September 22, 2005
Study: Vallejo Area to Lead Region's Economic Growth
By RACHEL RASKIN-ZRIHEN, Times-Herald staff writer
The Vallejo area's income and employment growth will outpace the rest of the region's in the next few years, according to a new study.
The University of the Pacific's Eberhardt School of Business' latest study predicts California's gross state product will exceed $1.9 trillion by 2008, with Vallejo leading the region in income and employment growth, according to the university's quarterly state and regional forecast.
"Vallejo's tearing it up," said Dr. Sean Snaith, the center's director.
The study's results further confirm what other recent economic and employment studies have shown.
Snaith said location partly explains it.
"The housing sector kind-of spearheaded this change, but other things are starting to kick in," he said.
Leisure and hospitality join health, education, professional, and business services as Solano County's three main economic drivers Snaith said.
"We forecast in 11 metro areas, and we predict the Vallejo area will be No. 1 in income growth, which goes hand-in-hand with economic growth," 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.
The report listed several significant events impacting the local economy. Among them:
- The August opening of Highway 37 through Vallejo - becoming the only east-west connector between Sonoma, Napa, Marin and Solano counties. It also improved access to Mare Island, widened a large portion of the highway and created an overpass over Highway 29.
- The Fairfield Redevelopment Agency plans to buy and tear down 14 fourplexes and develop a single affordable-housing project.
- The first phase of Vacaville's new Nut Tree Village development started in August.
- Of all California metro areas, only Solano County recorded an increase, albeit a slight one, in housing affordability in the second quarter of 2005. The trend is not expected to last.
- Developers and Suisun City officials are preparing to apply to annex property adjacent to Suisun as the site of a new Wal-Mart Supercenter.
- Marine World officials expect revenues to jump about $5 million this season over last. Vallejo's share of the expected $59 million for this year may hit $2.4 million.
- E-mail Rachel Raskin-Zrihen at RachelZ@thnewsnet.com or call 553-6824.
Wednesday, October 12, 2005
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