Sacramento Region Economic
Conditions and Outlook
Yolo Leaders
June 20, 2012
CSER Publications
Presented By
Ryan Sharp, CEcD, CSER Director
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VALIDATION &
PEER REVIEW
INDUSTRY
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ECONOMIC &
DEMOGRAPHIC
PROFILES
ECONOMIC &
TAX IMPACT
STUDIES
ECONOMIC
DEVELOPMENT
STRATEGIES
MARKET &
FEASIBILITY
ANALYSES
POLICY
ANALYSIS &
PROGRAM
EVALUATION
SUPPORT
CORE SKILLS:
•Economic & demographic analysis & forecasting
•Regional economics & economic development practices
•Market & feasibility analysis
•Econometric & input-output modeling
•Social science research & survey design
•Strategic planning & collaborative processes
•Performance measurement
•Geographic Information Systems
Current Conditions
Annual job losses persisted through first quarter
Annual Job Growth
5.5%
5.1%
5.0%
4.5%
4.0%
3.6%
3.5%
3.0%
2.6%
2.5%
2.0%
1.5%
1.0%
0.5%
1.6%
1.4%
1.5%
1.1%
0.4%
0.0%
-0.1%
-0.5%
-1.0%
-0.4%
-0.5%
-1.5%
-2.0%
-0.7%
-0.8%
-0.6%
-1.2%
-1.7%
-1.9%
-2.5%
-3.0%
-3.5%
-4.0%
-4.5%
Mar-11 Apr-11 May-11 Jun-11
Sacramento Region
Jul-11
California
Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
United States
SF Bay Area
Data Sources: CA Employment Development Department and U.S. Bureau of Labor Statistics
Stockton
Solano
Sacramento one of weakest regions in
country for annual job growth
tipstrategies.com/geography-of-jobs
Two of three largest sectors lost jobs in past year
Sacramento Region Largest Sector Annual Job Growth
5.0%
4.0%
3.0%
2.6%
2.0%
2.3%
1.0%
0.4%
3.1%
1.3%
1.0%
0.0%
-1.0%
-1.0%
-1.3%
-2.0%
-3.0%
-4.0%
-5.0%
-5.5%
-6.0%
Mar-11
Apr-11 May-11 Jun-11
Government
Jul-11
Prof. & Business Svcs.
Aug-11 Sep-11
Trade, Trans., & Util.
Data Source: CA Employment Development Department
Oct-11
Nov-11 Dec-11
Leisure & Hospitality
Jan-12
Feb-12 Mar-12
Edu. & Health Svcs.
Private sector added jobs in last 12 months
Major Sector Annual Job Gains and Losses
Sector
Total Nonfarm
Private Sector
Public Sector
Edu. & Health Svcs.
Trade, Trans., & Util.
Prof. & Business Svcs.
Other Services
Financial Activities
Mining & Logging
Manufacturing
Information
Construction
Government
Leisure & Hospitality
Sacramento
Region
California
-1,200
1,300
-2,500
3,300
1,800
1,000
900
700
24
0
-200
-1,524
-2,500
-4,700
Data Source: CA Employment Development Department
217,500
261,800
-44,300
59,600
54,200
80,000
-3,600
5,500
700
2,900
16,300
12,400
-44,300
33,800
March 2011-2012
SF Bay
Area
71,400
77,800
-6,400
14,900
9,300
25,200
6,000
-900
0
1,500
7,800
6,600
-6,400
7,400
Stockton
9,300
8,700
600
1,700
2,800
1,000
0
300
0
1,600
0
400
600
900
Solano
4,200
4,900
-700
1,000
1,200
200
0
200
100
100
100
500
-700
1,500
Total employment at 2001 / 2002 levels
Sacramento Region Total Nonfarm Employment
1,000,000
953,400
950,000
900,000
838,600
850,000
800,000
808,100
750,000
700,000
Data Source: CA Employment Development Department
Regional unemployment continued to decline
Unemployment Rate (Seasonally Adjusted Annual Average)
17.0%
16.4%
16.0%
18.0%
17.3%
19.0%
16.0%
9.0%
9.2%
11.1%
11.5%
12.0%
12.0%
12.2%
12.8%
11.3%
10.3%
8.7%
10.0%
9.4%
11.0%
10.5%
12.0%
9.7%
13.0%
11.9%
14.0%
12.1%
15.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Mar-10
Sacramento Region
Mar-11
California
United States
Mar-12
SF Bay Area
Data Sources: CA Employment Development Department and U.S. Bureau of Labor Statistics
Stockton
Solano
Real unemployment almost double reported rate
Reported and Real Unemployment Rates
(Seasonally Adjusted Annual Average, Q1-12)
8.7%
United States
15.6%
11.5%
California
0.0%
20.8%
5.0%
Data Source: U.S. Bureau of Labor Statistics
10.0%
15.0%
20.0%
25.0%
Majority of prospects in Manufacturing field
SACTO Business Location Prospect Company Type, through March 2012
60%
55%
50%
40%
30%
20%
14%
12%
10%
8%
7%
3%
1%
0%
Manufacturing
Information Technology
Service-Related
Call Center
Biotechnology
Other
Data Source: Sacramento Area Commerce and Trade Organization
Distribution
Most prospects from other states and countries
SACTO Business Location Prospect Origin, through March 2012
60%
50%
42%
40%
30%
25%
20%
19%
10%
7%
6%
0%
Outside U.S.
