Wednesday, November 16, 2011

The Bay Area will Outpace California in Job Growth Next Year

Still, the Bay Area is at least two years away from recapturing the jobs lost during the recession, stated a separate forecast by Beacon Economics.

"The job market has definitely hit the bottom," said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at UOP. "Things are starting to improve and move toward growth."

Yet the upswing has been virtually invisible. The recession is technically over, according to experts, yet for many, the economy still feels like it's in a downturn.

"It has very much been a U-shaped recovery," Michael said. "We've been sitting on the bottom for at least a year, if not longer."

That could begin to change in 2012, the UOP forecast predicted. The three major urban centers in the Bay Area are expected to show employment expansion of greater than 1.5 percent next year, the Business Forecasting Center said.

The East Bay job market is due to expand by 1.6 percent, which would reverse what's expected to be a 0.1 percent decline in payroll jobs in 2011 and a 2 percent drop in 2010.

The South Bay is expected to expand 1.9 percent in 2012. That would be sturdy growth, but slower than the 2.4 percent job expansion that was projected for 2011.

The San Francisco-San Mateo-Marin metro region is expected to experience a 1.6 percent increase in jobs in 2012, faster than the 0.6 percent growth anticipated for this year.



If all of those growth rates hold true, the Bay Area's three main metro regions would be expanding more quickly than California.

Statewide job growth is expected to be 1.1 percent in 2012. That would be slightly slower than the 1.2 percent expansion anticipated in 2011 for California, the UOP researchers said.

In 2012, payroll jobs are expected to be added throughout the Bay Area, according to Beacon Economics. The East Bay should add 22,000 new payroll jobs, the South Bay should add 17,000 jobs and the San Francisco metro area should add 17,750, estimated Jordan Levine, an economist with Beacon.

While an upswing is welcome, the Bay Area nevertheless must confront a brutal reality: Since the region's last employment peak in July 2007, the nine-county region has lost almost 219,000 jobs.

"It's still going to be years before we get back to the old job levels," Michael said.

To underscore the canyon into which the Bay Area economy tumbled amid the depths of the recession, the region during the one-year period that ended in September added 41,000 jobs.

Some parts of the Bay Area will reclaim their vanished jobs more quickly than others.

"The South Bay shows the most promise to get back to its pre-recession levels, and it should be followed most closely by the San Francisco metro area," said Jon Haveman, chief economist of the Bay Area Council's Economic Institute.

The laggard in bouncing back is expected to be the Alameda County-Contra Costa County region.

"The East Bay has to dig out of a bigger hole than the South Bay or the San Francisco area," Haveman said.

The South Bay should regain its pre-recession peak by the end of 2013, Beacon Economics analysts said.


"Because of the boom in tech, the South Bay has the highest median incomes in the Bay Area," Levine said. "The South Bay also has high levels of educational attainment. Those are the kinds of things you need to bolster job growth."

Next up in the recovery pipeline is the San Francisco-San Mateo-Marin region, which is expected to be back to its old job levels by 2015.

The East Bay is projected to reclaim the jobs it lost during the recession by sometime in 2016, according to Beacon Economics.

"The worst is over," Michael said.

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