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| State Profile
California - Sample
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| The Big Picture |
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Economic growth slowed by weakened housing market; consumer spending and CA budget deficit monitored as indicators of state''s potential slip into recession.
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 | State employment grows 2% in January 2007 from year-ago. Greatest gains in industrial machinery, pharmaceuticals, clothing stores; largest losses in furniture and paper manufacturing. |
| Unemployment highest in El Centro at 14.9% in January 2007; lowest in San Diego, San Francisco, San Luis Obispo, and Santa Rosa at 4.3%. US average 4.5%. |
| Personal income $1.4 trillion in Q3 2006, up 6% from year-ago. |
| CA tax revenue grows 3.8% to $26.5 billion in Q3 2006 from previous year. |
| Exports rise 9.7% to $93.3 billion in 2006 from year-ago; represent 11.4% of US total. |
| Venture capital investment in CA rises 12.7% to $2.9 billion in Q4 2006 from year-ago. |
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| Employment Data |
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Minimum wage of $8.00 well exceeds $5.15 national rate.
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California Unemployment and Job Growth Rates
January 2007
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Unemployment Rate |
Job Growth Rate |
| US Average |
4.5% |
1.7% |
| Bakersfield |
8.6% |
3.1% |
| Chico |
7.1% |
2.9% |
| El Centro |
14.9% |
2.5% |
| Fresno |
9.2% |
2.4% |
| Hanford |
10.2% |
3.0% |
| Los Angeles |
4.6% |
1.5% |
| Madera |
7.9% |
6.2% |
| Merced |
11.3% |
5.5% |
| Modesto |
9.0% |
0.8% |
| Napa |
4.5% |
4.4% |
| Oxnard |
4.8% |
1.8% |
| Redding |
8.1% |
2.5% |
| Riverside |
5.2% |
2.7% |
| Sacramento |
5.3% |
1.7% |
| Salinas |
10.8% |
1.6% |
| San Diego |
4.3% |
1.0% |
| San Francisco |
4.3% |
2.4% |
| San Jose |
4.7% |
2.9% |
| San Luis Obispo |
4.3% |
2.2% |
| Santa Barbara |
4.8% |
1.0% |
| Santa Cruz |
7.5% |
4.0% |
| Santa Rosa |
4.3% |
3.5% |
| Stockton |
8.5% |
2.1% |
| Vallejo |
5.1% |
2.0% |
| Visalia |
9.9% |
4.5% |
| Yuba City |
10.3% |
3.8% |
Source: Bureau of Labor Statistics
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California Unemployment Rate vs. National Average
Source: Bureau of Labor Statistics
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California Job Growth Rates vs. National Average
Source: Bureau of Labor Statistics
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California Industry Growth Rates
January 2007
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Job Growth
Jan 06 to Jan 07 |
| All Employment |
2.0% |
| Construction |
0.6% |
| Manufacturing |
0.0% |
| Metal Products |
1.6% |
| Industrial Machinery |
5.4% |
| Computers & Electronics |
0.3% |
| Communications Equip. |
0.4% |
| Semiconductors |
2.5% |
| Avionics |
-1.3% |
| Aerospace Products |
-1.4% |
| Furniture |
-5.8% |
| Food Products |
0.0% |
| Apparel |
-0.7% |
| Paper Products |
-2.9% |
| Printing |
0.0% |
| Pharmaceuticals |
7.2% |
| Plastics Products |
-0.9% |
| Wholesale Trade |
3.1% |
| Retail Trade |
1.2% |
| Cars & Auto Parts |
0.3% |
| Building Materials |
0.1% |
| Food Stores |
2.9% |
| Clothing Stores |
4.3% |
| Transportation, Utilities |
2.6% |
| Telecommunications |
-1.5% |
| Finance |
0.5% |
| Banks |
-0.3% |
| Business Services |
3.5% |
| Healthcare & Education |
3.0% |
| Hospitals |
1.9% |
| Hotels |
1.7% |
| Restaurants |
3.3% |
| Government |
1.8% |
| Local Government |
1.8% |
Source: Bureau of Labor Statistics
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| Major Industry Update |
Mining
CA mining industry includes about 871 companies with combined annual revenue of $7.3 billion. Industry employs approximately 20,000 with annual payroll of $937 million. Large mining sub-sectors: oil and gas extraction (valued at $4 billion); nonmetallic minerals ($2 billion); and support activities for industry ($1 billion). Industry contributes $10 billion to gross state product, representing 0.6% of total. Issues impacting mining industry include obtaining permits; safety, land, and pollution regulations; environmental lawsuits; fluctuations in commodity prices; and taxes on mined products. CA mining industry annual exports about $318 million. |
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| Lower Bills for Californians. Natural gas bills during January 2007 average 10% less than in previous year for CA consumers despite increased consumption; gas supplies purchased through long-term contracts lead to lower prices. | | |
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Construction & Real Estate
CA construction and real estate industries include about 103,700 companies with combined annual revenue of $188 billion. Industries employ about 1.1 million with annual payroll of $40 billion. Large sub-sectors: residential construction (valued at $36 billion); commercial ($28 billion); heavy and civil ($22 billion); and real estate services ($37 billion). Industries contribute $336 billion to gross state product, representing 21% of total. Issues impacting construction and real estate industries include material, equipment, insurance, and labor costs; land planning and acquisition; environmental regulations and building codes; worker safety; cash flow and liquidity management; property obsolescence; and interest rate changes. |