Other States
Southern California
Data Source: Sacramento Area Commerce and Trade Organization
SF Bay Area
Local (Expansion)
Economic Outlook
Stable growth expected for state
Increase in business sentiment
Sacramento Region Business Confidence Index—First Quarter 2012
Sacramento Region Business Confidence Index
Index Score 0 to 100 (Over 50 = Positive Perceptions)
65
60
56
55
55
50
49
55
52
51
49
46
49
49
48
45
60
59
57
56
55
50
46
40
37
35
30
25
26
23
20
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
BCI
Industry conditions vs. 6 mo. ago
Industry conditions 6 mo. from now
Sac Region conditions vs. 6 mo. ago
Sac Region conditions 6 mo. from now
Data Source: Center for Strategic Economic Research-Sacramento Business Journal Business Confidence Survey conducted
between March 1, 2012 and March 31, 2012—participants were asked to provide their assessment of the Sacramento Region’s
business climate and their industry for the previous and upcoming six months
Note: Responses to the questions are scaled from 0 to 100 in the following manner: Substantially Better = 100;
Moderately Better = 75; Same = 50; Moderately Worse = 25; Substantially Worse = 0.
Positive annual job growth for most of next year
Sacramento Region Annual Job Growth Outlook
April 2012 to March 2013 Forecast
1.5%
Past 12 Months
Average = -0.9%
Next 12 Months
Average = 0.5%
1.0%
0.5%
0.4%
0.0%
-0.1%
-0.5%
-0.5%
-1.0%
-1.5%
Published
“Wild Cards”:
Global
economic
conditions
-2.0%
State budget
effects
Data Sources: Historical from CA Employment Development Department; Forecast from CSER Business Forecast model
Most major sectors will see
much healthier conditions
Major Sector Annual Average Job Growth Outlook
Q2-12 to Q1-13 Forecast, Sorted by Sector Size
Sector
Total Nonfarm
Government
Trade, Trans., & Util.
Edu. & Health Svcs.
Prof. & Business Svcs.
Leisure & Hospitality
Financial Activities
Construction
Manufacturing
Other Services
Information
Mining & Logging
Past 12
Months
-0.9%
-2.3%
0.4%
3.2%
-1.1%
-1.9%
-1.3%
-5.3%
0.2%
-0.3%
-1.6%
-6.3%
Next 12
Months
0.5%
-0.7%
0.8%
1.2%
6.7%
-2.0%
-3.2%
-5.3%
2.9%
2.8%
-4.1%
20.1%
Q2-12
-0.1%
-1.2%
1.2%
2.3%
2.6%
-3.2%
0.3%
-7.3%
0.8%
2.6%
-2.1%
23.5%
Q3-12
0.7%
0.0%
1.5%
1.7%
6.8%
-3.7%
-1.8%
-4.8%
3.0%
2.3%
-4.7%
36.7%
Q4-12
0.7%
-0.5%
0.6%
0.2%
8.5%
-1.3%
-5.0%
-3.3%
4.5%
3.4%
-5.5%
23.7%
Data Sources: Historical from CA Employment Development Department; Forecast from CSER Business Forecast model
Q1-13
0.5%
-1.1%
0.0%
0.5%
9.1%
0.1%
-6.3%
-5.8%
3.2%
2.9%
-4.3%
-3.7%
Unemployment rate will continue to ease
Sacramento Region Unemployment Rate Outlook (Seasonally Adjusted Annual Average)
April 2012 to March 2013 Forecast
13.0%
12.8%
12.5%
12.1%
12.0%
12.0%
11.5%
11.0%
10.8%
10.5%
10.0%
9.5%
Mar-10
Mar-11
Mar-12
Mar-13
Data Sources: Historical from CA Employment Development Department; Forecast from CSER Business Forecast model
Thank You!