Unemployment Rate Hits Record Low

The unemployment rate in Orange County is the lowest that it has been since 2000, according to a new report from JLL. In April and May of this year, unemployment in the market fell to 2.6%, the lowest rate in nearly 20 years. In the last year, the market gained 17,300 jobs, job gains of 1.1%. Educational and health services led the growth, adding 9,000 of the new jobs. The growth is having a big impact of office leasing activity. We sat down with Curtis Ellmore, SVP at JLL, to talk about the low unemployment and how it is impacting the office market.

GlobeSt.com: What is driving employment growth in Orange County?

Curtis Ellmore: There is a great quality of life, so people want to live here. There is access to great schools and universities, John Wayne Airport and great access to talent. People are coming here for that lifestyle.

GlobeSt.com: Which industries are driving employment growth?

Ellmore: A hot sector where we are seeing growth is tech. In Orange County, that has really been a driver here. Healthcare has also been a driver of growth. We are seeing a lot of those types of companies come up, and they are taking a lot of office space in Orange County. We are also seeing global brands taking more space and driving more jobs in the market.

GlobeSt.com: How is this low unemployment impacting the real estate market?

Ellmore: We are really seeing vacancy rates come down and rental rates go up since 2012. We are seeing the majority of that growth in South Orange County near the Spectrum. There is a lot of growth and a lot of movement in that market, and as a result, it is one of the tightest office markets.

GlobeSt.com: What types of office spaces are leasing the fastest in Orange County?

Ellmore: The trend is creative office. When these companies are looking to hire, they are competing for people just as much as the people competing for the jobs. As a result, companies are moving toward creative office campuses to have an edge over their competitors. We are seeing a big push in that sector, and we are seeing companies put a lot more capital into their space and put a lot more amenities into their space to be more attractive to talent. The creative office sector for sure has been a net recipient of all of this.

GlobeSt.com: How low can the unemployment rate go?

Ellmore: There is a point where you do run out of talent, but I don’t know when that is. However, via laws of supply and demand, there will be a tipping point where there isn’t enough fish in the pond. At that point, companies will be looking to take talent from their competitors. Orange County is the recipient of a lot of young millennials that are coming back here to live in this area. So, you do get a lot of new people in to the workforce. However, there is a point where you can’t go any lower.