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Welcome
Northern Central Coast
Economic Vitality Conversation
September 10, 2004
Santa Cruz County
Business Council
Central Coast
Partnership
San Benito County
Business Council
Made possible through generous support from
Pacific Gas and Electric Company
The Northern Central Coast (NCC)
An Economic
Perspective
NCC: Diversity in a Small Area
The three contiguous counties are part of
two economic planning regions, and
depend upon activities that range from
rural agriculture to high technology
manufacturing and services.
ESP Regions
Economic Influences on the NCC

The National (and Global) Economy
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The State Economy
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Central Coast Region (& San Francisco Bay
Region) Trends
National Economic Conditions
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Modest output growth (2.8 % real GDP in 2004:2)
Productivity gains (2.5% in 2004:2)
Excess capacity (only 77% vs. 83%+ in 1990s)
Weak job growth (slowest since Depression)
Rising unit labor costs (benefit cost hikes)
Higher oil prices (less acute, but more chronic?)
High debt levels, and rising interest rates
California
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A slow recovery, matching the nation
CA-U.S. unemployment rate gap shrinking
Job losses during 2001-2003 concentrated in Bay
Area manufacturing
Funding constraints will limit government job
growth and any fiscal stimulus
Population growth (tax receivers vs. taxpayers)
California offers employers a large market, but a
relatively high cost of business
California Nonagricultural Jobs
14,800,000
14,700,000
14,600,000
14,500,000
14,400,000
14,300,000
14,200,000
J
-0
an
1
1
2
3
4
1
2
3
-0 l-01 t -0 -02 r-0 l-02 t -0 -03 r-0 l-03 t -0 -04 r-0 l-04
r
Ju Oc Jan Ap
Ju Oc Jan Ap
Ju Oc Jan Ap
Ju
Ap
Where is the job recovery ?
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Lost to productivity gains (capital substitution)
Lost to cost and price pressures on businesses
Offsetting rising labor costs (health & benefits)
Going offshore
Waiting for employer confidence to return
Moved out of California
Regional Trends
Job Growth by Region
Growth in Total Jobs 1990-2003
SoCal
8.2%
11.2%
Bay Area
California
14.6%
N. California
15.2%
16.4%
U.S.
20.5%
Coast
24.9%
Valley
N. Sacramento
25.0%
Border
25.2%
28.7%
Sierra
Sacramento
0%
31.6%
5%
10%
15%
20%
(Percent Change)
25%
30%
35%
Jobs During Business Cycles
Growth in Total Jobs
25%
20%
(Percent Change)
20.5%
18.7%
16.4%
14.7%
17.4%
13.1%
15%
10%
4.2%
5%
1.5%
0.0%
0%
-5%
-0.2%
-2.1%
1990-1994
1994-2000
Central Coast
-1.2%
2000-2003
California
U.S.
1990-2003
C.C. Job Growth by Industry
Job Growth in Leading Major Industries 1990-2002
Manufacturing
-5.1
2.1
Other Svcs.
Wholesale Trade
2.4
Professional & Technical Svcs.
4.3
6.0
Administrative & Waste Svcs.
Retail Trade
8.2
9.1
11.5
Accommodation & Food Svcs.
Health Care & Social Assistance
12.2
Ag., Forestry, Fishing & Hunting
17.1
All Government
-10
-5
0
5
(Thousands)
10
15
20
Over-Represented Industries
(Percent of Total Jobs in 2002)
Above-Average Share in CC
25%
19.9%
20%
16.5%
15%
12.3%
10.6%
10%
5%
11.3% 10.7%
7.8%
2.6%
0.6%0.4%
0%
Ag., Forestry, All Government Accommodation
Fishing &
& Food Svcs.
Hunting
CC
California
Retail Trade
Utilities
(Percent of Total Jobs in 2002)
Under-Represented Industries
Below-Average Share in CC
12%
11.0%
10%
8%
6%
4.4%
3.4%
4%
2%
6.4%
6.1%
1.8%
4.1%
6.7%
4.2%
2.7%
0%
Information
Wholesale
Trade
Professional & Administrative
Technical
& Waste Svcs.
Svcs.
CC
California
Manufacturing
Income Growth by Region
Per Capita Income 1990-2001
72.9%
Bay Area
Border
56.9%
55.4%
U.S.
Sacramento
48.8%
California
48.2%
46.0%
Central Coast
44.2%
No. California
42.8%
No. Sac. Valley
Central Sierra
39.5%
SoCal
37.6%
Cal CPI
34.6%
30.2%
Valley
0%
15%
30%
45%
(Percent Change)
60%
75%
90%
NCC Unemployment Rates
Counties are near or above the state rate.
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California, 6.5% (July 04)
Monterey, 7.4%
San Benito, 8.3%
Santa Cruz, 6.3%
…However, wide variances among local areas.
Unemployment Among Regions
Change in Unemployment Rate 2000-2003
Central Sierra
0.7%
Central Coast
0.9%
No. California
0.9%
Border
1.0%
Valley
1.0%
1.1%
1.3%
No. Sac. Valley
SoCal
1.4%
Sacramento
1.8%
California
2.0%
U.S.
Bay Area
4.1%
0%
1%
2%
3%
4%
5%
Monterey County
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Large amounts of seasonal activities, such as
agriculture, tourism, fishing.
World-famous tourism destination, 100 mi. of coastline
3rd highest agricultural producer in CA
Low unemployment in Monterey and coast
(4-7%); high rates at inland areas (15-20%).
Historical dependence on military. Former Fort Ord
base now being developed.
Home of Monterey Bay Aquarium and Research
Institute
San Benito County
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Historically, an agricultural county.
Government is the largest employer.
Two-thirds of population in Hollister
Per capita personal income 2/3 of state average.
Persons per square mile about 40 (vs. 220 for CA)
Growth is increasingly tied to employment in Santa
Cruz, Monterey, and Santa Clara.
Residential development providing economic stimulus.
Santa Cruz County
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2nd smallest California county, after SF.
Proximity to Silicon Valley.
Moderate unemployment near Santa Cruz and Scotts
Valley (5-7%); higher south (Watsonville, 15-20%).
Per capita personal income 115% of CA average.
Revenues and seasonal unemployment due to
agriculture, recreation, and tourism.
Government is the largest employer.
Economic Vitality Conversation
Today’s Focus
1.
What state actions will have the most immediate
positive impact on California’s economic recovery?
2.
What state actions will result in the most
significant long-term improvement to California’s
economic competitiveness and comparative
advantage?
3.
How do we best structure an effective partnership
between the regions and the state around
economic strategy?