When it comes to profits, the Bay Area’s non-technology companies outdid their technology counterparts in the SV150.

The Bay Area 25 powered to a 7.3 percent gain in profits over the 12 months that ended in March. In contrast, profits for the SV150 slumped 12.4 percent during the same period, this newspaper’s analysis of the financial performance of hundreds of Bay Area companies shows.

Companies that are household names in Corporate America and the consciousness of consumers dominate the non-tech Bay Area 25.

Among them: San Ramon-based Chevron, Pleasanton-based Safeway, Oakland-based Clorox, Pleasanton-based Ross Stores, along with Wells Fargo, PGE, Gap and Visa, all based in San Francisco.

“These are some big companies that directly affect people’s lives,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

Yet the rising profits don’t necessarily mean sales were robust for the non-tech Bay Area 25.

While the SV150 as a group generated a sturdy 9.1 percent increase in sales over the one-year stretch, the Bay Area 25 eked out a puny 0.3 percent gain in sales.

“The non-technology companies were able to capture revenue without having internal higher labor costs and other overhead,” said Michael Yoshikami, chief executive and founder of Walnut Creek-based Destination Wealth Management. “That means increased profitability.”

The profitability of the companies in

the Bay Area 25 also appears to reflect what is happening in Corporate America in general.

“In the non-tech economy, hiring has been very tight,” Yoshikami said. “Non-tech companies have steadily increased their efficiency.”

The non-tech Bay Area 25 also includes numerous banks. And for a growing number of banks, the financial crisis and sour loans that accompanied the downturn have become specks in the respective rearview mirrors of the financial companies.

“With the rebound in the housing sector, banks have been working through some of their financial problems and bad loans,” said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at the University of the Pacific.

Numerous banks have shifted money out of the reserves they had maintained to cover bad loans and allowed the money to flow onto their bottom lines. That has helped to bolster profits.

An analysis of the results shows that financial companies in the Bay Area 25 performed particularly well in the non-tech group.

Of the 11 companies that powered to double-digit increases, eight were in the financial, investment or real estate business. Chevron, Clorox and Pleasanton-based contact lens producer Cooper Cos. were the other three.

Two companies in the Bay Area 25 suffered an erosion in earnings. Profits tumbled 9 percent for San Francisco-based Diamond Foods, a supplier of nuts and snack foods; and by 2 percent for San Francisco-based Prologis, a real estate investment firm that owns numerous industrial properties.

The company in the group with the strongest results for sales was Walnut Creek-based Central Garden Pet, which provides pet, lawn and garden products. Central Garden produced a 73 percent increase in sales.

Santa Clara-based SVB Financial Group, Pleasanton-based Simpson Manufacturing, Chevron and San Francisco-based Digital Realty Trust rounded out the top five for gains in revenue.

“The performance of the non-tech companies shows there is a lot of stuff going on outside of Silicon Valley,” Levy said. “They employ a lot of people. They serve a lot of customers.”

Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at twitter.com/george_avalos.

Article source: http://www.contracostatimes.com/breaking-news/ci_23064540/bay-area-non-tech-companies-were-more-profitable

When it comes to profits, the Bay Area’s non-technology companies outdid their technology counterparts in the SV150.

The Bay Area 25 powered to a 7.3 percent gain in profits over the 12 months that ended in March. In contrast, profits for the SV150 slumped 12.4 percent during the same period, this newspaper’s analysis of the financial performance of hundreds of Bay Area companies shows.

Companies that are household names in Corporate America and the consciousness of consumers dominate the non-tech Bay Area 25.

Among them: San Ramon-based Chevron, Pleasanton-based Safeway, Oakland-based Clorox, Pleasanton-based Ross Stores, along with Wells Fargo, PGE, Gap and Visa, all based in San Francisco.

“These

are some big companies that directly affect people’s lives,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

Yet the rising profits don’t necessarily mean sales were robust for the non-tech Bay Area 25.

While the SV150 as a group generated a sturdy 9.1 percent increase in sales over the one-year stretch, the Bay Area 25 eked out a puny 0.3 percent gain in sales.

