The Bay Area powered to strong job gains in June, a state labor report revealed Friday, easing fears that the region’s economy was tottering on the edge of a downturn.
Robust competition for many tech-related jobs, however, has prompted some temporary workers to pursue other vocations, and while the region turned around from recent weakness and added jobs last month, economists say the Bay Area’s tight housing market is still acting as a ceiling on job creation by making it harder for companies to recruit talented workers.
In June, Santa Clara County added 2,600 jobs, the East Bay gained 1,900, and the San Francisco-San Mateo region added 4,900 positions, according to the state Employment Development Department. All the numbers were adjusted for seasonal changes.
“This was a good bounce-back month for the Bay Area,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.
The Bay Area’s gains contrasted sharply with a weak employment result statewide: California lost 1,400 jobs in June.
In Santa Clara County, after suffering job losses in three of the first four months of 2017, the South Bay has enjoyed consecutive job gains the past two months.
Similarly, the Bay Area — after losing jobs during three of the first five months of 2017 — managed to bounce back with a gain of 11,100 jobs overall during June.
Nevertheless, the Bay Area and all three of its major urban centers endured a weaker economic performance during the first half of 2017 than in the same period in 2016.
The Bay Area gained 15,100 jobs in the first half of this year — far below the nine-county region’s addition of 54,400 jobs a year earlier, this publication’s analysis of the EDD figures shows.
“The Bay Area is growing significantly more slowly now than it was last year, which was slower than the prior years,” said Christopher Thornberg, principal economist and founding partner with Beacon Economics.
Santa Clara County lost 1,300 jobs in the first half of this year, versus a year-earlier gain of 11,700; the East Bay added 1,600 jobs, contrasting with a year-earlier gain of 13,500; and the San Francisco-San Mateo region added 12,500 jobs, well behind the 22,500 jobs gained in the first half of last year.
“It’s not that companies don’t want workers; they want to hire,” Thornberg said. “The complaints that I’m hearing about is that companies just can’t find workers.”
The failure of many Bay Area cities to approve residential construction at a brisk enough pace to keep up with the expanding job market could increasingly crimp the region’s ability to add jobs. As a result, the area labor market continues to grow, but can’t do so at the torrid pace of recent years.
“Rising home prices and expensive apartments are driving people out of this market,” Thornberg said.
Some job seekers said that despite the generally healthy employment market, it’s not always easy to find work, even in the booming tech sector.
“Tech companies are being pretty picky in hiring people right now,” said Mark Phan, a Fremont resident who recently received a university degree in computer sciences. “I’m surprised that it’s been this difficult to find something.”
Robert Wood, a San Jose resident, has well over a decade of experience in tech and web graphics design, but his patience with a succession of tech jobs on a contract basis evaporated recently.
“I was a graphics designer for 15 years, and now I’m an apprentice plumber,” Wood said.
The Bay Area’s soaring cost of living was a major reason behind his decision to switch careers.
“Usually you get contract positions in tech and sometimes they turn into full-time jobs,” Wood said, “but it’s so competitive in tech that when employers post a job, they get 200 applicants in the first 30 minutes. I have bills to pay, so this time I couldn’t sit around and wait for a job to show up.”
Wood is optimistic about his new career path.
“I’m learning a skilled trade, and that’s where a lot of the openings are,” Wood said.
Despite some job seekers’ trepidation, the tech sector posted a robust performance in June, at least in the principal employment hubs for Silicon Valley, according to a Beacon Economics assessment of the EDD report.
Tech companies added 1,300 jobs in Santa Clara County and 1,200 in the San Francisco-San Mateo region.
Santa Clara County also added 800 health care positions and 600 retail jobs, but lost 300 construction jobs.
The East Bay’s strongest industry in June was administrative services, which added 2,100 jobs. That industry includes clerical and building support jobs as well as temporary staffing positions. The Alameda and Contra Costa counties area also added 600 hotel and restaurant jobs and 500 construction jobs. However, the East Bay also lost 700 jobs in the finance, insurance and real estate sector.
The San Francisco-San Mateo area’s strongest industry was hotels and restaurants, which gained 2,600 jobs, but that region also lost 1,000 health care jobs.
“The job market is still growing, and the expansion is far from over,” Levy said. “Big companies are still planning to expand, as we see with Google, Facebook and Apple. But we need housing, or this area just can’t keep growing the way it has been. The economy still looks good if we can get the housing for the workers.”
