FIRST QUARTER 2014 REPORT
The Sacramento Region saw an uptick in annual job growth at the end of the first quarter of 2014
The number of jobs on payrolls in the six-county Sacramento Region increased by 1.8 percent between March 2013 and 2014. Preliminary data show that during this 12-month period, the Region posted a net gain of 16,600 jobs. The core four-county Sacramento metropolitan statistical area added jobs in the past year (at a rate ranking 92nd among measured areas across the country) and the Yuba-Sutter area experienced job losses. Sacramento’s March 2014 annual job growth reflects a moderate uptick following the slump seen in the first two months of the first quarter. While the Region is now sitting above the national average, it remains below the statewide average and significantly lower than at the same point in the previous year. In fact, in March 2013, the Region posted 3.6 percent job growth (1.8 percentage points higher than the current level), which was one of the strongest rates of growth in the state and above both the statewide and national averages. The general downward trend in regional job growth over the last 12 months is a result of slowing in four of Sacramento’s five largest sectors, which tend to drive overall performance in the regional economy. Annual job growth rates in the Region’s Professional & Business Services; Leisure & Hospitality; Educational & Health Services; and Trade, Transportation, & Utilities sectors were between 1.9 and 6.7 percentage points lower in March 2014 compared to March 2013. The Professional & Business Services sector saw an uptick at the end of the first quarter, moving up to 3.7 percent annual job growth in March 2014 with notable gains in all major components including professional, scientific, and technical services as well as administrative and support services. Educational & Health Services posted 3.1 percent annual job growth in March 2014 as a result of continued expansion in health care and social assistance activities. The Leisure & Hospitality sector has seen the most dramatic drop-off last year and remained in negative territory in March 2014 with -0.2 percent annual job growth with most major components shedding jobs. Trade, Transportation, & Utilities, a sector dominated by retail trade activities, posted 1.3 percent annual job growth in March 2014 as consumers respond to sustained growth in the regional economy. On the other end of the spectrum, the Region’s largest sector, Government, has shifted from negative to positive annual job growth and moved up to a rate of 1.5 percent in March 2014 driven exclusively by state government activities. Local and federal government activities in the Region continued to experience annual job declines. The mixed annual job growth trends across Sacramento’s five largest sectors present a downside risk to regional economic performance in the short-term.
California posted 2.3 percent annual job growth in March 2014, equating to a gain of 348,200 jobs. This rate of growth was considerably higher than the national average and was the eighth-strongest among all states (many western states surpassed California including Texas, Nevada, Utah, Colorado, and Oregon). The index of leading indicators for California has been fairly volatile recently and is also showing a slight downward trend, suggesting that the state’s economic performance could be somewhat weaker in the short-term future. Annual job growth at the national level has been fairly flat for the past few years—in March 2014, annual job growth nationally was 1.6 percent, reflecting a gain of roughly 2.2. million jobs. Like in the Sacramento Region and statewide, the three neighboring benchmark regions have all seen annual job growth drop off in the past year. The SF Bay Area saw annual job growth fall to 2.9 percent in March 2014 with a gain of 87,800 jobs. Despite the downward trend, annual job growth in the SF Bay Area remained above the statewide and national averages and among the strongest in the state. With the net addition of 5,100 jobs, the Stockton market posted 2.6 percent annual job growth in March 2014. The Solano market experienced 1.7 percent annual job growth in March 2014 with a 2,100-job gain.
Annual Job Growth
Data Sources: CA Employment Development Department and U.S. Bureau of Labor Statistics
Major Sector Annual Job Gains and Losses
Data Source: CA Employment Development Department
Annual job losses were confined to three of Sacramento's major sectors
The Sacramento Region posted annual job gains in eight of its eleven major sectors between March 2013 and 2014. Two of Sacramento’s largest sectors, Professional & Business Services and Educational & Health Services, experienced the greatest gains adding a combined total of 8,500 jobs in the past 12 months. Of note, the Construction sector experienced a notable annual gain of nearly 3,000 jobs with growth in almost every segment of the sector. The combined job loss in the three sectors that declined over the past year (700) was relatively small compared to the gains created in the leading sectors. With a net annual gain of 16,600 jobs, total Nonfarm employment in the Sacramento Region moved up to 915,100, which is nearly 65,000 jobs higher than the low point from the recent recession in the winter of 2011. However, the Region is still close to 53,000 jobs below the peak from the summer of 2007.
Statewide, job losses occurred in only two sectors over the 12 months ending March 2014, Financial Activities and Manufacturing. The largest annual employment increase was seen in the state’s Professional & Business Services sector with the technical and scientific consulting services as well as employment services (job placement and temporary employment) activities driving much of the growth in this sector. Every major sector in the SF Bay Area either added jobs or held steady between March 2013 and 2014. Similar to the Sacramento Region, the leading sectors in the SF Bay Area were Professional & Business Services and Educational & Health Services. The Government sector added the most jobs in the Stockton market in the past 12 months while the Educational & Health Services; Construction; and Manufacturing sectors all lost jobs. The Solano market experienced annual job losses in only one sector, Construction. Trade, Transportation, & Utilities posted the largest annual job increase in Solano.