Where are the jobs? Lawmakers have several ways to promote conditions for future job growth.

• Author: Jacobson, Louis
• Position: WORKFORCE

After a brutal recession and a middling to weak economic recovery, December brought some good news on the jobs front. The unemployment rate fell to 6.7 percent, the first time in five years it dropped below 7 percent. And although jobs rose by only 74,000, the average job growth over the year was 193,000 per month.

Still, the number of the long-term unemployed (those jobless for 27 weeks or more) remains stubbornly high at 4.1 million Americans. The question on their minds is, "Where are all these jobs?"

And for many state lawmakers, the questions they want answers to are:

* What industries are expected to produce the most jobs in the near-to-medium term?

* What parts of the country, and what types of locales, are likely to see the fastest job growth?

* How can state governments best promote job growth?

Growth Areas

Far and away the most commonly cited sector for growth, according to just about any expert you ask, is health care.

"The forces driving the growth in health care represent long-term trends," says Michael R. Pakko, chief economist and state economic forecaster at the University of Arkansas-Little Rock. "As the baby boom generation retires, a growing demand for health services will undoubtedly continue."

Pakko and others acknowledged that the Affordable Care Act brings some uncertainty, particularly given the troubled rollout of the HealthCare.gov website. But there's also broad agreement that the upside for the health care industry from the new law could be substantial over the longer term, as the government injects more money into the system by expanding care to previously uninsured Americans.

"If the health care sector adjusts quickly to the new systems, it should have a favorable growth outlook," says James Skurla, director of the Bureau of Business and Economic Research at the University of Minnesota-Duluth.

Two sectors rank a close second for job growth--construction and real estate, and professional services.

For the construction sector, the key to its rebirth is the devastating collapse that began in 2008. "Growth is coming in the areas where most of the losses took place," says Dennis Hoffman, director of the L. William Seidman Research Institute at the Arizona State University's W. P. Carey School of Business.

A Moody's Analytics forecast from mid-October concluded that "housing forms a solid base for growth nearly everywhere, but most highly concentrated in the Southeast and Southwest, where vacancies are among the lowest. Foreclosures are ceasing to be a weight on house prices nearly everywhere outside Florida and Illinois."

Pakko agrees, saying that while the residential real estate market hasn't fully hit its post-recession stride, "it has been showing clear signs of recovery lately, so employment in home construction should begin to pick up."

The professional services sector--a catch-all category that includes everything from accounting to engineering has been taking an increasing share of job growth in recent years, says Doug Henton, the chairman and CEO of Collaborative Economics, a consulting firm based in San Mateo, Calif.

"Since the mid-1990s, the primary driver of new jobs has been the expansion of existing firms, and the strongest growth has occurred in knowledge-based services," Henton says.

Next is information technology, including cybersecurity and data management, though not without an asterisk.

"Information technology, the hot ticket item for the past two decades, is likely to have slower growth in the future as it reaches maturity," says Roger Noll, an emeritus economics professor at Stanford University. "Not a decline, just a slowdown in growth to look more like the rest of the economy."

Technologically advanced manufacturing is also inspiring some hope, though one tempered by the long-term reality of declining manufacturing employment in general. Between March 1998 and December 2009, manufacturing jobs in the United States fell from 17.6 million to 11.5 million. It will take incredible growth to make up for a decade of losses this huge.

But there's hope in recent growth trends. Since 2009, manufacturing employment has grown, slowly but steadily, with the first sustained increases in years. And places that have a history of manufacturing, such as the Pittsburgh area, are...