Economist: Sonoma County wage, job growth outpaces rates for state, nation
Competition for workers in Sonoma County is “very tight,” with jobs and pay rising faster here than in the rest of the nation, an economist told a few hundred local business and civic leaders in Rohnert Park.
The county’s unemployment rate is hovering at 4 percent compared to U.S. rate of around 5 percent. The annual job growth is at 2.8 percent, ahead of the U.S. at 1.9 percent, said Steve Cochrane, Ph.D., managing director of Moody’s Analytics.
“There’s little slack in the labor market,” Cochrane told 310 business, education and public sector leaders at Sonoma County Economic Development Board’s annual Spring Economic Forecast Conference, about the U.S. overall. “By the end of summer, I expect the economy to be at full employment, with the labor supply and demand in balance.”
While Sonoma County has been increasing employment, job growth in surrounding areas has been faster, he said. San Francisco, Marin, Napa and Solano counties have had growth rates of 3.3 percent to 4.4 percent.
Yet local wage and salary growth continues to out pace the state and nation, he said. Sonoma County pay increased an estimated 8 percent last year, ahead of 7 percent growth for all of California and 4.2 percent for the country. Average per-capita income in Sonoma County grew from $34,000 in 1995 to just under $45,000 in 2014–2015, based on 2009 dollars.
With a rising economy and increasing demand, the housing vacancy rate is at a low 3.48 percent in the U.S., and home prices are beginning to out pace both rents and income, Cochrane said.
And as wages have been rising, local consumers have been cutting debt, he said. Consumer loan balances in Sonoma County have steadily declined since 2009, excluding first mortgages, student loans and auto loans.
“This means small-scale lending can be scarce,” he said.
Despite that scarcity, Sonoma County entrepreneurs have been more active than the nation overall, Cochrane said. The number of new private establishments in the county grew by 2.8 percent, for the 12 months ending in the third quarter of last year. That edged ahead of the U.S. startup growth rate of 2.7 percent during that time.
Local businesses are having tougher times finding places to sell, store and ship their wares and supplies. The commercial vacancy rate for office space at the end of last year was just over 16 percent in Sonoma County, but industrial vacancy was under 6 percent and retail around 4 percent, Cochrane noted.
Being a tourist destination has helped Sonoma County have more tourist heads in lodging beds than the state or nation, Cochrane said. The county’s hotel occupancy rate rose to 76 percent, ahead of California’s 74 percent and the national rate of 65.5 percent.
And wine has been a big draw for visitors, especially to the North Coast. California remained the top U.S. wine producer, out-producing other domestic and international supply for U.S. consumers. The state’s production last year was 270 million cases, compared with just more than 200 million cases elsewhere in the U.S., including imports.
Cochrane explored job growth for Sonoma County’s creative and professional cluster employment, a focus of the county’s Creative Sonoma program. Employment fell from a high of 12,500 jobs in 2008 to under 8,000 positions in 2012. However, this cluster has rebounded to an estimated 9,100 positions this year.
Design and consulting jobs lead the creative cluster. Scientific consulting made up 30 percent of that category at the end of last year, followed by engineering and design jobs, 24 percent; software and technology, 23 percent; journalism, advertising and media, 15 percent; and arts and entertainment, 4 percent.