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Fastest growth in life sciences; risks on education, incomesSOLANO COUNTY -- No longer considered to be a rest stop between the Bay Area and Sacramento, Solano County is making its mark as an emerging center for micro business employment and life sciences, although the region faces increasing challenges on education and incomes.

These observations are among findings reported in the Solano County 2010 Index of Economic and Community Progress, third edition, prepared by Collaborative Economics for the Solano Economic Development Corp.

By far the fastest growing industrial group in the county is Life Sciences, expanding by 7 percent a year, with 2,100 employees.

[caption id="attachment_29405" align="alignleft" width="266" caption="Mike Ammann, president of the Solano Economic Development Corporation"][/caption]

“These trend numbers reveal that our community and business leaders have made wise choices on how to grow both physically as well as how to connect economically as the heart of a growing 12 million consumer Northern California Mega Region,” said Mike Ammann, president of the Solano Economic Development Corp.

“In 30 short years, Solano’s economy has changed from a pair of agriculture and government services-based industry segments into a diverse economy with five major new clusters, including life sciences along with biotechnology, renewable energy production, professional services and higher education, state-of-the-art health care centers and logistics.”

“This insightful document provides an objective analysis of key indicators shaping our local economy,” said Michael Reagan, chair of Solano County Board of Supervisors. “Even with the realities of the recession, we see reasons for optimism and signs of resiliency.”

With an economy dominated by small businesses, local employment in micro-enterprises (those with 10 or fewer employees) continues to outpace total employment gains in Solano representing 36 percent of total county employment, up from 24 percent in 1995.

Total employment in micro-enterprises grew by 68 percent during the same period – exceeding total county employment, which grew by only 14 percent.

Even during the recession, the number of establishments opening (3,400 businesses opened or moved into the county between January 2008 and 2009) has eclipsed the number closing (1,000) or moving out of the county.

Between 1995 and 2009, the annual number of establishment openings was nearly double the number of closings.

Furthermore, some 18 percent of businesses coming into Solano came from outside California in 2008-‘09.

Several trends are impacting the region:

Economy

While monthly job losses in Solano fared better than California in recent years, real per capital income has declined in the county more than the state as a whole as earnings declined (with the greatest measure of stability derived from the presence of Travis Air Force Base, employing over 15,000, resulting in personal income gains).

Per capita and median income

As incomes stagnated across the nation in recent years, since 2008 the income gap between Solano County and the nation was at its lowest since 1990.

Median household income has fluctuated over the past 10 years from a high of $75,000 in 2000 to a low of $66,000 in 2004.

In 2009, median household incomes fell by 7 percent to $66,700, resetting incomes to 2006 levels.

Between 1990 and 2008, total personal income increased by 47 percent in Solano County (52 percent statewide).

However, in the most recent reported year, personal income decreased in both Solano (-1 percent) and California (-2 percent).

Demographics

The population of Solano County (427,837) has continued to grow at just half a percent since 2006, driven by foreign immigration (+1,571 compared with a drop in domestic immigration (-1,364), but this growth rate is slower than in the Bay Area and California.

Since 2000, Solano’s population has grown 8 percent -- by some 32,350 residents.

Housing

In the wake of the mortgage crisis, Solano has been compelled to adjust to the realities of housing foreclosures.

From 2008-‘09, foreclosures fell in the county by 22 percent (4,100) compared to 20 percent in California (189,800), after declining since 2006. Foreclosures fell again by 2 percent in the first half of 2010.

While housing sales declined in 2006-‘07, in 2008-‘09 home sales improved reaching 8,100, a 67 percent increase from 2007 levels. The average price of Solano homes stabilized in 2010.

Total bankruptcy filings per 1,000 people are higher in Solano than California. The most dramatic increases took place between 2007 and 2010 when filings rose from 1.9 to 8.9 per 1,000 of population.

Education

With more than 40,000 university and college students in Solano, the next generation preparing for jobs in the county is ready to take its place.

