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CSER Quarterly Economic Report-Q3 2012

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The Center for Strategic Economic Research has released the 2012 Prosperity Index, the bi-annual Sacramento Region Business Forecast update, and the Q3 2012 Quarterly Economic Report.

The Prosperity Index analyzes critical economic indicators that affect the Sacramento Region’s long-term prosperity and competitiveness around the elements of Economy, Residents, Livability, and Sustainability.

The Sacramento Region Business Forecast reports presents and outlook for the Sacramento Region’s job growth and unemployment over the next 12 months.

The Quarterly Economic Report provides an overview of the health and performance of the Sacramento Region’s economy along with an update to the Sacramento Region Business Confidence Index, a collaborative project with the Sacramento Business Journal to measure business sentiment.

Previous editions of these reports are available on the CSER web site (strategiceconomicresearch.org)

THIRD QUARTER REPORT – OCTOBER 2012 

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Q3 Economic Report

The Sacramento Region has seen positive annual job growth for six straight months

The six-county Sacramento Region ended the third quarter of 2012 with annual job growth just below the statewide average. Preliminary data show that between September 2011 and 2012, the number of jobs on payrolls in the Region grew by 1.9 percent, equating to a gain of 15,700 jobs. In comparison, the state grew by 2.0 percent and the nation posted 1.4 percent job growth. Sacramento has seen annual job growth in positive territory since April 2012, illustrating the recovery that is taking place almost two years after the statewide and national turnaround. The Region’s recent job growth has been driven by gains in four of its five largest sectors. Job growth in the Professional & Business Services sector has been steadily increasing since the first quarter of 2012 and ended the third quarter at 3.9 percent with gains primarily in administrative and support services. Trade, Transportation, & Utilities posted 3.1 percent annual job growth in September 2012 as a result of improvements in retail trade corresponding to increasing consumer confidence. Sacramento’s Educational & Health Services sector has seen sustained job growth over the recession with only a small drop off in the third quarter of 2012. Gains in this sector are heavily weighted toward health care activities. The Leisure & Hospitality sector has been volatile over the past few years and shifted back into positive territory in September 2012 with annual increases in the number of jobs at restaurants and bars. Following a brief period of unanticipated annual job gains, the Government sector fell back into negative territory in September 2012 continuing the pattern of annual job losses primarily within state government entities.

Annual job growth has been flat at the national level over the past year. The nation posted 1.4 percent job growth at the end of the third quarter of 2012, the exact same rate as the same point in the previous year. Between September 2011 and 2012, the nation saw an increase of a little over 1.8 million jobs. Conversely, California has continued to see a slight upward job growth pattern ending the third quarter of 2012 with growth of 2.0 percent. Establishments in the state added more than 276,000 jobs to payrolls in the 12 months ending September 2012. California posted the eighth highest rate of growth among states in this period. The SF Bay Area experienced a slight dip in annual job growth over the third quarter of 2012, ending at 2.6 percent (reflecting a gain of nearly 73,000 jobs). Over most of the recovery period, job growth in the SF Bay Area has tracked notably above the statewide and national averages. The robust annual job growth in the Stockton market fell sharply in the third quarter of 2012. In July 2012, Stockton’s annual job growth was 6.4 percent and by September 2012, the rate had dropped to 3.4 percent. Stockton’s September 2012 rate corresponds to an increase of 6,400 jobs. This drop-off was not unexpected due to other sustained difficulties in Stockton’s labor market. Annual job growth in the Solano market also dipped in the third quarter of 2012 coming in at 1.9 percent in September (equating to a 2,200-job increase). For most of the past year, Solano’s job growth was above the statewide and national benchmarks, but dropped slightly below the state in the most recent measure.  

 

Annual Job Growth

 

Annual Job Growth

 

 

Major Sector Annual Job Gains and Losses

Major Sector Annual Job Gains and Losses

Sacramento saw substantial annual job gains in four major sectors

Eight of the Sacramento Region’s major sectors posted job gains in the 12 months ending September 2012. Four of these sectors experienced gains of more than 3,000 jobs including three of the largest sectors (Trade, Transportation, & Utilities; Professional & Business Services; and Educational & Health Services) along with Construction. The preliminary data reveal that Sacramento’s Construction sector has posted positive annual job growth for four straight months with gains dominated by heavy and civil engineering projects as well as specialty trades. Only the Government sector saw significant job declines between September 2011 and 2012 (1,800 jobs) while Information and Other Services lost a combined total of 600 jobs in this period. The net gain of 15,700 jobs in the Sacramento Region moved total Nonfarm employment to 851,200. While an upward trend looks to be emerging, total regional employment is still well below the 2007 peak (down more than 102,000 jobs) and continues to track at year 2001 levels.

California posted annual job gains in seven major sectors. The state’s Professional & Business Services sector experienced the greatest gains with growth spread across professional, scientific, and technical services as well as administrative and support services. Four sectors lost jobs statewide in the past year including Government; Manufacturing; Other Services; and Mining & Logging. Professional & Business Services was the leading growth sector in the SF Bay Area while only Government and Financial Activities shed jobs in this market between September 2011 and 2012. The Educational & Health Services sector saw the largest annual gains in the Stockton market with losses confined to the Government and Other Services sectors. Growth in the Solano market was led by the consumer-driven Trade, Transportation, & Utilities and Leisure & Hospitality sectors. Solano experienced annual job losses in the Government; Manufacturing; and Other Services sectors.

ABOUT CSER

The Center for Strategic Economic Research (CSER) is an economic research and consulting group specializing in applied research and strategy development in the regional economics and economic development fields.

www.strategiceconomicresearch.org

CSER is grateful for the support of the Signature Underwriter, UC Davis Health System, and Supporting Underwriters of the Quarterly Report, Cushman & Wakefield, Los Rios Community College District, Sacramento Municipal Utility District, Sacramento Works, Weintraub Tobin and Wells Fargo.

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