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Bay Area construction stages big rebound

Tue, 23 Apr 2013 10:57:53 +0000

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The Bay Area’s construction industry is enjoying its strongest job growth in years, a remarkable turnaround for a sector that was battered by the vicious meltdown of the housing market and the implosion of commercial real estate.

The construction sector added 13,800 jobs in the Bay Area during the 12 months that ended in March, its best performance in seven years.

“The Bay Area construction market is punching above its weight class now,” said Scott Anderson, chief economist with Bank of the West.

Over the most recent 12 months, the construction industry added jobs at nearly four times the pace of overall job growth in the Bay Area.

The construction sector expanded its job totals by 10.5 percent,

compared with a growth rate of 2.7 percent for total jobs in the Bay Area.

Much of this is tied to increased demand to buy homes, along with tech firms hungry for office space.

“Housing has really turned the corner,” said Jordan Levine, an economist and director of research at Beacon Economics. “We are seeing more homebuilders jump into the fray.”

The Bay Area in March had 144,800 construction jobs. That’s 26.4 percent fewer than March 2001, the year the construction sector had its highest levels of employment.

“The industry has changed and it will be a long time before it gets back to the heights it once had, if it ever does,” said Michael Bernick, a research fellow with the Milken Institute.

To be sure, high

tech remains the employment leader that hauls other industries forward, as shown by the gains produced by two sectors considered to be proxies for the high-tech sector.

Professional, scientific and technical services added 22,600 jobs during the 12 months that ended in March, a 6.2 percent increase. Information services and products gained 4,600 jobs, up 3.8 percent.

But the rebound in the building industry broadens the types of workers who benefit from the Bay Area’s strong economy.

“Construction is a very big part of blue-collar job and income growth,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “It brings a whole different set of people into the economic recovery. It makes the rebound more than just high tech.”

Technology, though, appears to be playing the key role in the construction boom.

Numerous tech companies, including Google (GOOG), Apple (AAPL) and LinkedIn, have been striking lease deals or buying property in a quest for offices to contain their fast-expanding operations.

In tandem with this tech growth, the South Bay is the strongest job market for construction.

Over the 12 months that ended in March, the building industry in Santa Clara and San Benito counties added 4,000 jobs, a 12.3 percent gain. Another tech-oriented region, the San Francisco-San Mateo-Marin area, added 3,100 jobs for a 9.3 percent gain during the year.

Even the East Bay (Alameda and Contra Costa counties), which was especially hit hard by the housing recession, gained 4,800 jobs during the 12 months, for a 10.1 percent annualized gain.

“The trades like electrical, plumbing and framing

seem to be picking up the best,” said Daniel Stout, a San Jose resident whose expertise is in construction management, as well as carpentry and electrical trades.

The big problem amid the upswing: Wages remain soft.

Over the most recent 12 months available — ending in March 2012 — average pay for construction workers rose more slowly than the average pay for all workers in the Bay Area, according to an analysis by this newspaper of data compiled by the state’s Employment Development Department.

The average pay for all workers in the Bay Area is $65,878, the department figures show, while construction workers’ average pay was $61,211. For all workers in the Bay Area, pay rose 4.2 percent a year, while for construction workers, the increase was 0.3 percent over the 12 months that ended in March 2012.

Stout would often work for $25 to $50 an hour just a few years ago, before the recession. Now, general contractors want to pay around $15 to $25 an hour.

“Things are picking up, but it’s never going to be to the point where we were eight or 10 years ago,” said Bow Peterson, a San Jose resident and construction and project manager. “Back then, clients didn’t look at my prices. They just wanted to know when the job would get done.”

Still, the combination of the housing rebound and the surge in commercial real estate suggests the construction upswing has some staying power.

“The improvement in construction should have legs,” Levy said. “This has a way to go and it will broaden the economic recovery.”

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_23081495/bay-area-construction-stages-big-rebound?source=rss

Bay Area Economy Could Fizzle if Recovery Fails to Broaden Beyond High Tech …

Tue, 01 Nov 2011 22:42:45 +0000

Oct. 31 (Source: By George Avalos, Contra Costa Times, Walnut Creek, Calif.) - High-tech job growth has sparked the Bay Area’s rebound from the recession, but experts warn that the region’s economy could stall unless other industries start to hire.Over the first nine months of 2011, the technology industry added 26,200 workers, 65 percent of all the jobs created in the Bay Area, this newspaper’s analysis of data compiled by state officials and Beacon Economics shows. High-tech jobs account for 18 percent of the Bay Area’s workforce.

