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As business services go, so goes the economy in Clark County

Sector geared toward serving other businesses can be a leading indicator of future health

By Sarah Wolf, Columbian staff writer
Published: December 4, 2022, 6:00am

We’ve all heard the line about a canary in a coal mine, but have you heard the one about business services employment in the economy?

I didn’t think so.

Just like it sounds, business services is a sector of the economy geared toward serving other businesses. It includes telemarketing, mail operations, collection agencies, janitorial services, travel agencies, landscaping services, security guards, waste removal and perhaps the biggest piece: temp worker agencies.

The business services sector, along with its higher-salaried counterpart professional services, has been growing rapidly over the last couple of years.

Employment at temp agencies can be what economists like Scott Bailey, regional economist with the Washington Employment Services Department, call a leading indicator.

“They expanded a lot,” said Bailey, reading over his employment charts.

In the first quarter of this year, Washington’s business and professional services led all the other state’s industries in both job gains and losses and net increase in employment, according to the national Bureau of Labor Statistics.

Locally and statewide, employment in the business services sector took a big run at the end of last year and into the first quarter of this year. It dropped off over the summer and hasn’t shown much change since.

As of the October labor report, there were 25,500 people working in business and professional services in Clark County, up 200 from September and up 2,100 from last October.

A leading indicator is an economic indication of future health of the economy, said Uchila Umesh, a marketing professor at Washington State University’s Carson College of Business.

“If there is an indication of a recession in, say, six months or a year, the stock market will decline now taking into account the future health of the economy. So, it is a leading indicator,” said Umesh.

That’s where the temp agencies come in. When businesses see an improving economy, they go straight to temp agencies to hire more staff before actually committing to hiring permanent staff.

It can also be a premonition of bad things to come. When the economy isn’t looking so good, businesses let all their temporary employees go first.

Despite the current economic conditions, business service employment isn’t showing any signs of a trend either way.

There has been a slight increase in employment in the sector — 10 percent — over the past couple of years.

“That’s pretty much in line with the overall increase,” said Bailey.

One thing the number does indicate: pandemic recovery.

“We’re back down to a normal level,” said Bailey.

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