Life Sciences Update | 2022 October

The Impact of the Economic Slowdown

Employment: R&D in Biotechnology Industry

U.S. Employment Growth by Decade (Average Annual) Largest YoY Growth (+14.5%) in Past 30 Years

Total Employment (U.S.)

Life Sciences (U.S.)

Office-Using (U.S.)

Industrial (U.S.)

Hi-Tech (U.S.)

300

286

7%

6.6%

275

6%

250

5%

225

4%

200

2.9%

2.7%

3%

175 Thousands

2.4%

2.3%

1.9%

1.8%

2%

1.7%

150

1.4%

1.2%

0.4%

0.7%

1%

125

0.5%

0.3%

0.3%

100

0%

2001

2003 2005 2007 2009 2011

2013 2015 2017 2019 2021

1992-2002

2002-2012

2012-2022

Source: U.S. Bureau of Labour Statistics

Source: U.S. Bureau of Labour Statistics

Economic headwinds seem to have slowed the life sciences momentum of the past few years. But as we head into either a recession or a general economic cooling, the sector is well positioned to weather the uncertainty brought on by periods of economic slowdown. Life sciences employment in the U.S. has been resilient in previous recessions, with minor drops during the Dot-Com Recession (DCR) and Great Financial Crisis (GFC). Additionally, life sciences employment did not falter during the pandemic. There was only one month of job losses (April 2020 declined by -0.1%) and YoY job growth was +11.4% in 2021 and +14.5% as of June 2022. Canadian life sciences employment has remained resilient through the pandemic, adding over 13,000 jobs in the sector, a 16% increase from 2019. The UK experienced a slight employment deceleration in the life sciences sector, shedding just over 9,000 jobs since 2019. However, the bulk of the losses occurred in 2020 and the sector has added over 2,000 jobs since then.

Life sciences employment has also outperformed other sectors over the last 30 years. It has outpaced sector growth in the last 10- and 20-year periods and has proved more resilient during recessions. During the DCR, industrial, office-using and hi-tech employment all experienced at least eight quarters of negative growth, while life sciences only experienced two. During the GFC, these sectors also experienced at least eight quarters of negative growth, while life sciences had six. These sectors all experienced at least two quarters of negative employment growth due to the pandemic, while life sciences continued to grow. On a YoY basis, life sciences outpaces these sectors, industrial (4.8%), office-using (4.8%) and hi-tech (5.1%).

10 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER