Job gains predicted in Sonoma County economic forecast
Strong economic growth and low unemployment rates last year have set the stage for Sonoma County to see continued growth in 2024, a UCLA economist told attendees Thursday at the Sonoma County Economic Development Board’s 2024 Economic Perspective at Sonoma State University.
“Fairly robust demand is expected to keep the economy growing,” said Jerry Nickelsburg, faculty director of UCLA Anderson Forecast, and adjunct professor of economics at the UCLA Anderson School of Management.
Rapid payroll and agricultural employment gains since 2020 led to a 2.8% increase in job growth in Sonoma County in 2023, and contributed to a low 3.7% unemployment rate, said Nickelsburg.
He said those positive events occurred as the county’s labor force shrank by 0.2% in 2023, during a period of robust employment.
Most sectors grew last year, he said, led by leisure and hospitality, construction, health care and social services — all with 6% job gains.
“Last year was marked by superior tourism growth and a return to normalcy evidenced by the number of passengers coming through the Charles M. Schulz-Sonoma County Airport, in addition to a desire for more closer-to-home travel destinations,” Nickelsburg said.
The sectors that saw a drop in job opportunities were mainly in the retail, professional and business sectors, he said. But the biggest decline was among farm jobs, dropping by 2%, which noted is common at year’s end due to poor weather conditions.
California forecast
A comparison of gross domestic product (GDP) by states shows California with 13% growth and in 7th place behind Florida, Arizona, Tennessee, Washington, Texas and Colorado, all of which are higher than the 10% growth rate for the U.S. as a whole.
While the professional scientific and technical services payroll in California has risen to almost 1.5 million people, tech job growth has stalled – for now.
However, Nickelsburg said Northern California has become the prime target area for venture capitalist investments, especially for Artificial Intelligence companies.
Nickelsburg forecasts California employment growth to be 0.3% in 2024 and 0.9% in 2025. The unemployment rate is estimated at 4.5% in 2024 and 3.8% in 2025, he said.
Housing growth
The homebuilding sector is poised for growth, Nickelsburg said, following a marked drop in existing single-family home sales in 2020, and a subsequent steep rise in median home prices in San Francisco and other parts of the state from 2020 to 2023. He also expects to see new housing laws and more industrial building activity.
New building permits were up 7.6% to approximately 9,000 units per a 3-month moving average at the end of 2023 — following the strong pandemic surge — and were higher than the pre-COVID era’s 4.1%.
Single-family housing permits as a percentage of total residential permits per month were holding steady at between 50% and 60%, he said.
Editor’s note: This story has been amended to reflect the professional scientific and technical services payroll in California has risen to almost 1.5 million people, from January 2000 to December 2023, not dollars.
