While the Bay Area economy remains robust, California has gotten stuck in a slowdown, according to the latest report from the closely watched UCLA Anderson Forecast. But it's not time to push the panic button.
The sluggish pace of the Golden State's recovery, caused in part by Washington's budget struggles and weak economies overseas, is temporary and doesn't signal a contraction or drastic slump, the report says.
"We began slowing down near the end of 2012, and that slowdown will last a while during 2013," said Jerry Nickelsburg, a senior economist with the Anderson Forecast. "You will be getting an upswing in jobs by the end of 2014 and into 2015."
The state's jobless rate, which was unchanged in December at 9.8 percent, is expected to average 9.6 percent in 2013, 8.4 percent in 2014 and 7.2 percent in 2015, Anderson projected.
Nickelsburg and other economists said the tech-oriented South Bay and the San Francisco-San Mateo-Marin regions will continue to enjoy robust job gains in the coming year or two. Recent gains have been strong enough to make Silicon Valley and San Francisco the two best employment markets in the entire country.
"That whole slow-recovery, sluggish-growth scenario doesn't apply in the Bay Area," said Jeffrey Michael, director of the Stockton-based Business Forecast Center at University of the Pacific.
"There is a long way to go in this tech boom and job boom in Silicon Valley," added Mark Vitner, a senior economist and managing director with San Francisco-based Wells Fargo Bank. "We are still in the early stages of this tech expansion, when you look at the demand for tablets, smartphones, social media, social gaming."
The South Bay added payroll jobs at an annual rate of 3.5 percent during 2012. That growth rate could jump to a 4 percent yearly pace during 2013, Vitner predicted.
"Job gains are occurring across a broad set of industries in the Bay Area now," Vitner said. "It's not just tech. Construction, leisure and hospitality are now stronger. Housing is getting stronger."
The Anderson Forecast predicted that nonfarm payroll growth in California will reach an annual rate of 1.4 percent in 2013, 2.1 percent in 2014 and 2.3 percent in 2015.
California's economy has reached an "inflection point," according to the UCLA researchers.
"We're moving toward a more solid recovery that will drive down the unemployment rate," Nickelsburg said. "The California economy is growing unevenly. But it continues to grow."
Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at twitter.com/george_avalos. ___