Job growth in most of California's urban areas -- including San Francisco, the South Bay and the East Bay -- will continue in 2019, but at a slower pace than in recent months, according to a Los Angeles-based economic research firm.
That slower growth is nonetheless accompanied by falling unemployment in all California metropolitan markets. The shrinking labor pool, and the high cost of housing, will dictate job growth, or lack of it, over the next few years, Robert Kleinhenz, executive director of research for Los Angeles-based Beacon Economics, said.
He said that, in all areas but especially in the Bay Area, that addressing the high cost of housing will be key to long-term growth.
"Economic growth is going to continue in California, but 2019 is looking like the year when the jobs slowdown we've anticipated for some time begins to materialize," Kleinhenz said. "It is highly unlikely that industries in the state's biggest urban centers -- from tech to professional business services to construction -- will be able to hire at the same pace we have seen in the past few years.
"This is a mantra we've been expressing for about two years now, but there seem to be workers coming through the cracks," he added.
Unemployment rates in all of the state's major metropolitan markets dropped from August 2017 to August 2018, in many cases from what had been historical lows before that, the report said.
The drop in unemployment coincided with a jump of 2.1% in the number of jobs in San Francisco over the same period, outpacing the East Bay at 1.8%, but significantly lower than the 3.8% rise in the South Bay, according to the Beacon Economics report.
Administrative support jobs in San Francisco experienced the most growth in any sector at 5.8%, adding 3,700 to payrolls from August 2017 to August 2018. The professional, scientific and technical services sector saw the largest gain in actual number of jobs, expanding by 5,700, or 3.1%, during that period.
Kleinhenz theorized today that San Francisco's high housing and commercial space costs may have helped drive out some smaller businesses in those sectors.
In the South Bay, strong growth in the labor market reflects gains in the information and education and health services sectors. The construction sector -- mostly is poised to post sizable numbers into the near future, given an explosion of nonresidential building activity.
The manufacturing sector had significant growth from August 2017 to August 2018, adding 7,800 jobs during that time, a 4.7% jump, Beacon Economics reported.
Thanks to large employment increases in logistics, manufacturing and technical industries, the East Bay's unemployment rate is the lowest, and number of jobs highest, than either has been in decades, the report says. It doesn't look as if the growth in the East Bay will end anytime soon, according to the report.
Between August 2017 and August 2018, the transportation and warehousing sector added 3,800 jobs, growing by 11.1%. The professional, scientific and technical services sector gained 3,900 jobs, the most among any sector.
The East Bay's wholesale trade sector lost 1,000 jobs during that same 12 months, the report said.