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Sonoma County job growth outpaces rest of California, says expert

Jennifer Baird with Nelson Staffing talks to job applicants at the job fair at the Hilton Hotel in Santa Rosa in 2010.

PD FILE, 2010
Published: Wednesday, January 23, 2013 at 10:10 a.m.
Last Modified: Thursday, January 24, 2013 at 8:36 a.m.

Jobs are being created faster in Sonoma County than in any other county in California, although growth will slow later this year, a prominent economist said Wednesday.

"Enormous progress has been made here," said Jerry Nickelsburg, a senior economist at the widely watched UCLA Anderson Forecast. "You all are outperforming everywhere else in the state."

Both the Bay Area and the nation as a whole are heading into a period of slower economic growth, although the local economy should outperform the rest of the country, Nickelsburg told nearly 500 local business executives and civic leaders Wednesday at the annual State of the County forum held in Rohnert Park.

But the region's economy staged a steady comeback in 2012.

Although year-end figures are not yet available, employment in Sonoma County grew 4.9 percent during the 12-month period ending in November, excluding farm jobs, according to the county Economic Development Board.

"Even during very difficult times, our business growth has been strong," EDB Executive Director Ben Stone said. "This is a sign that points to a high level of economic activity, a healthy business environment and a good predictor of job growth."

Two of the hardest-hit industries during the recession -- manufacturing and construction -- have been among the fastest-growing local sectors in the past year, the EDB report said.

"Sonoma County has managed to recover some 17,000 of the 25,000 jobs we lost since 2008," said Supervisor David Rabbitt. "Even so, we recognize that there is more that needs to be done."

The region is shifting from an industrial economy to one based on the flow of information, resulting in job growth in education and information; professional, scientific and technical services; and advanced manufacturing.

Nickelsburg described the state's economy as divided into "two Californias." One, the coastal region, has a thriving economy based on technology, trade and information. The other, the inland region, has been slower to recover, in part because of its reliance on migration, construction and growth in government.

Last year, Sonoma County was straddling that dividing line, but in the past year it has shifted economically to fit into the coastal profile, Nickelsburg said.

"The line no longer goes right through Sonoma County . . . which is good news, because the inland economies are still mired in slow growth," he said.

As the economy improves and North Bay residents develop more wealth, there likely will be continued growth in health care, leisure and hospitality, and personal care services, Nickelsburg said.

But households that lost equity in their homes during the recession are still building up their savings, rather than spending on consumer goods, contributing to slow economic growth, he said. Export growth also was slowed by the recession in Europe and Japan and slowdown in the "BRICs," the large, developing markets of Brazil, Russia, India and China.

Normally after a recession, the gross domestic product grows at a rate of 5 to 7 percent, Nickelsburg said, but in the past year GDP growth nationwide has hovered around 2 percent. Consumer spending, which makes up 70 percent of GDP, has stalled at around 2 percent, while households with lower home equity rebuilt their savings.

"All households in America are trying to push up their savings rates in order to provide those resources for the future," Nickelsburg said. "Now, that's not a bad thing. But when people are trying to push up their savings rates, they're pushing down their consumption."

Looking ahead, about 25 percent of the county's workforce is likely to retire in the next 10 years, raising the need for career training and development, Stone said.

In manufacturing, 20 percent of the current workforce is eligible to retire, and in the health care field, 25 percent are eligible.

"We are facing, they call it, a 'silver tsunami' coming forward, with a lot of people retiring," Stone said.

The "sub-par" growth means national unemployment will still hover around the 7.7 to 8 percent range, Nickelsburg said.

"In Sonoma County, almost all the recession is over with," Nickelsburg said.

"Even though the U.S. is going to slow, so you're going to expect slower growth in Sonoma as well in the next year, we still expect it to be much more rapid than the rest of the U.S., and continued progress to be made," he said.

You can reach Staff Writer Cathy Bussewitz at 521-5276 or cathy.bussewitz@pressdemocrat.com.

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