| | | | EAST BAY JUNE 2006 MONTHLY ANALYSIS | | The East Bay Monthly Analysis is prepared by East Bay EDA staff to augment the East Bay Quarterly Forecast authored by economists at the UCLA Anderson Forecast. Monthly and quarterly reports may be viewed and subscribed to for free by going to: www.edab.org/newsletter.html. East Bay EDA welcomes your comments and suggestions. Send your email to srbrown@edab.org or call us at (510) 272-6843. For a more printable (PDF) version of this newsletter, click here. THE EAST BAY IN MAY 2006
* The East Bay unemployment rate was 4.1% in May, down from 4.3% in April.
* Between April and May of 2006, East Bay payroll employment climbed 5,900 jobs to reach 1,059,300 - the highest level since June 2001
* East Bay home sales continued to decline, while median home prices continued to increase, reaching a new high
* East Bay residential and non-residential construction permits increased by $74 million from April 2006 to May 2006
* The City of Fremont issued permits for 41 multi-family units in May 2006 (the most in the East Bay)
* The Contra Costa County Unincorporated Area was the largest East Bay issuer (143) of single-family unit permits in May 2006
* The Contra Costa County Unincorporated Area issued a total of $67,774,633 in construction permits in May 2006 - the most in the East Bay
* The East Bay averaged a 12.3% vacancy rate for office space in the first quarter of 2006
* East Bay hotel occupancy increased by 0.1% and average daily room rates by 5.5% in April 2005 to April 2006 comparisons
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 5.6% in the first quarter of 2006, according to final estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 1.7%. The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, equipment and software, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. In addition to these areas, the acceleration in Real GDP growth reflected PCE for durable goods and was partially offset by a downturn in private inventory investment... (Click here for more on GDP and Corporate Profits)). COST OF LIVINGThe Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5% in May 2006, before seasonal adjustment. The May level for US Cities of 202.5 (1982-84=100) was 4.2% higher than in May 2005.  On a seasonally adjusted basis, the CPI-U advanced 0.4% in May 2006, following a 0.6% rise in April. Energy costs continued their advance--up 2.4% in May. Within energy, the index for petroleum based energy increased 4.8%, while the index for energy services fell 0.6%. The food index increased 0.1% in May. Shelter costs rose 0.4% in May, while Bay Area Shelter costs were virtually unchanged, increasing less than 0.01%% The annual growth rate of the US City CPI was 4.2% higher in May 2006 than in May 2005. In May 2006 the Bay Area’s annualized Shelter cost increase was 1.93%, close to half a percentage point less than April’s increase of 2.41%. Increases have remained above 1% since December 2005... 
(Click here for more on CPI). The unemployment rate in the East Bay was 4.1% in May 2006, down from 4.3% in April 2006, and below the year-ago estimate of 4.8%. This compares with an unadjusted unemployment rate of 4.6% for California and 4.4% for the nation in May 2006. Within the East Bay, Alameda County’s unemployment rate was 4.2% in May 2006, down from 4.4% in April, and Contra Costa County’s rate was 3.9%, down from 4.1% in April. 
Between April and May of 2006, 400 jobs were added to the East Bay’s labor force, San Francisco added 700 to its work force, and San Jose lost 200. A comparison of May 2006 with May 2005 shows the East Bay with 2,700 fewer, San Francisco with 12,100 less and San Jose with 9,600 fewer. 
In terms of Employed Residents, all three regions experienced increases between April and May of 2006. In the East Bay there were 2,600 more employed residents, in San Francisco 1,600 more and in San Jose 1,200 more. A comparison of May 2006 with May 2005 shows the East Bay with 3,000 more jobs, San Francisco with 6,200 fewer jobs and San Jose with 3,600 fewer jobs. 
Between April and May of 2006, East Bay payroll employment climbed 5,900 jobs to reach 1,059,300 - the highest level since June 2001. During the same period, San Francisco added 3,200 jobs and San Jose added 2,000 jobs....(Click here for more on Bay Area Workforce, Employed Residents & Payroll). Between April 2006 and May 2006:
· Sunny weather brought more construction jobs (up 1,400 jobs), mainly in specialty trade contractors (up 900 jobs).