“The non-technology companies were able to capture revenue without having internal higher labor costs and other overhead,” said Michael Yoshikami, chief executive and founder of Walnut Creek-based Destination Wealth Management. “That means increased profitability.”

The profitability of the companies in

the Bay Area 25 also appears to reflect what is happening in Corporate America in general.

“In the non-tech economy, hiring has been very tight,” Yoshikami said. “Non-tech companies have steadily increased their efficiency.”

The non-tech Bay Area 25 also includes numerous banks. And for a growing number of banks, the financial crisis and sour loans that accompanied the downturn have become specks in the respective rearview mirrors of the financial companies.

“With the rebound in the housing sector, banks have been working through some of their financial problems and bad loans,” said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at the University of the Pacific.

Numerous banks have shifted money out of the reserves they had maintained to cover bad loans and allowed the money to flow onto their bottom lines. That has helped to bolster profits.

An analysis of the results shows that financial companies in the Bay Area 25 performed particularly well in the non-tech group.

Of the 11 companies that powered to double-digit increases, eight were in the financial, investment or real estate business. Chevron, Clorox and Pleasanton-based contact lens producer Cooper Cos. were

the other three.

Two companies in the Bay Area 25 suffered an erosion in earnings. Profits tumbled 9 percent for San Francisco-based Diamond Foods, a supplier of nuts and snack foods; and by 2 percent for San Francisco-based Prologis, a real estate investment firm that owns numerous industrial properties.

The company in the group with the strongest results for sales was Walnut Creek-based Central Garden Pet, which provides pet, lawn and garden products. Central Garden produced a 73 percent increase in sales.

Santa Clara-based SVB Financial Group, Pleasanton-based Simpson Manufacturing, Chevron and San Francisco-based Digital Realty Trust rounded out the top five for gains in revenue.

“The performance of the non-tech companies shows there is a lot of stuff going on outside of Silicon Valley,” Levy said. “They employ a lot of people. They serve a lot of customers.”

Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at twitter.com/george_avalos.

Article source: http://www.mercurynews.com/business/ci_23064539/bay-area-non-tech-companies-were-more-profitable

MOUNTAIN VIEW — Silicon Valley’s job growth has returned to dot-com boom levels and San Francisco has emerged as a major new tech hub. But good times have not returned for all area residents and ethnic groups.

Those are among the findings released Tuesday from the 2013 Silicon Valley Index, a closely watched annual study produced by San Jose-based Joint Venture Silicon Valley and the Mountain View-based Silicon Valley Community Foundation.

“Employment growth in Silicon Valley is impressive, very impressive,” said Russell Hancock, president of Joint Venture Silicon Valley. “Some might even say the job growth is cause for euphoria.”

Last year, the nine-county Bay Area added about 92,000 jobs, according

to the study. Of that total, Silicon Valley — defined as Santa Clara and San Mateo counties — accounted for 46 percent, or 42,000 jobs.

“This is prodigious job creation,” Hancock said. “The growth is crazy and it’s getting crazier.”

Both he and Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy and an adviser for the report, said Santa Clara County now is above its job totals of the dot-com boom.

Recent Bay Area job growth goes well beyond social media, software, the Internet and other technology industries, showing that the recession is clearly over for the region.

“The tech phenomenon is rippling into other categories,” Hancock said. Construction is one of the

fastest-growing industries in the region, according to the report.

The study also found that San Francisco has emerged as a prominent contributor to what is known as Silicon Valley.

“For a long time we thought of San Francisco as an old-line town — banking, legal, retail, real estate,” Hancock said. “Now it’s tech, software, media, social networks, the Web.”

And that means the definition of Silicon Valley is expanding, the researchers said.

“We have two very dynamic entities, San Jose and San Francisco,” said Doug Henton, CEO of San Mateo-based Collaborative Economics, which did the primary research for the Silicon Valley Index. “They are very complementary to each other.”

During 2012, Santa Clara and San Mateo counties increased their combined job totals by 3.6 percent, while San Francisco grew its job totals by 3.7 percent.

Emmett Carson, CEO of Silicon Valley Community Foundation, said San Jose and San Francisco “are becoming the bookends with many tech companies in between.”

