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Tech Industry Saw Two Percent Job Loss in 1st Half of 2009

23 Sep, 2009

Tech Industry Saw Two Percent Job Loss in 1st Half of 2009

Washington, DC (September 2009) – TechAmerica Foundation today released a new report based on U.S. Bureau of Labor Statistics data that shows the U.S. high-tech industry shed 115,000 jobs between January and June of 2009, a 1.9 percent decline. The report looks 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. “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 – when the financial crisis and economic downturn were gaining momentum – through June 2009, tech lost 224,100 jobs, a 3.7 percent workforce decline. Over the same time period the U.S. private sector shed jobs at a higher pace – 5.1 percent.

For the six months between January and June, the losses were the greatest for U.S. high-tech manufacturing employment. Technology manufacturers shed 69,500 net jobs in the first half of 2009, a 5.6 percent loss, leaving a total of 1.2 million tech manufacturing jobs in June. This represented 11.6 percent of total U.S. manufacturing jobs lost over that time period.

Total U.S. 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 one percent drop for a total of 4.6 million jobs. The breakdown was: engineering and tech services (-21,500), communications services (-13,600), and software services (-10,400).

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 percent from January to June 2009, private sector employment held steady with 0.2 percent 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.. 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 percent over this time period. A direct comparison is not possible because seasonally adjusted data are not available for high tech.

All data are compiled from the U.S. Bureau of Labor Statistics’ Current Employment Survey and are preliminary, subject to revision, and not adjusted for seasonal variances. This report is not comparable to TechAmerica’s annual Cyberstates report, which examines the high-tech industry for all 50 states, the District of Columbia, and Puerto Rico.

This report, as well as all installments of the TechAmerica Competitiveness Series, can be downloaded for free at: www.techamerica.org/cs.

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