What's next for Newport's job market? Inflation, spending trends may offer a clue.

Like most businesses nationally and internationally during and after the pandemic, Newport County’s businesses and industries have struggled with a tight labor market.

Now, as 2022 draws to a close, the number of available job positions in Newport County is reducing due to inflation and consumer spending trends. This might loosen the competition between employers looking to hire from a still-small available labor pool going into 2023, said Erin Donovan Boyle, executive director of Greater Newport County Chamber of Commerce.

Possible recession concerns result in reduction of available job positions going into 2023

According to data from October 2022, regional unemployment in Greater Newport County is 2.6%. Although still higher than in October 2019, which was at 2.3%, it’s lower than it was in October 2020 and October 2021. It is also lower than the statewide average, which is 3.3%.

September 2022 also marked the highest number of people in the job market since 2019.

“With such a small amount of people unemployed or underemployed, at 2.6%, it means there’s a small pool of individuals who can be placed in open positions,” Boyle said. “It’s really a great story as far as (pandemic) recovery goes, but it also points to that tight labor market.”

Despite continued difficulties for businesses looking to hire, Boyle said the total number of job postings has decreased, especially for industries such as Professional Business Services and Leisure and Hospitality. Boyle said the latter is somewhat typical to see during the off-season in Newport County, however, the national average number of job listings for positions in that industry has increased in the same amount of time.

Despite continued difficulties for businesses looking to hire, the total number of job postings in Newport County has decreased, especially for industries such as Professional Business Services and Leisure and Hospitality.
Despite continued difficulties for businesses looking to hire, the total number of job postings in Newport County has decreased, especially for industries such as Professional Business Services and Leisure and Hospitality.

“The U.S. average is up 8.8% for those sectors and we are down 16%, so it’s a pretty big differentiator,” Boyle said. “It can mean that our businesses have adapted significantly and those jobs in those sectors may not come back.”

While a reduction in job postings helps by reducing the number of businesses vying for such a small applicant pool, Boyle said this could also be an indicator that business owners are worried about inflation and the possibility of an incoming recession.

“It certainly indicates the level of confidence of business owners,” Boyle said. “If they are not confident that they’ll see growth in the next quarter or the next few quarters, they don’t continue to hire. They slow down on those hiring opportunities.”

Increasing inflation costs and rising interest rates have also impacted some sectors' current labor forces. Although the labor market is tight right now, Boyle said the chamber has seen some layoffs, specifically in the mortgaging sector. She pointed to the current housing market as the primary cause.

“We have seen some significant layoffs for businesses associated in that industry, most likely directly related to inflation and the rising interest rates,” Boyle said. “There’s also less stock available.”

Tourism sector eyes J1 visas to boost staffing for upcoming season

Newport County might be well into its shoulder season, but Newport’s hospitality and travel industry are still looking ahead to see what the next summer season might hold.

Evan Smith, executive director for Greater Newport County’s tourism bureau Discover Newport, said the region saw a huge boom in tourism thanks in large part to traveler eagerness post-pandemic. However, that eagerness may be starting to cool down, thanks to rising inflation costs.

“The marketplace conditions that are prevalent now and going to remain prevalent in 2023 is, when we first came out of the pandemic, people would pay anything just to get out of their house and so there was this balloon of cost to travel,” Smith said. “Now that is definitely starting to wane and people are getting back to being better shoppers about looking for the best value in travel.”

Smith said the market may soon correct itself in response to the increased frugality among travelers, resulting in decreased hotel rates and other tourism-related prices, and forecasts 2023 to still be a strong year for Newport County’s tourism sector.

Still, despite the industry’s improved economic position, it is still constrained by the tight labor market experienced statewide. Smith said the relationship between potential employer and potential employee in Newport’s tourism industry has almost flipped.

“There was a time when getting a job in Newport was hard,” Smith said. “If you were a college student, you had to get a job by February otherwise you weren’t getting a job in Newport for the summer. It’s different now, now the employers are the ones who have to work really hard to find labor.”

Smith expects the increased ability for employees to choose among employers and pick the best offer will result in increased wages and benefits going into 2023.

“We’re going to secure that labor, it’s just going to come at a higher cost,” Smith said.

Another expectation the tourism sector has for 2023 is the reintroduction of international workers coming into Newport through the short-term J1 Visa. Throughout 2020 and 2021, the U.S. limited the number of short-term J1 visas that could be available to international workers, which removed a large portion of the labor pool the tourism sector typically pulls from during the summer months.

“That has been, historically, a large part of the resort labor market,” Smith said.

Smith said more J1 visas are expected to be issued in 2023, which will help the industry fill more positions.

However, as Boyle implied, Smith also foresees certain positions in the hospitality and tourism sector being eliminated entirely as the industry continues adjusting to consumers’ increasing preference for digital interaction over face-to-face interaction, which was expedited by the pandemic. Hotels with digital check-ins, increased reliance on AirBnbs and restaurants with order-ahead business models could reduce the need for traditional service positions, such as front desk staff and cashiers, but Smith does not foresee this happening over the course of one year.

Newport County’s defense tech sector remains steady throughout labor market crunch

One of the largest employers in Newport County, the information technology and defense technology sectors, is also one of the only industries which has seen consistent growth during and after the pandemic.

“They are one sector that has never stopped hiring throughout the pandemic and are only recruiting more and only getting more government and I.T. contracts and it presents great opportunities for individuals,” Boyle said. “It’s also a great talent attraction tool, not only being in this region, but having such close proximity to (US Naval War College) and Naval Station Newport, having so many former naval officers go through Newport throughout their tenure in the Navy come back and reestablish themselves here and get good, high paying jobs as engineers.”

Although the RI Marine Trade Association declined to comment on the current status of the labor market in its industry as it is still waiting on more official numbers to come in, SENEDIA, the Alliance for Defense Tech, Talent and Innovation, provided a statement detailing the industry’s current position, which states the industry is also facing challenges in recruiting talent.

However, SENEDIA has created an internship program for students in their last year of college and created a New England Regional Training Network to combat talent acquisition issues, Executive Director Molly Donohue Magee says in the statement.

“The Rhode Island Defense Sector is an important economic engine with an annual impact of over $4 billion. And the sector is growing and hiring for many careers including science, technology, engineering, and technology (STEM), business and finance, and trade and industrial skilled workers,” Magee’s statement reads. “This is especially true for the companies supporting various aspects of undersea technology, cybersecurity, and submarine shipbuilding. RI Defense jobs are high skill, high growth, high wage jobs…SENEDIA is laser-focused on growing and strengthening our defense sector economy.”

This article originally appeared on Newport Daily News: Newport jobs market tightening as employers cut positions