Employment

Since June 2022, industry employment growth has decelerated due to higher interest rates and a pullback in public and private funding for the industry. The life sciences industry added an average of 11,144 jobs per month between June 2020 and June 2022, up from 6,259 in the comparable two-year period prior to the COVID pandemic (2018-2019). In the past six months ending January 2023, however, the monthly average fell to 3,378.

Figure 1: U.S. Life Sciences Employment Trends

Source: U.S. Bureau of Labor Statistics, CBRE Research, February 2023.

Life sciences companies have announced many more layoffs in the first two months of 2023 than in 2022 (Figure 2). Nevertheless, the unemployment rate for essential scientific occupations in life sciences research & development remain well below the total U.S. unemployment rate (Figure 3), suggesting underlying strength in hiring despite the layoff announcements.

Figure 2: Number of U.S. Life Sciences Companies Announcing Layoffs

Source: CBRE Research, February 2023.

Figure 3: 2022 U.S. Unemployment Rates by Occupation

Source: U.S. Bureau of Labor Statistics, CBRE Research, February 2023.

Despite the possibility of a moderate U.S. recession this year, the life sciences industry has historically been resilient to economic downturns. In each of the past three recessions, job losses in the life sciences industry were much more limited and of a shorter duration than overall U.S. job losses. We expect this same trend if a recession takes hold this year.

Figure 4: Life Sciences Employment Levels in Past Three Recessions
(1.00 = employment level in first month of recession)

Source: U.S. Bureau of Labor Statistics, CBRE Research, February 2023.

The latest life sciences local employment data through June 2022 shows which U.S. markets had the most strength and momentum entering a slower growth phase since then. In terms of total number of persons employed in the life sciences industry, the San Francisco Bay Area was the leading metro for life sciences employment, followed by Boston/Cambridge, New Jersey, San Diego, Washington, D.C./Baltimore and New York City.

Figure 5: Top 25 Largest Life Sciences Employment Clusters

Source: U.S. Bureau of Labor Statistics, CBRE Research, February 2023.

Life Sciences Employment Growth

Figure 6: Top U.S. Markets for Life Sciences Employment Growth, 2019 to Q2 2022

Source: U.S. Bureau of Labor Statistics, CBRE Research, February 2023.