While many working adults have some college -- a bachelor’s, graduate or professional degree representing an increase of 26 percent -- the county faces a challenge in preparing the future workforce.

Even with rising educational levels and a more qualified workforce, the high school dropout rate continues to increase across all ethnic and racial categories.

The dropout rate jumped 6 percent rising to 28 percent in 2009. At the same time, the percentage of high school graduates that meet both UC and CSU eligibility requirements increased by 1 percent.

Solano’s high school graduation rate fell to 74 percent and the state’s rate declined to 79 percent during the 2008-‘09 school years.

Public finance

Revenues from sales taxes and fees have declined putting restraints on support for community services. Property taxes, which were rising until 2008, will continue to fall due to lower housing assessments.

Aggregated city revenue dropped by 12 percent from 2007-08 to 2008-09 covering all tax categories and other revenue sources.

Jobs

In 2009, 77 percent of Solano employees were residents of the county.  While employment decreased by four percent from 2008 to 2009, resulting in a loss of 5,500 jobs, employment increased 12 percent in Professional & Environmental Services and 19 percent in Life Sciences.

Current county employment is estimated to total 117,700 jobs. From November 2009 to 2010 the rate of unemployment slowed significantly, nevertheless, 1,000 residents were added to the unemployment rolls last year.

Another category worth noting is the number of non-employers, individuals or partnerships with no employees.  This sector has grown 14 percent since 2002, but dropped by five percent from 2007 to 2008.

The largest percentages of non-employers are in Other Services and Professional, Scientific and Technical Services industry clusters, each representing 15 percent.

From 2007 to 2008, the strongest growth area was Administrative Support, Waste Management and Remediation Services, with a gain of 22 percent.

Access to health care

While this access category is becoming more limited, according to Index findings, Solano County residents are more likely than those in the rest of the state to have health insurance.

However, as a result of rising unemployment, the percentage of residents covered through their employers dropped from 64 to 54 percent in 2009.  The uninsured made up 20 percent of Solano residents.

Commuting

Solano is positioned to benefit from its geographical location. Of the 76,164 residents who commute to work out of Solano, 19,700 chose employers in Contra Costa County.

The number of residents commuting to Sacramento increased 27 percent and by 52 percent to San Mateo.

The number of people commuting to work in Solano from Sacramento totaled 17 percent and from Napa 31 percent.

Driving patterns

Vehicle miles traveled (VMT) per capita has increased in Solano as gas prices declined. From 2008 to 2009, gas prices in the county increased five percent while California gas prices declined 23 percent.

Over the long term since 1997, VMT grew eight percent, while gas prices increased 54 percent from 1995 to 2009.

Largest industrial clusters

The biggest cluster in Solano County is Professional & Environmental Services, with 22,200 employees, representing the largest portion of micro-enterprise jobs and 67 percent of the overall industry cluster.

With employment shares 30 percent higher than the statewide average in 2009, construction is the most concentrated industry segment in Solano and the second highest cluster employing 16,300.

The construction cluster is followed by Health and Social Services, with 11,600 employees; Trade and Logistics (7,800); Specialized Manufacturing (3,900), and by the Advanced Food and Beverage Manufacturing sector (2,600).

By far the fastest growing industrial group in the county is Life Sciences, expanding by 7 percent a year, with 2,100 employees.

“These trend numbers reveal that our community and business leaders have made wise choices on how to grow both physically as well as how to connect economically as the heart of a growing 12 million consumer Northern California Mega Region,” said Mike Ammann, president of the Solano Economic Development Corporation.

“In 30 short years, Solano’s economy has changed from a pair of agriculture and government services-based industry segments into a diverse economy with five major new clusters, including life sciences along with biotechnology, renewable energy production, professional services and higher education, state-of-the-art health care centers and logistics.”

To view the 2010 Economic Index visit www.solanocounty.com/economicindex.