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City once known for oil and agriculture continuing to diversify
| Wednesday, Jun 6 2007 10:05 PM
Last Updated: Wednesday, Jun 6 2007 11:30 PM
Bakersfield's economy continues to grow at one of the fastest rates in the nation, according to a recent report. Bakersfield ranked 11th among midsize cities and 47th among the nation's 393 largest metropolitan areas in Inc. Magazine's April list of the hottest cities for business. No California metro area ranked higher on the list of midsize cities, and only two outranked Bakersfield on the list of large areas.
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Brimhall Square in northwest Bakersfield was busy during lunch on Wednesday. This group got lunch at a sandwich shop and then went to a park to eat.
Roofers work on an office/retail complex as traffic bustles by on Calloway and Brimhall in northwest Bakersfield Wednesday.
The ratings were based on job growth between 1995 and September 2006, with more weight given to data from the most recent two years.
While the ranking is no indication of economic strength, it does point to how quickly Bakersfield's economy is expanding in comparison with other cities of similar size. It also suggests that the area's economy -- once largely dependent on agriculture and oil -- has continued to diversify as its population grows.
"We're not in explosive growth right now, but it is just a matter of time," said Richard Chapman, president and CEO of the Kern Economic Development Corp., a local nonprofit dedicated to growing existing businesses and recruiting new companies.
The Bakersfield area has grown nonfarm jobs at a 2.7 percent rate in the last year, the magazine reported, and at a 13.4 percent clip over the last five years. By comparison, Inc.'s top-rated midsize metro area, Cape Coral-Fort Myers, Fla., grew nonfarm jobs by 4.6 percent in the last year, and by 32.3 percent over the last five years.
"Bakersfield is doing reasonably well," said Inc. contributing writer and editor Joel Kotkin, who helped put together the rankings. "It is continuing to get job growth and population growth coming from Los Angeles."
The area is also holding relatively steady in its classification. In the magazine's 2006 rankings, Bakersfield ranked 10th among midsize cities and 41st overall.
'First the rooftops'
One of the reasons for the job growth is the area's rapidly expanding population, which has created a need for more businesses such as doctor's offices, banks, schools and restaurants.
"Retail is the next step in our growth," Chapman said. "First the rooftops come, then retail, industrial and commercial follow."
Anthony Olivieri, a commercial real estate broker with Bakersfield-based Olivieri Commercial Group, said the local market for new retail is "seeing a lot of activity" with projects that have been planned for years being built and future developments on the drawing board.
"We're still seeing strong activity of people wanted to start new businesses or expand," Olivieri said. "That leads to more jobs."
Local job creation has been closely tied to population growth, which is expected to continue to be robust.
Kern was the state's third-fastest growing county in 2006, increasing by 2.8 percent, or 22,158 residents, to top the 800,000 population mark, according to recent data from the California Department of Finance.
Bakersfield's population was 323,213 as of January, up 3.6 percent from a year before. Metropolitan Bakersfield's population of more than 450,000 has been projected to reach 1 million as early as 2042.
Of the 10,600 jobs created in Kern County in the last year, 3,000 were in the government sector, 1,700 were in professional and business services and 1,200 in trade, transportation and utilities, according to the state Economic Development Department.
Real estate's effect
But the downturn in the residential real estate market could dampen the economy's growth.
The county lost 200 construction jobs between March and April. But the county has still gained 700 construction jobs since April 2006, and an uptick in commercial building may offset some of the sting of less residential building.
Chapman said he is not overly concerned with how the downturn in the residential real estate market will affect the local economy because there is so much more room for commercial growth.
"We have places to live," Chapman said. "Now we need places to work."
Olivieri said that while demand for retail is strong, he can't predict how long that will last.
"The question is, how long is this sustainable since the housing market has slowed down?" Olivieri asked. "Right now we're not seeing a slowdown."
Bakersfield's lack of available speculative commercial leasing space could also slow the growth, Chapman warned. He also said that the area's generally low worker education level is a cause for concern.
National attention
Other studies have highlighted Bakersfield's fast economic growth as well.
A recent Forbes.com listing of best cities ranked Bakersfield's income growth 11th in the nation and the city's job growth 12th in the nation. But less healthy unemployment and household income statistics contributed to Bakersfield ranking 54th overall in Forbes.com's listing of the nation's top 100 job markets.
The Bakersfield metropolitan area, which comprises all of Kern County, jumped 60 spots to rank 30th among the 200 largest metropolitan areas in a 2006 listing of best-performing cities by the Milken Institute, a Santa Monica-based economic think tank.
Inc. magazine’s best midsize cities for doing business, 2007
1. Cape Coral-Fort Myers, Fla.
2. McAllen-Edinburg-Mission, Texas
3. Sarasota-Bradenton-Venice, Fla.
4. Fayetteville-Springdale-Rogers, Ark.
5. Deltona-Daytona Beach-Ormond Beach, Fla.
6. Lakeland, Fla.
7. Provo-Orem, Utah
8. Reno-Sparks, Nev.
9. Boise-Nampa, Idaho
10. Savannah, Ga.
11. Bakersfield