Slumping Market May Dent East Bay, Calif., Growth
Construction employment losses linked to the faltering California housing market may slow the East Bay job market, researchers warned Thursday.
According to the Contra Costa Times, more than 3,000 construction jobs are expected to vanish in the East Bay from 2007-2009, according to a report from the Business Forecasting Center at University of the Pacific.
“The weakness in housing is slowing job growth,” said Sean Snaith, a consultant for the Stockton-based forecasting center and a University of Central Florida economist.
Still, the Alameda-Contra Costa County region will continue to add jobs during the coming years, forecasters said. The area should create about 33,550 jobs in that 2007-09 period, an average of just more than 11,000 each year.
But that pace would be well below the recent annual average for job gains in the area.
In past years, low California mortgage rates spurred record home buying and subsequent employment gains.
“The East Bay will be weaker than it has been the past year and a half,” Snaith said. “The East Bay bucked the trend for a while and was stronger than the rest of the state. But the economy is finally cooling off.”
That would be a reversal of the East Bay housing market’s fortune. The region fended off much of the devastation unleashed by the dot-com meltdown that ravaged the economies of the San Francisco-San Mateo area and the South Bay.
While California will average job growth of 1.2 percent from 2007 to 2009, the East Bay is expected to add jobs at a yearly pace of 0.9 percent in 2007, 1 percent in 2008 and 1.2 percent in 2009, the university center predicted in a quarterly update.
The prognosticators say that because of myriad concerns over California home loan and housing activity, job growth won’t exactly sparkle in other Bay Area regions. Here is their assessment for the pace of employment expansion in selected markets during 2007:
- San Francisco-San Mateo-Marin counties area, up 1.2 percent.
- Santa Clara County, up 0.6 percent.
- Solano County, up 1.2 percent.
- Sonoma County, no change.
- San Joaquin County, up 1.2 percent.
Yet while home builders scramble to sell their oversupply of homes, they will curb hiring of construction workers. Even so, people in the building and construction trades in the East Bay are still finding employment in sectors that are expanding more rapidly than housing.
“The bond measures have created, and will continue to create, considerable amounts of work in some of our major markets, commercial and public works,” Callan said. “We don’t see a downturn.”
Callan said plenty of openings exist for the construction of big industrial projects and commercial real estate buildings. Contractors also are eager to hire people for street, highway, and bridge projects.
So when might the home building ailments abate and the home mortgage loan demand return to the area?
Joseph Perkins, president of the San Ramon-based Home Builders Association of Northern California, says the sluggish times are about at an end.
“What I hear from my members is, the situation during the first quarter of 2007 is better than the fourth quarter of 2006,” Perkins said. “They are cautiously optimistic that the second and third quarters of this year will be better.”
SOURCE: Contra Costa Times