With a name like “Economic notes,” once in a while we need to delve into fundamentals of economics in California. This week, we provide our readers with a quick snapshot of California’s performance during the just-ended fiscal year as well as a glimpse at some interesting statewide trends.
California’s annual job growth during the period June 2012-13 ranked 18th in the country. According to a second-quarter report written by the Center for Strategic Economic Research, California added 236,200 jobs during this period. California also posted stronger job growth than the nation as a whole in half of its major sectors, including Accommodation and Food Services; Construction; Transportation and Warehousing; Educational Services; Arts, Entertainment and Recreation; and Utilities.
While other states, such as Idaho, Texas, North Dakota, Colorado and Utah, did have faster growth, California had a deeper trough to climb out of and the recent trends are encouraging.
California is a big state, so general statistics smooth out regional trends. The CSER report noted that the economies in the Bay Area and Central Coast regions remained among the healthiest in the state. The Santa Cruz-Watsonville area is listed in the top tier for annual job growth with 6.3 percent.
Other top areas included San Luis Obispo-Paso Robles; San Jose-Sunnyvale-Santa Clara; Napa; Stockton; San Francisco-San Mateo-Redwood City; and Vallejo-Fairfield (which showed 2.5 percent annual job growth). It’s good to see economic and job growth return, both locally and regionally.
We also recently reviewed other interesting published economic data that we think may be of interest to our readers. Beacon Economics/HdL Companies quarterly reports provide local government agencies with information on national and statewide economic drivers and statewide sales tax trends.
HdL/Beacon Economics’ July 2013 snapshot notes that California’s residential construction market is booming, with nearly 60 percent growth in residential building permits pulled over the same point in 2012. This has led to some growth in construction trade employment, helping to reduce overall unemployment. Interestingly enough, multifamily residential structures have accounted for more than half of all newly permitted units.
Fairfield has shared in this growth, with 146 residential permits in the first half of the year. If the overall housing market continues to improve (the median price of existing single-family homes has increased at a double-digit pace), we can anticipate further growth. Fairfield is certainly seeing more inquiries about available land and development sites.
Other noteworthy snapshots from the HdL reports include:
Food-drugs: A new emphasis on smaller-footprint grocery stores expanding into established market areas is adding to already-fierce competition for traditional grocers. Chains, looking for ways to differentiate themselves, are offering prepared or organic foods, value-priced house brands and new or expanded in-store cafes, bakeries or meat counters.
Auto-transportation: Manufactures suspect that the overall rebound in auto sales is nearing a plateau and are offering additional rebates, sub-prime loans and extended borrowing periods to sustain the current pace. Increased inventory is expected to result in lower new- and used-car prices in the coming months. Though demand will continue, the rate of sales growth is expected to be more moderate in the second half of the year.
Restaurants-hotels: Consumer demand for dining out remains strong and restaurant operators are reporting modest gains in same-store sales. Fast casual food chains are expanding vigorously and contributing to higher receipts in this group. Travel and tourism is rebounding and contributing to the increase in receipts from hotels and restaurants.
Fuel-service stations: Americans are buying more fuel-efficient cars and driving less, which is holding down consumption while a combination of slowing foreign demand and increased output of U.S. crude oil has helped level oil prices. Barring interruptions in California’s limited refinery and transmission system, further price increases are not expected beyond the usual seasonal adjustment.
Fairfield exhibits many of economic trends noted above, with new drug stores opening (Walgreens), investment by specialty food retailers such as Mexico Meat Market in new product lines to further differentiate themselves, the continuing rebound of the Fairfield Auto Mall and further investment at Solano Town Center mall.
Economic Notes is an update from Fairfield City Hall written by Brian Miller and Karl Dumas of the Fairfield Planning and Development Department. Reach them at 428-7461 or email at firstname.lastname@example.org or email@example.com.