Increase in employment not seen helping industry.

March might have brought the nation 308,000 new jobs, but there is still no sufficient reason to celebrate.

Real estate analysts say the new jobs, most of which are concentrated in healthcare services, construction and education, won't amount to greater demand for office space.

According to Robert Sammons, director of research with Colliers ABR, who gets his jobs statistics directly from the New York City Comptroller's office, the state of the financial services industry, one of the primary job sources for the city, leaves a lot to be desired.

"We have a couple of things to worry about--first, technology has sped ahead so fast that some of the financial services people who have been laid off will not be hired back, [their jobs have been automated]" he said. "The second problem is outsourcing. It is not taking place only with the lower level jobs--the research jobs are beginning to go. We have to look to other areas for office job growth, not necessarily in the financial services, and that's easier said than done."

Sammons sees overall job growth in the New York region as encouraging, but it's still not taking place in the industries that matter to the commercial real estate market.

"For the first two months of the year, it was the health sector that gained the majority of jobs," he said. "Also, leisure and hospitality are doing well. But both of these are not office-related sectors. A great sign, however, is that we gained 23,400 private sector positions in New York in 2004--for the past three years in a row we have been losing jobs."

Jason Spicer, senior vice president and director of research with Rockwood Realty Associates, has a bit more positive outlook, however.

"While the nation is showing job gains, New York is still showing job decline, so we still appear to be hemorrhaging jobs," he said. "But on the other side, New York State data shows an upturn in the information sector--there are more media and broadcasting jobs. And there is hope that some of the film industry jobs will stay in New York because of the currency exchange."

Spicer also thinks that some of the healthcare jobs might translate into more medical offices in the City, though he admits it won't be enough to revitalize the New York office market.

"Most of the job gains were in two sectors really--education and health services. So as far as the demand for the traditional office space goes, that won't be helpful," he said. "Plus, the financial services sector is a real problem for New York and an even bigger problem for lower Manhattan. But we are also digging out of a larger hole than the rest of the country. We'll show significant gains, but it's just going to take a few months longer."

In the meanwhile, those in the brokerage community hope for the best, but prepare for the worst. "We are cautiously optimistic that a recovery is underway," said Barry Gosin, vice chairman and CEO of Newmark Real Estate. "But only about one-sixth of the [308,000 jobs] were in office industry sectors. The remaining new jobs were added in construction, retail, trade, education, health services, leisure and hospitality and government sectors. These are not jobs that necessarily require office space. At the most, a third of all those jobs will be office jobs."