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South Bay becomes Bay Area’s strongest job market

Bay Area job market surges — but “warning signs” surface

The hot Bay Area job market powered to a strong finish in 2019, with Santa Clara County delivering more than half of the jobs added in December, according to state employment data released Friday. Overall, the Bay Area added 91,500 jobs during the year, 2.3 percent more than in 2018.

Yet despite the improvement for the entire year, some indicators suggest the employment gains in the Bay Area became less robust as 2019 wore on.

In December, the nine-county Bay Area added 2,900 jobs, a monthly report by the state’s Employment Development Department showed.

Santa Clara County gained 1,500 jobs, the East Bay added 900 positions, while the San Francisco-San Mateo region lost 400 jobs, according to the EDD report. All the numbers were adjusted for seasonal variations.

The Bay Area job market wound up being considerably stronger in 2019 than in 2018.

Employers in the Bay Area added 91,500 jobs during 2019, which was 2.3 percent more than the 80,500 jobs the region added in 2018, this news organization’s analysis of the EDD report showed.

But the job gains slowed during the year.

Over the first six months of 2019, the Bay Area added 66,700 jobs. But over the final six months, job gains totaled 24,800.

“There are warning signs for Bay Area employment trends,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “We are seeing slowing population growth, which is a warning sign. Unless more people move here, employers face hiring challenges.”

Of the three major urban centers in the Bay Area that have at least 1 million jobs, the South Bay was the strongest last year, the analysis of the EDD data determined.

In 2019, Santa Clara County added 33,200 jobs, compared with a gain of 29,800 in the San Francisco-San Mateo area and 19,800 positions in the East Bay.

“The Bay Area economic story, particularly in the South Bay, is that companies want to expand, they want to hire people here,” Levy said. “The question is where will companies find people to hire, given the high housing prices and the slow pace of building new homes.”

The tech industry in the Bay Area and California is providing plenty of fuel for the regional and statewide economies, according to economist Sung Won Sohn.

“Technology has healthy upward momentum,” Sohn stated on Friday in his analysis of the statewide job picture. “Professional and business services, which includes scientific and technical services such as software engineers, system analysts, and scientific research and development, remains a workhorse in the state’s economy.”

The California jobless rate was 3.9 percent in December, which kept the unemployment rate statewide at the lowest level on record.

California added 12,600 nonfarm payroll jobs last month, the EDD reported. For all of 2019, California added 310,300 jobs, according to the EDD report.

“The potential for more employment growth ahead is good” in California, Sohn wrote in his report.

California’s job market grew at an annual pace of 1.8 percent, well ahead of the nationwide increase in nonfarm payroll jobs of 1.4 percent.

Yet both the state and the nation lagged far behind the pace of the Bay Area. During 2019, nonfarm payroll job totals increased by 2.9 percent in Santa Clara County, 2.6 percent in the San Francisco-San Mateo region, 1.7 percent in the East Bay, and by 2.3 percent in the Bay Area.

Santa Clara County’s strongest industries in December were manufacturing, technology, and the leisure and hospitality industry, according to an analysis compiled by Beacon Economics and UC Riverside.

The South Bay added 900 manufacturing jobs, 600 tech positions and 700 jobs in leisure and hospitality, which is made up of the restaurant, hotel, arts, and entertainment sectors.

The East Bay added 1,100 leisure and hospitality jobs, 600 tech positions, and 500 manufacturing jobs, Beacon and UC Riverside reported. However, construction was a weakling with a loss of 1,000 jobs in December.

The job setbacks in the San Francisco-San Mateo region were caused primarily by the loss of 1,100 jobs in transportation and warehousing, 400 in retail, and 300 in technology, according to the Beacon and UC Riverside analysis. The strongest industry in the San Francisco-San Mateo metro area in December was leisure and hospitality, which added 1,100 jobs, and construction, which gained 800.

During the first six months of 2019, Santa Clara County added 22,100 jobs, while the San Francisco metro area gained 22,300. But over the final six months, Santa Clara County gained 11,100 jobs, and the San Francisco-San Mateo region added just 7,500 positions.

“There appears to have been some movement of tech workers from San Francisco to Santa Clara County,” Vitner said. “Some of the big Silicon Valley campuses have opened, and there are more seats and more room for employees in Silicon Valley than in San Francisco.”

People who previously held part-time positions may now be landing full-time employment and jobs with better wages, according to Vitner.

“It seems that hiring is coming from the ranks of the under-employed,” Vitner said. “People who may have had temporary or part-time employment are now finding permanent jobs in other industries.”

Despite the warning signs, Levy believes tech companies are still anxious to find employees in this region.

“Companies want to be here, they want to hire here,” Levy said.

 

 

 

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