Strictly Business feature: Three thoughts on local job growth in 2010
| Thursday, Dec 10 2009 03:34 PM
Last Updated Thursday, Dec 10 2009 03:41 PM
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Mark Evans
Donna L. Kunz
Richard Chapman
Local unemployment data have been a grudging source of hope these last several months.
The state reported last month that some 9,600 Kern jobs were lost between October 2008 and October 2009. Over that same period, the county's unemployment rate rose from 9.6 percent to 14.5 percent.
For actual hope, or the next best thing, you almost have to turn to professionals who study macroeconomic trends and try to turn them into local strategies. So that's what we did.
Our question: Where will local job growth come from in 2010?
Wherever the jobs will be, there won't be as many as we need. While Kern's job retention is well above the median for the 100 largest metros, deterioration of our unemployment rate ranks near the bottom due to rapid labor force growth. That said, extension of tax breaks for first-time homebuyers and a "cash for caulkers" program should enable residential construction to continue lifting itself from the floor established in 2009. Durable goods manufacturing should expand to replenish inventories.
While the Employment Development Department's long-term forecast for Kern County is bullish with respect to information technology occupations, national surveys suggest immediate strong growth in these sectors across all regions. Health care marches on, given the demographics.
I am uncertain regarding Kern's economic drivers. Oil prices have recovered over the past year, but domestic demand is weak and Sacramento is again showing its idiocy is unbounded. Our farm sector is an "export machine" -- but we will need rain and increased water allotments.
-- Mark Evans, associate dean and economics chairman, Cal State Bakersfield
There are several types of businesses identified in Kern County that have traditionally experienced steady growth over the past 10 years. This diverse collection includes government, education, oil and gas, agriculture and related, distribution, medical, services and retail. Unfortunately, most of these industries have been severely impacted by the current economic recession and will not experience the typical growth we have enjoyed in the past. However, Kern County is braced for a faster recovery than many cities across the nation primarily due to our industry diversity.
Recent federal stimulus programs have reached Kern County, providing a positive impact in heavy construction jobs relating to roadway and other infrastructure improvement. New financing programs and federal stimulus monies have also been made available nationally and in Kern County for energy technology, with emphasis in green energy development. Kern County offers a wide opportunity for these programs and is already poised to expand projects in this area. The county and cities have also received other federal and state monies for parks, affordable housing and job training programs intended to boost local employment opportunities through construction and technology and services.
-- Donna L. Kunz, economic development director, city of Bakersfield
As we close out 2009, our economy can best be described as in a state of limbo. Over the last few months we have witnessed zero movement in the private sector economy. Furthermore, we are "upside down" about 10,000 jobs from a year ago. Fortunately, IHS Global Insight projects us to be the first metropolitan region in California, and one of seven in the United States, to return to pre-recession employment levels, albeit in the first quarter of 2011.
As a result, 2010 looks to be a year of transformation and renewal. If KEDC's recent client activity is any indication, the silver bullet for our economic future will be the increased influx of companies (such as Men's Wearhouse and Hydrogen Energy) relocating or expanding operations from the L.A. Basin.
On a macro basis, the energy and agriculture sectors will continue to provide two solid "legs of the stool" for our local economy -- about $15 billion a year -- while the health-care and logistics clusters should create additional stability and future growth. We can also take some comfort in the Milken Institute's recent ranking of the Bakersfield MSA as the "best performing metro" in the California-Arizona-Nevada region.
-- Richard Chapman, president and CEO, Kern Economic Development Corp.
