South Bay expected to recover lost jobs by 2014; recovery slower in East Bay

The current economic boom will be robust enough for the South Bay to recover the jobs it lost during the recession by 2014 — but the East Bay and the San Francisco metro regions might need until at least 2015, the chief economist with the Bay Area Council Economic Institute said Wednesday.

“Every industry in the South Bay is growing except for construction and retail,” said Jon Haveman. “The East Bay is very much hurting, and it may continue to do so for a while.”

Haveman gave his divergent outlooks at a downtown Oakland conference sponsored by Torrey Pines Bank.

One big reason for the differing paces of recovery is that the East Bay tumbled into a much deeper economic abyss, an analysis of state Employment Development Department figures shows.

Since payroll employment peaked in the East Bay in August 2007, it has lost about 105,000 jobs. In contrast, the South Bay’s employment peak came in March 2008, and it has since lost about 38,000 jobs. The San Francisco-San Mateo-Marin region peaked in July 2008, and since then has shed 47,000 jobs.

The East Bay remains 10.2 percent below its peak employment levels, while the San Francisco area is down 5.5 percent and the South Bay is down 4.5 percent. California overall is down 6.7 percent.

“The South Bay will come through this like a champ and get back to the peak pretty quick,” said Brad Kemp, an economist with Beacon Economics. “The San Francisco area is close behind. The

East Bay has had almost no recovery whatsoever.”

The sheer number of lost jobs and the duration of the downturn aren’t the only challenges to confront the Alameda County-Contra Costa County region. It also is limited in the kinds of jobs it can create.

The South Bay’s tech sector offers an array of products and services in high demand among consumers and companies alike. But Haveman noted that the East Bay “doesn’t have that sector to drive a recovery.”

“For the East Bay, the real issue is the area’s economy is being redefined,” Kemp said. “Who is it? What is it? That’s what the East Bay is trying to find out.”

The East Bay depended heavily on residential construction and an upswing in the mortgage industry to fuel its employment growth a few years ago. The housing meltdown most likely erased those jobs permanently.

Also, the shutdowns of two big factories in Fremont underscore the uncertainty. The closure of the NUMMI auto plant in April 2010 erased 4,700 jobs. Tesla Motors (TSLA) has taken over the plant and plans to build its all-electric Model S there, but it remains unclear how many jobs that will create. Meanwhile, solar maker Solyndra’s shutdown in August 2011 jettisoned 1,100 jobs.

Edward Del Beccaro, managing director for the Walnut Creek office of realty brokerage Grubb Ellis, said promising trends in the Bay Area for 2012 include Silicon Valley’s tech economy, apartment construction and commercial real estate activity. The weakest sector, he said, is single-family residential construction.

The best hope for an East Bay economic upswing may be to capture overflow tenants from its neighbors.

“Tech companies are filling spaces in the South Bay and rents are rising,” Del Beccaro said. “As office rents rise in San Francisco and Santa Clara County, you will see some companies migrate to the East Bay.”

Contact George Avalos at 925-977-8477. Follow him at

East Bay


Estimated number of jobs lost since its hiring peak in August 2007

South Bay


Estimated job loss since employment peaked in March 2008

West Bay/North Bay


Estimated job loss since hiring peaked in July 2008

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