Friday, September 23, 2005

Solano County to lead Bay region's growth

Article Last Updated: 9/22/2005 06:40 AM

Solano to lead Bay region's growth

By Rachel Raskin-Zrihen/Times-Herald, Vallejo

Vacaville and the area including Fairfield, Napa and Vallejo, is forecast to outpace other parts of the Bay region in employment and income during the next few years, according to a new study.
The report, issued by University of the Pacific's Eberhardt School of Business, also predicts that California's Gross State Product will exceed $1.9 trillion by 2008.

Dr. Sean Snaith, the school's director, said location partly explains it.

"The housing sector kind-of spearheaded this change, but other things are starting to kick in," he said.

Among them, the first phase of Vacaville's Nut Tree Village development has begun. In Fairfield, the city's redevelopment agency is moving ahead on an affordable housing project. In Vallejo, Marine World officials expect a $5 million revenue increase this season over last.

Leisure and hospitality join health, education, and professional and business services as Solano County's three main economic drivers Snaith said.

"All that housing construction that's been going on in the region has attracted new households which require a wide variety of goods and services."

The companies that set up shop to meet those needs, in turn, also need support services, Snaith said. It all seems to bode well for the area's economic future.

"It's good news," Vallejo Chamber of Commerce head Rick Wells said. "The more the numbers grow for us, the better the signs for our economy."

All is not rosy, however.

Snaith said the devastation wrought by Hurricane Katrina forced his staff to redo the national model for their study, taking 6 percent off the expected growth rate for the fourth quarter. He also said rising energy prices will likely put a damper on the upcoming holiday season for retailers. The Vallejo area will be impacted, but only temporarily, he said.

"Hurricane Katrina and the associated spike in energy prices will cause a fourth-quarter slowdown both nationally and in California," Snaith said. "Something's got to give, and consumers will be less inclined to spend for the holidays. Retailers will have to get more aggressive with their prices to attract consumers."

But Snaith said the negative impact of the storm and its aftermath will be transitory, and may, in the long run, provide an unprecedented opportunity for jobs in the rebuilding and upgrading of the devastated region's housing and infrastructure.

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