Despite the sturdy job gains, the report found that the upswing in employment and wages has not benefited Bay Area residents equitably.

“Income growth in Silicon Valley is uneven,” it said. “The gap between

high and low income earners is increasing.”

What’s more, certain ethnic groups appear to have been left behind by Silicon Valley’s current surge in hiring and rising wages.

Between 2009 and 2011, per capita income levels increased for whites, Asians and certain other groups. But blacks and Latinos suffered financial erosion. Income levels fell 18 percent among African-Americans and by 5 percent among Latinos, according to the report, but it offered no explanation for the declines.

“Silicon Valley is two valleys,” Hancock said. “There is a valley of haves, and a valley of have-nots.”

Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at Twitter.com/george_avalos.

Article source: http://www.insidebayarea.com/business/ci_22524360/silicon-valley-job-growth-prodigious-returned-dot-com-boom-levels?source=most_emailed

The job markets in the Bay Area and California stalled in March, snapping a string of monthly gains for workers, a report released Friday showed.

While California’s jobless rate improved to 12 percent last month, down from 12.1 percent in February, the state lost 11,600 payroll jobs in March. The Bay Area lost 300, primarily because job totals in the East Bay plummeted by more than 5,000, the state’s Employment Development Department reported.

“We have a long way to go to recover,” said Brad Kemp, director of regional research with Beacon Economics.

During March, the East Bay lost 5,200 jobs, Solano County lost 900 and San Joaquin County shed 1,100 jobs. The job totals were adjusted for seasonal changes.

“This is sobering,” said Michael Bernick, a San Francisco-based research fellow with the Milken Institute. “What is sobering is how much time it’s taking to have an employment recovery, even though we’ve been having an economic recovery.”

The weakest regions of the Bay Area were those that depended the most on a housing boom. The East Bay lost a combined thousands of jobs during March in construction, finance, real estate, retail, restaurants and hotels.

“The housing hangover has not gone away,” said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at University of the Pacific.

In contrast, areas that depend more on the high-tech sector were robust in March. The San Francisco-San

Mateo-Marin region was the strongest Bay Area economy in March, adding 3,600 jobs. The South Bay gained 1,400 payroll jobs, the EDD reported.

“Our future growth sectors continue to do well,” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

“The largest job gains among the large metro areas were found in the coastal high-tech centers of San Diego, Orange County, Silicon Valley and San Francisco — all of which are leading the state in economic recovery,” Levy said.

The loss of nearly 12,000 jobs in California snapped a string of five straight monthly gains for the state. The Bay Area had added nearly 10,000 jobs in January and February before the loss in March.

The Bay Area jobless rate was 9.9 percent in March, unchanged from March, according to an analysis of statistics supplied by Beacon Economics, which tracks local economies.

The statewide labor force continues to shrink, possibly because more people have simply ceased to look for work. When that happens, state and federal government officials no longer count those people as unemployed.

The California labor force dwindled by 21,000 workers in March compared with February. Over a one-year period, the statewide labor force has shriveled by about 200,000 workers.

The East Bay’s weakest employment sectors during March were restaurants and hotels, which lost 1,300 jobs; retail, down 900; government, down 800; and construction, which lost 700 jobs, estimates supplied by Beacon showed.

“Construction has yet to show its typical spring gain, and related sectors like finance are still weak,” Michael said. “Retail is weak.”

Among the East Bay bright spots: professional, scientific and tech services, which includes high-tech jobs, added 700 positions; and manufacturing gained 300 jobs.

“The East Bay job market just hasn’t turned the corner yet,” Kemp said. “But over time, the East Bay will see more demand and more jobs.”

The professional, scientific and tech industry also was the strongest sector in other parts of the Bay Area. That industry gained 1,200 jobs in the San Francisco region, and added 1,400 in the South Bay, Beacon reported.

“Employers will not make massive hires, because they want to stay efficient and keep their long-term labor costs down,” Kemp said. “But at some point they will hire again.”

Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.

Article source: http://www.mercurynews.com/breaking-news/ci_17856798