“If the Bay Area jobs recovery doesn’t broaden, it is in danger of fizzling out completely,” said Scott Anderson, senior economist with Wells Fargo Bank.

The key, according to a number of economists, would be a recovery in the long-troubled housing industry.

“We need a normal housing market,” said Jeffrey Michael, director of the Business Forecasting Center at University of the Pacific in Stockton. “We have to have a construction industry that has a pulse.”

Much in the way the financial industry bolsters New York City’s economy, real estate is an economic bulwark for the Bay Area. Real estate and high-tech produce strong ripple effects throughout the economy, creating many jobs in many industries.

“Technology workers are more likely to buy a home, make home improvements or go to the spa,” said Jon Haveman, chief economist with the Bay Area Council’s Economic Institute. “They will dine out more often. They spend more at the mall.”

Much the same is true with the

housing industry. Rising demand spurs construction of new homes and apartments. Newly purchased houses are filled with furniture, often new. Backyards receive upgrades, with the help of frequent trips to the hardware store or garden supply shop. Mortgage providers hire loan agents. Commissions for real estate agents swell. Those virtuous cycles vanished when the housing bubble popped.

The employment gains in the Bay Area housing sector during the peak year of 2005, compared with now, illustrate the problem. In the first nine months of 2011, Bay Area construction companies added 3,200 jobs. Over the first nine months of 2005, construction gained 4,700 jobs. The difference is akin to a Solyndra solar plant. The contrast is even starker in the finance, insurance and real estate sectors, which have numerous jobs linked to housing. In the first nine months of 2011, Bay Area financial businesses shed 1,500 jobs. During the same nine months of 2005, financial companies added 3,100 jobs. That 4,600-job swing equates to a NUMMI factory.

“We don’t need construction to go all the way back to the 2005 levels,” Michael said. “But it has to get off the floor, to improve from these abnormally low levels.”

For now, the thousands of new jobs in construction are a welcome sign.

“Things are looking a little better,” Brent Judd, a project supervisor for Tilton Pacific, said of local construction activity. “It’s not dramatic. But things have stabilized.”

Tilton Pacific is the general contractor for a new shopping center in Pleasanton that will be anchored by a big Safeway store. Joining construction in the upswing are transportation and warehousing, which gained 9,500 jobs, and retail, which added 2,300 jobs. Even the battered manufacturing sector rose by 3,900 jobs.

“We are hiring people all the time,” said Nathan Tyson, an engineer at Chevron’s refinery in Richmond.

He started a few years ago as a tank turnaround engineer for the Richmond refinery. He now works as a design engineer at the plant.

The improvement in retail is significant because it reflects a stronger job market in other sectors. If residents are working, they are more likely to shop. New entrants into the supermarket sector, coupled with Safeway’s store expansions and revamps, also may have spurred some hiring.

Fresh Easy and Sprouts Farmers Markets have been opening new stores. REI opened a new store in Dublin. Auto dealers have been growing. Whole Foods and Sunflower Farmers Markets have announced, or recently opened, new stores in the Bay Area.

Safeway held a jobs fair recently for its new Pleasanton store. The supermarket estimated that 600 people showed up in person and 1,000 applied online.

“We ended up hiring 240 employees,” said Susan Houghton, a spokeswoman for Safeway.

Despite the hopeful signs, weaknesses persist in the Bay Area — meaning it will take years to fully recover. Arts and entertainment, hotels and dining and beverage establishments, along with government, have shed jobs lately.

“It’s going to take a certain amount of time to bleed off the excess debt in the economy because of the credit and housing bubbles,” said Michael Yoshikami, chief investment officer with Walnut Creek-based YCMNet. “We won’t see a meaningful jobs rebound for a few years.”

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

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Visit the Contra Costa Times (Walnut Creek, Calif.) at www.contracostatimes.com

Distributed by MCT Information Services

A service of YellowBrix, Inc. Publication date: 2011-10-31

Source: By George Avalos, Contra Costa Times, Walnut Creek, Calif.

Article source: http://www.loansafe.org/bay-area-economy-could-fizzle-if-recovery-fails-to-broaden-beyond-high-tech-industry

Bay Area economy could fizzle if recovery fails to broaden beyond high tech …

Mon, 31 Oct 2011 10:01:16 +0000

High-tech job growth has sparked the Bay Area’s rebound from the recession, but experts warn that the region’s economy could stall unless other industries start to hire.

Over the first nine months of 2011, the technology industry added 26,200 workers, 65 percent of all the jobs created in the Bay Area, this newspaper’s analysis of data compiled by state officials and Beacon Economics shows. High-tech jobs account for 18 percent of the Bay Area’s workforce.