Slow to moderate economic growth forecast
for Bay Area
By Caitilin McAdoo, Bay City News Service
January 26, 2007
The Bay Area is expected to show slow to moderate economic growth
in 2007 and 2008 even while the rest of the state's growth is
projected to continue to decline, the Association of Bay Area
Governments' Director of Research Paul Fassinger said Thursday.
The number of jobs in the Bay Area rose 1.6 percent in 2006,
partly due to Santa Clara County's higher-than-expected growth,
ABAG reported during an annual regional economic outlook conference.
Santa Clara County was hit the hardest in the region by the recession
in 2001 and has been the slowest to recover, Fassinger said. In
2006, however, Santa Clara County alone added more than 17,000
jobs. The Bay Area as a whole, including Santa Clara County, gained
54,100 jobs in 2006.
The region is expected to gain an additional 47,000 jobs in 2007
and then another 47,000 in 2008, Fassinger said. That projected
growth is expected to be picking up toward the end of this year
mainly in the East Bay, San Francisco and the Peninsula.
Industries making the most gains in the region include some high-tech
industries and most service industries, such as hotels, retail
stores, education, health services and finance, Fassinger said.
Because of lower unemployment rates, businesses could start to
feel pressure to raise salaries, Fassinger said. However, incomes
are only projected to rise 1 percent more than the rate of inflation.
The inflation rate is projected to be 2.4 percent for 2007 and
2.8 percent for 2008, ABAG reported.
Although the housing market has been declining, Fassinger said
that the impact on the Bay Area is not expected to be enough to
prevent moderate growth.
ABAG is a regional planning agency representing the 101 cities
and towns and nine counties in the Bay Area. The agency holds
a conference each year to forecast the regional economic outlook
for the Bay Area.
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