bizSanDiego the business of san diego county

Shopping the Local Employment Market posted on Wednesday, 30 July 2008

Just where are all those jobs and who is filling them? That is a question many job seekers are asking around San Diego these days.

By Dave Thomas

The June unemployment rate in San Diego County was 5.9 percent (up from 4.6 percent in June of 2007), its highest point in almost five years. Construction and financial jobs took the biggest hits, while leisure and hospitality gained jobs.

Alan Gin, associate professor of economics at the University of San Diego, said the reasoning behind this is very clear. "Almost all of the damage is due to the problems in real estate," Gin said. "Employment in construction is down 8,500, employment in lending is down 2,400, and employment in real estate (agents, brokers, escrow people, leasing, etc.) is down 2,700. The rest of the economy outside real estate seems to be holding its own. Manufacturing is flat compared to a year ago, while jobs continue to be added in leisure and hospitality (+3,700), professional, scientific and technical services (legal services, architects, engineers, research and development, +2,500), education (+1,600), health care (+1,400), and government (+1,300)."

Gin noted that one problem area is retail trade, where employment is off 1,800 jobs.

"Again, there is a real estate connection, with home improvement stores down 1,000, furniture and appliance stores down 300, and car dealers down 1,100," Gin commented. "In addition to problems with higher gas prices, the latter is impacted by the downturn in house prices because a lot of people used home equity loans to purchase cars."

According to Gin, one last worrisome statistic - The job category "Employment Services" is down 2,000 jobs. "This represents a downturn in temporary employees, and is a problem because you usually see temporary employees laid off first before permanent employees," Gin said. "The downturn in temporary employees could foreshadow continuing job losses in the future for permanent employees."

Seth Stein, executive vice president of General Services, a family of five staffing companies at The Eastridge Group of Staffing Companies, says his company is seeing pockets of opportunity in several key sectors in San Diego.

They include:

Technology - AeA (formerly American Electronics Association), the nation’s largest technology trade association representing all segments of the high-tech industry, recently released Cybercities 2008: An Overview of the High-Technology Industry in the Nation's Top 60 Cities. This detailed report tracks trends in high-tech employment, wages, establishments, payroll, employment concentration, and wage differential at the metropolitan level. The largest tech sector in San Diego is research and development (R&D) and testing labs, which had 27,000 jobs in 2006—the sixth largest in the nation for this sector. The second largest tech sector in San Diego was telecommunications services, which had 15,800 employees in 2006.

Medical devices - Historically stronger than other segments, and is holding steady despite economic decline. The medical device industry as a whole has tremendous staying power--regardless of what economic trends occur, people still need the products and services offered by San Diego’s biotech companies. According to BIOCOM, Southern California's life science community has more than 800 companies producing life-saving technologies and products to improve quality of life for patients.

Education - Given the impacts to the job market, many people are choosing to explore an entirely new career path, which often means going back to school or seeking specialized training. This trend means that education will continue to be a sector that holds steady or may even grow. A recent news release from EDD supports this idea, citing educational and health services reflecting gains of 3.5 percent in wage and salary employment.

Leisure and Hospitality - Another sector that contributes significant dollars and jobs to the San Diego market. San Diego is among the most popular destinations for drive markets as far north as San Francisco and east into Nevada and Arizona. Not to mention that San Diego consistently maintains healthy convention and special events business. The largest rise in employment in the last year came with the addition of 3,700 tourism-related jobs, and we are feeling the positive impacts of this increase. Recent examples of this holding true and representing both jobs for our community and positive economic impact include BIO 2008 International Convention, the U.S. Open 2008 and Comic-Con 2008.

On the down side, Stein said real estate and construction are obviously the most significantly impacted industries. Sweeping impacts touch all segments of financial services ranging from college and home loans as well as commercial and retail investors.

Stein noted that while as a whole, the local population has grown by 1.5 percent, according to the California Department of Finance, the heavily affected job sectors such as construction has experienced definite trends that indicate workers are migrating from the San Diego market to areas like Nevada, Arizona and Texas.

"In terms of workers moving to San Diego, this is not as common as in more promising economic conditions, but does remain at the mid-level, senior management and executive level," Stein said. "The need for innovation workers is high and San Diego will always be a hub for that. According to CONNECT, 367 new companies were formed in San Diego in 2007, fueling the demand for high-tech workers."

“If you are considering moving to the area, target your job search on sectors that remain stable or anticipate growth: technology, medical, education, leisure/hospitality and government sectors,” Stein added. “Networking and getting involved in community organizations is a great way to begin a search for new opportunities as well."

A shaky job market also impacts the decision of buying a property versus renting.

Raye Scott of Scott - Finn and Associates, said there has been a noticeable increase in the number of people locally deciding to rent.

"I don't see this (renting) happening so much because of the job market, it is related to the lack of confidence in the value of real estate and the belief, fueled by the media that prices will continue to fall," Scott said. "No one wants to be the last one to buy before the bottom is reached. 'I want to wait 6 months' are the most common words that realtors hear these days," Scott added.

Scott notes that while there are probably less job opportunities due to the real estate market, conversely, that makes San Diego real estate more affordable to more people.

"Since this downturn is widespread, not localized, moving isn't going to solve the problem," Scott said. "The mortgage mess will follow buyers wherever they go and that remains one of the biggest obstacles in purchasing a home right now."

To explore jobs in San Diego, check out the bizSanDiego Job Board.

Posted by Dave Thomas