Tuesday, February 22, 2005

Solano at front of pack - County is in position for boom, study finds

Article Published: Tuesday, February 22, 2005

Solano at front of pack

County is in position for boom, study finds

By RACHEL RASKIN-ZRIHEN, Times-Herald staff writer

Solano County is better positioned to take off economically than most of the region, according to the second independent study in two weeks to make the claim.

The new study shows Solano County suffered less and recovered faster from the nation's recession earlier this decade than much of the rest of the area. The report, released by Sonoma State University's Center for Regional Economic Analysis, mirrors the findings of an Association of Bay Area Government economic forecast last week.

Solano County is on an upward economic trend, the new study shows.

A variety of current and predicted economic trends "show Solano County on the upswing, that the economy is moving toward a boom," center director Robert Eyler said.

Like ABAG's analysts, Eyler said Solano County's diverse economic base and its less expensive real estate likely explain how it escaped the worst of 2001's economic downturn. The recession hit hardest areas like Silicon Valley that rely heavily on high-tech industries.

But even Solano County's economy has slowed in the past five months, Eyler said.

"Employment grew faster in the beginning of 2004 than at the end of it. It's still positive, but slowing," Eyler said. "Solano County is still moving a little faster than other counties, and the forecast for Solano County is probably the best of all the counties I study."

Eyler has studied Solano, Marin, Napa, Mendocino and Lake counties' economies for the past three years, though this is the first time he's published the results, he said.

Eyler analyzes economic indicators including notices of default and bankruptcies, residential building permits, help-wanted ads, initial unemployment insurance claims, an agricultural price index and the U.S. Leading Economic Indicator. He also compiles local data on non-farm employment levels, county taxable sales and county personal income levels.

Solano County can become the standout North Bay county, if it plays its cards right, Eyler said.

"I think people don't recognize the potential of Solano County, which is starting to show its face. Solano and Sonoma counties have the most balanced economic bases in the area, though the others are catching up. It's a survival issue," Eyler said. "You have to look at these counties like countries. They don't want to export their incomes into other counties.

"Marin, for instance, gets a lot of its employees from Solano because of its cost of living, which means it's exporting a lot of its income dollars to Solano County, which benefits retail-wise, and they pay property taxes in Solano."

County economies not only compete, they also depend on each other in what Eyler calls "an interesting symbiotic relationship."

"Solano County is growing steadily and didn't experience a huge downturn during the recession," Eyler said. "Compared to other counties I study, it's seen continued growth, while others were hit a little harder in 2001 and 2002.

"In general, Solano County is one of the more dynamic local economies, for sure," he said. "People mistake Solano County for places like Lake and Mendocino counties - places you drive through to someplace else - but it's bordered by many other dynamic local economies and is poised to be a hub if it grows the right way. The seeds are there."

Eyler said if Solano County can attract a major player in some high-tech industry like communications or bio-technology, it can "develop around it."

"The challenge," Eyler said, "is to develop an economic profile of what the county is and what it wants to be, develop a plan, and act on that."

- E-mail Rachel Raskin-Zrihen at RachelZ@thnewsnet.com or call 553-6824.

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