Local Economic Forecast Sees Sunnier Days Coming

Brighter days lie ahead for the East Bay economy.

That's the forecast in the annual economic report scheduled for release today, May 5, from the East Bay Economic Development Alliance.

The report, prepared for the Oakland-based organization by Beacon Economics of San  Rafael, says that while "we're not out of the woods yet," the forecast for the East Bay economy is encouraging.

The study says the growth in trade at the Port of Oakland and the continuing strength of the region's clean-tech companies is attracting investment and providing evidence the East Bay is on solid economic footing.

"While the recent recession hit the East Bay pretty hard and there are folks who are still struggling to get back into the work force, the indicators are all there for a solid economic rebound," said Dr. Christopher Thornberg, founding partner of Beacon Economics.

The unemployment rate in Contra Costa and Alameda counties remains around 10 percent. The economists don't expect the jobless rate to drop below 10 percent until early 2012. They also said non-farm employment in the East Bay won't rise above 1 million jobs until early 2013.

Nonetheless, they said the Port of Oakland is bolstering the East Bay's economy. The amount of California-made exports that went through the Oakland port surpassed the Port of Los Angeles in 2010 for the first time.

They said the port's proxmity to California's agricultural communities makes it convenient for farmers to ship goods overseas.

The report also states the East Bay is "developing its own niche in clean tech." It states 40 percent of all venture capital dollars that came into the East Bay last year were plowed into the industrial energy sector.

They added that biotech companies such as Amyris Biotechnologies of Emeryville are also capturing a large share of venture capital.

Karen Engel, executive director of the East Bay Economic Development Alliance, said while unemployment will remain high for another year or so, the trends look good for job growth and business expansion.

"There's tremendous potential here," she said. "It all points the way to robust growth."

Engel said both workers and small business owners should see things pick up as the investment capital fuels spending that trickles down to them.

"The fundamentals are good. The trend lines are good," Engel said.

The report also notes median home prices have stabilized over the past year. However, defaults and foreclosures are still high, so the housing market recovery will be slow.

One bright spot in the housing industry is the increase in permits to build multi-family dwellings.

The report says the East Bay was one of California's fastest growing economic regions before the recession. It predicts the region will soon be one of the state's growth market again.