· Leisure and hospitality added jobs (up 1,200 jobs) in arts, entertainment, and recreation (up 700 jobs), and accommodation and food services (up 500 jobs).
· Government picked up 1,100 jobs. Most of the expansion occurred in local government (up 900 jobs), including local government education (up 500 jobs), and city government (up 200 jobs).
· Manufacturing showed the largest April to May gain since 2000 by adding 300 jobs. A comparison of the East Bay’s manufacturing sector May 2005 and May 2006 and shows an improvement of 500 jobs. Residual-food manufacturing gained 200 jobs over the past month, while computer and peripheral equipment manufacturing and residual-communications equipment manufacturing each lost 100 jobs. Compared to May 2001, total manufacturing is down 19,800 jobs... (Click here for more on East Bay Payroll Employment by Sector). HOUSINGSales of Bay Area homes declined for the fourteenth month in a row in May as prices continued to slowly edge up, according to Data Quick Information Systems. A total of 9,064 new and resale houses and condos were sold in the nine-county region last month. That was up 8.4% from 8,358 in April, but down 19.8% from 11,308 in May 2005. Last month was the slowest May since 2001 when 7,864 homes were sold. Since 1988, the strongest month of May was May 2004 with 12,028 sales. The slowest month of May since 1988 was in 1995, when only 5,779 were sold. The median price paid for a Bay Area home was $631,000 last month, another record. That was up 0.5% from April 2006's $628,000, and up 6.1% from $595,000 in May 2005. However, last month's year-over-year increase was the lowest since May 2003 when the $427,000 median was up 3.4%.... 
(Click here for more on Housing). Over 60% of the Bay Area’s manufacturing market is located in the East Bay, which contains approximately 92.2 million square feet of manufacturing space. In the first quarter of 2006 the East Bay’s manufacturing vacancy rate was 6.0%, up from 5.1% in the fourth quarter of 2005. Oakland, Hayward and San Leandro, which contain the largest shares of East Bay manufacturing space, recorded vacancy rates of 3.7%, 3.2% and 5.5%, respectively. San Leandro was one of only 9 Bay Area manufacturing sub-markets to show improvement compared to the first quarter of 2005. Richmond’s vacancy rate of 15.4% was the highest in both the East Bay as well as the Bay Area as a whole. (Click here for more on Vacancy). The East Bay experienced increases in both Residential and Non-Residential Permits from April 2006 to May 2006. In June 2005 commercial projects in the Vallejo-Fairfield region brought the non-residential permit total for the month to $235,082,563. In the San Francisco region non-residential permit values reached highs of $197,338,296 in November 2005, and $248,035,828 in January 2006. All of the Bay Area regions experienced an in crease in the total value of all the construction permits issued in the last month – April 2006 compared to May 2006. Napa experienced the greatest percentage increase (139.7%), while the East Bay had the largest dollar increase in permits issued with $74,043.268 with Vallejo-Fairfield second in dollar value ($51 million) and in percentage increase ($52.4%). Region | April 06 ’05 VS. May ‘06 | Percent Change | East Bay | $74,043,268 | 24.5% | Napa | $22,252,255 | 139.7% | San Francisco | $51,191,669 | 21.2% | San Jose | $42,101,500 | 16.1% | Vallejo Fairfield | $51,227,478 | 52.4% |
Comparing the twelve-month period ending May 2006 with the same period ending May 2005, The East Bay, San Francisco and Vallejo-Fairfield metro areas saw increases in the value of both residential and non-residential permits issued. In Napa and San Jose, residential permit values decreased... (Click here for more on Construction Permits). The PKF Consulting report on hotel trends for April 2006 shows a 6.2% increase in room rates throughout Northern California. The East Bay’s average daily room rate showed a 5.5% year-to-year increase, and is now ranked 7th in Northern California. In the Napa County and Monterey/Carmel areas, room rates saw small decreases of -3.3% and -2.4%, respectively. Hotel occupancy percent remained above 60% for all regions, with the average for Northern California remaining at 70.2% for the second month in a row. In Napa County occupancy percent decreased -17.4% from April of 2005, while the San Jose/Peninsula region experience the greatest increase of 10.2%. (Click here for more on Hotel Occupancy). | | 
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