Thursday, May 26, 2005

Rosy job picture in Solano, East Bay


Posted on Thu, May. 26, 2005

Rosy job picture in Solano, East Bay

By George Avalos

Companies in the East Bay and Solano County are more eager to bring on new employees this year than their counterparts in the rest of the Bay Area, according to a survey released today.

The study by Mechanics Bank offers fresh evidence that the Bay Area economy has turned the corner after several bleak years. What's more, it appears the surge is being led by a robust economy in Alameda, Contra Costa and Solano counties.

"The East Bay is the place to be," said Steven Buster, president of Richmond-based Mechanics Bank. "It is better diversified, not totally dependent on technology as other parts of the Bay Area, and has very optimistic companies. It seems to be a very healthy environment."

About 68 percent of the employers in Solano County said they were likely to hire workers this year, compared with 55 percent in Alameda County and 54 percent in Contra Costa County. San Francisco, San Mateo, Napa, Sonoma, Santa Clara and Marin counties were less optimistic about hiring plans. The survey also found that 61 percent of Sacramento County businesses were likely to hire.

"We think that the employers in the East Bay and Solano are experiencing increased activity in their business," Buster said. "It could be partly in their DNA that they are just optimistic and entrepreneurial. But we think the main factor is more activity."

The remainder of the Bay Area still maintained some optimism about hiring plans, though. Although East Bay and Solano employers were more likely to hire than the rest of the region, hiring plans still looked hopeful in most counties. Marin County was the only area where the number of employers who were likely to hire was in the minority.

One Bay Area economist was not surprised that the East Bay and Solano appear to have stronger job markets.

"Technology hiring has really not picked up the way we would expect," Munroe said. "The East Bay and Solano County have more of a mix of old economy industries than Santa Clara County. We will continue to see structural economic differences between various parts of the Bay Area."

What's more, it could be years before hiring picks up among big tech companies.

"My analysis is that we will not see a whole lot of hiring in existing high tech companies," Munroe said. "You have increases in productivity, companies searching hard for a profit, and continued offshoring. Most of the hiring that occurs in tech companies will come in startup companies. We are a job incubating region."

The survey did contain some mixed signals:

• Every region surveyed, including Sacramento, said transportation has deteriorated. Contra Costa County has the most dire outlook about transportation, with 84 percent of the employers saying transportation is getting worse. About 72 percent of the Alameda County and 68 percent of the Solano County respondents said traffic was getting worse. The least-bleak outlook for transportation was in the Santa Clara-San Mateo region, where 61 percent said traffic had become worse.

• In only three of the 10 counties -- Alameda, Sacramento and Solano -- did most respondents say the California business climate is headed in the right direction. In six counties, fewer than half of the employers said things were headed it the right direction.

Still, bank executives believe the Bay Area economy will continue to improve.

"Our loan activity is increasing at the bank," Buster said. "These companies want more money to invest in their businesses as they expand. And we have never had a lower past-due experience in our loan portfolio than we do now."


Employers in the East Bay and Solano County were more likely than other parts of the Bay Area to hire more workers this year. This chart shows the percentage of employers surveyed that are likely or unlikely to hire people in 2005.

County Likely Unlikely*

Solano 67.7% 32.3%

Alameda 55 44.2

Contra Costa 53.5 44.7

San Francisco 52 46

Napa/Sonoma 50.3 47.7

San Mateo/Santa Clara 49.2 47.6

Marin 48.2 50

* Numbers don't always add up to 100 percent because some respondents said they were unsure.

Source: Mechanics Bank

George Avalos covers the economy, financial markets, and banks. Reach him at 925-977-8477 or


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