adjusted data, which remove these seasonal fluctuations, show that the private sector lost 2.6 million jobs, or 2.3% over this time period."

The most recent US unemployment data from the Bureau of Labor statistics estimated an unemployment rate of 9.7% in August.