Tuesday, October 17, 2006

Economic Forecast: Housing Dip Won't Affect Vallejo Economy

Economic Forecast: Housing Dip Won't Affect Vallejo Economy
By RACHEL RASKIN-ZRIHEN, Times-Herald staff writer
Vallejo Times Herald

The Vallejo area economy will not be brought down by the housing slowdown, but will continue growing at a fairly strong clip, according to a recently released economic forecast.

The University of the Pacific's California & Metro Forecast for 2006 through 2008 suggests the Vallejo-Fairfield area will benefit from the strength of the East Bay's economy, said the university's Business Forecasting Center's Sean Snaith.

"The East Bay's economy is very strong and some of the spill-over of that is helping mitigate the housing slowdown in areas like Vallejo," Snaith said.

Also, the Solano County area building boom of the past several years continues to bear fruit, he added.

"The flurry of building may be over for now, but people moved into those homes over the past few years, and they continue to need goods and services," Snaith said.

The forecast shows personal income in the Vallejo-Fairfield region finished 2005 growing at a rate of 6.1 percent. It is expected to slow to an average of 5.9 percent and continue growing through 2008.

The area has also enjoyed steady job growth since 1998, and at 1.7 percent annually through 2008, is expected to post an average job growth rate slightly higher than the state's 1.3 percent.

The largest job growth areas are expected to be the professional and business, and the education and health sectors. Job losses are expected in the federal government and construction sectors.

As more jobs come to the region, the population is also expected to grow at an average of 0.6 percent annually through 2008, the study shows.

The forecast also shows that job growth outpaced the labor force for the past five years, though the majority of the jobs were entry-level trade and transportation positions. The study suggests salaries may rise as promising industries like biotechnology and tourism expand in the area.

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

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