Research Facts & Figures > Economic Forecasts & Updates > July 2011 Quarterly Update > Quarterly Update

EAST BAY QUARTERLY UPDATE

JULY 2011 EDITION

INTRODUCTION
East Bay EDA is pleased to provide its annual economic forecast for the East Bay, California, and U.S. The report was prepared for East Bay EDA by Dr. Chris Thornberg, Founding Principal, and Jordan Levine, Director of Economic Research, at Beacon Economics.

For PDF versions of this report:

	Economic Forecast, July 2011 (full report)
	East Bay Economic Forecast, July 2011
	California Economic Forecast, July 2011
	U.S. Economic Forecast, July 2011

LABOR MARKET UPDATE — FINALLY HITTING BOTTOM

The East Bay economy is finally hitting bottom, but the labor market recovery will be slow. Several sectors such as professional, scientific and technical services; manufacturing; and transportation and warehousing are picking up, but the construction and government sectors continue to shed jobs. Beacon doesn’t expect employment to pick up steam until 2012 and 2013. Until then it will be slow.

CONSUMER SPENDING AND TOURISM

With taxes nationwide at their lowest level in 50 years, with labor markets no longer in freefall and with incomes on the rise, consumers have begun to feel more comfortable spending and taxable sales have increased for seven consecutive quarters. The East Bay’s visitor and tourism market also seems to be in recovery. Hotel vacancies are down, rates are rising and 1,200 jobs have been added since this sector hit bottom. The East Bay’s leisure and hospitality sector should continue to grow as a weak dollar makes the East Bay more attractive to locals and foreign visitors alike.

PORT STILL A HIGHLIGHT

The Port continues to bolster the East Bay Economy. Exports through May were up 25% over last year’s total through May. Part of that is due to a weak dollar, but the Port of Oakland is also increasing its market share of export traffic out of California. The growth of Port activity will help increase transportation and warehousing activities in the East Bay.

SECOND HOUSING STORM OVERBLOWN

The housing market is recovering, but like the labor market, progress will be slow. The recent slowdown in home sales and prices is a reflection of the expiration of government housing programs in 2010, not a decline in housing fundamentals. Defaults have declined for the past two years and in some areas prices are increasing. Low interest rates will prevent any further deterioration of the market.

COMMERCIAL REAL ESTATE

Commercial real estate is still struggling. Due to lagging employment the office market is particularly sluggish, but declining vacancy rates for office, retail, and industrial space indicate the market is moving in the right direction. More solid employment growth in 2012 and 2013 will precipitate a stronger recovery in the East Bay’s commercial markets.

SPONSORS:

THE CITIES & COUNTIES OF Alameda Antioch Albany Berkeley Brentwood Concord Town of Danville Dublin El Cerrito Emeryville Fremont Hayward Hercules Livermore Martinez Newark Oakland Oakley Piedmont Pinole Pittsburg Pleasant Hill Pleasanton Richmond San Leandro San Ramon Union City Alameda County Contra Costa County

CONTACT This report was prepared by: Scott Peterson Deputy Director (510) 272-6843 East Bay EDA 1221 Oak St., Ste. 555 Oakland. CA 94612 For more information on the East Bay, click on www.eastbayeda.org

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