Though a diverse industrial base and strategic location for transportation and trade helped protect the East Bay during the previous downturn of the early 2000s, the region has lost many jobs in the current recession. Much of the East Bay’s job growth over the past decade was focused in the construction, FIRE (finance, insurance and real estate) and retail trade sectors which were the first to be hit by the housing and financial crises.
2003–08 Employment Growth
The East Bay’s largest industries are government, professional and business services, retail trade and the educational and health services. From 2003 to 2008, the East Bay had a net increase of 4,000 payroll jobs, with a majority of growth taking place in many of these sectors as well as in the leisure and hospitality sector.
Losses during the 2003–08 period were concentrated in financial activities (-16.7 percent), information (-14.7 percent), manufacturing (-5.1 percent) and government (-3.1 percent). At its onset, the national recession took its toll on the East Bay’s finance, mortgage and banking cluster, where losses were most severe in credit intermediation (-28.3 percent); securities, commodity contracts & investments (-24.5 percent) and residential-rental & leasing services (-16.9 percent). Less significant losses in financial services employment occurred in the San Francisco (-3,800 jobs) and San Jose (-300 jobs) regions. Professional and businesses services, which includes computer, scientific, technical, administrative and management professions, was the largest growth sector for the Bay Area during the 2003–08 period, adding 16,500 jobs in the East Bay; 34,000 in San Francisco and 11,100 in San Jose.
2008–09 Employment Growth
Between July 2008 and July 2009, the East Bay’s construction sector, which had previously been buoyed by the expanding housing sector continued to contract, shedding 10,000 jobs over the 12-month period. During this period, educational and health services employment was the only sector to see an increase in the thousands, adding 7,700 jobs while sectors such as retail trade, government, professional and business services and manufacturing encountered steep losses.
Employment Looking Forward
Layoffs in some of the East Bay’ hardest-hit sectors have slowed. In the first 7 months of 2009, financial services shed 1,300 jobs compared to 5,600 jobs lost in 2008 and 5,300 jobs lost in 2007. Construction, which lost 7,100 jobs in 2008, had only contracted by 1,200 by July 2009. As government employment trends typically follow those found in the private sector, it is expected that this sector will continue to post losses as the private sector passes through the current recession.
According to the Manpower Employment Outlook Survey for the July to September 2009 period, employers in the Bay Area remain cautious during this time of readjustment.1 Only 11 percent of Bay Area employers plan to hire more employees during the next quarter, compared with 15 percent at the national level, and 16 percent of Bay Area employers reported plans to reduce payrolls, while only 13 percent had similar plans at the national level.
East Bay Payroll Employment by Industry
In 2008, the East Bay’s largest industries were government, professional and business services, educational and health services and retail trade. Construction, retail and professional and business services have all seen declines as a result of the recession, and by the beginning of 2009, the government sector had begun to incur losses as well.
Hotel Occupancy Rates
Hotel occupancy rates are commonly used to determine a region’s popularity for tourism and business travel. As hotels in the East Bay and San Jose regions cater primarily to business travelers, occupancy rates in these regions tend to be less affected by seasonal changes than those in the San Francisco market, which serves substantial proportions of both business travelers and tourists. According to the most recent data available, the average occupancy rate for East Bay hotels was 60 percent in July of 2009, a decrease from 70.5 percent in July 2008.
Venture Capital Investment
Venture capital investment in the East Bay region declined significantly in a comparison of first quarter data from Pricewaterhouse Coopers for both 2008 and 2009. In this comparison, biotech, IT and networking and equipment were the only sectors to see an improvement over the previous year, while industries where investment was particularly high in the previous year, such as industrial and energy, software and computers and peripherals, saw large decreases.
Bay Area Retail Sales by County
Retail sales indicate a region’s economic performance, the spending power of its residents, attractiveness to shoppers from outside the region, as well as sales tax revenue collected at the municipal level. In 2008, sales in the East Bay counties of Alameda and Contra Costa combined made up the largest share of sales throughout the Bay Area region. In Alameda County, over $15 billion in sales were reported, and in Contra Costa County the figure was over $1 billion.
Bay Area Retail Sales by Year
After years of continuous growth in retail sales and expansion of retail outlets around the Bay Area, in 2007 and 2008 sales leveled off. In the East Bay, sales topped over $15 billion in 2008 before leveling off, while in San Francisco sales were approximately $10 billion and in Santa Clara County sales reached over $21 billion.
Annual Retail Sales by East Bay City
Within the East Bay, a comparison of retail sales in 2003 versus 2008 showed that a majority of cities saw an increase in sales, with the cities of Brentwood (up 92 percent), Fremont (up 46 percent), Danville (up 22 percent) and Antioch (up 21 percent) seeing the largest increases in sales. The cities of Oakland, Fremont, Concord and Hayward bring in the largest share of retail sales dollars throughout the East Bay region, with Oakland reporting over $2.7 billion dollars in 2008.
1 Manpower Employment Outlook Survey for 3rd Quarter 2009, released July 2009.