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| Existing Home Sales Down. Sales of existing homes, condos, and co-ops in CA drop 21.3% to 435,400 units in Q4 2006 from year-earlier. | | |
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Manufacturing
CA’s manufacturing industry includes about 48,500 companies with combined annual revenue of $379 billion. Industry employs about 1.6 million with annual payroll of $66 billion. Major manufacturing sub-sectors: computers and electronics (valued at $90 billion); food products ($47 billion); transportation equipment ($33 billion); chemicals and fabricated metals ($23 billion, each). Industry contributes $157 billion to gross state product, representing 10% of total. Issues impacting manufacturers include raw material, labor, and energy costs; foreign competition; labor, pollution, and foreign trade regulations; supplier and customer consolidation; capital equipment and facility expenses; quality control; and labor relations. CA leading exporter of manufactured goods: at about $115 billion annually, accounts for 12.4% of total US exports. |
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| CA Manufacturers Applaud GMAP. CA governor introduces plan to improve state's transportation infrastructure as it relates to environmental and safety issues. One result: CA's manufacturers will be able to move product more quickly and efficiently. | | |
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Wholesale & Retail
CA wholesale and retail industries include about 167,700 companies with combined annual revenue of $1 trillion. Industries employ approximately 2.3 million with annual payroll of $76 billion. Large wholesale and retail sub-sectors: motor vehicle and parts wholesalers and dealers (valued at $140 billion and $96 billion); food and beverage wholesalers and stores ($69 billion and $60 billion); professional and commercial equipment and supply wholesalers ($80 billion). Wholesale and retail industries contribute $206 billion to gross state product, representing 13% of total. Issues impacting wholesale and retail industries include transportation costs, truck driver shortages, logistics, merchandising, inventory management, store advertising and promotions, consumer and business spending, interest rates, and technology use (shipment tracking, GPS, point of sale and inventory control software, credit card processing). |
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| Hybrids Popular in CA. State has largest number of hybrid vehicle registrations in US in 2006 with 67,500 units sold, accounts for 22.3% of all hybrid sales. | | |
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Transportation & Warehousing
CA transportation and warehousing industries include about 19,000 companies with combined annual revenue of $46 billion. Industry employs approximately 397,000 with annual payroll of $13.1 billion. Largest transportation and warehousing sub-sector trucking, valued at $13.9 billion. Industry contributes $38 billion to gross state product, representing 2% of total. Issues impacting transportation and warehousing industries include fuel, equipment, and building costs; port traffic and shipment flows; heightened security and vehicle pollution regulations; driver shortages and licensing; technology for logistics, shipment tracking, and vehicle maintenance. |
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| CA Considers P3s. CA struggles with transportation crisis, considers $20 billion transportation bond, or forming public-private partnerships (P3s) for funding; state hesitates to form P3s since road ownership then in hands of private entities. | | |
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Information
CA information industry includes about 20,500 companies and employs approximately 564,000 with annual payroll of $35 billion. Large information industry sub-sectors: publishing (valued at $40 billion); broadcasting ($12 billion); Internet service providers ($12 billion); and telecommunications. Industry contributes $107 billion to gross state product, representing 7% of total. Issues impacting information industry include government regulations; industry consolidation; advertising revenue; viewership and readership; business, education, and consumer spending; technology and infrastructure shifts. |
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| Start-Ups Compete for Ad Revenue. San Mateo-based AdMob one of several companies competing for ad revenue on cell phones; AdMob acts as middleman for advertising process on this venue, has distributed 1 billion ads since January 2006. | | |
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Finance & Insurance
CA finance and insurance industry includes about 46,000 companies, employs approximately 681,600 with annual payroll of $42.6 billion. Aside from banks and credit unions, top finance and insurance sub-sectors: non-depository credit intermediation (valued at $38.3 billion); securities intermediation and related activities ($30.5 billion); and insurance agencies, brokerages, and related activities ($13.7 billion). Industries contribute $121 billion to gross state product, representing 7% of total. Issues impacting finance and insurance industry include consumer income and investing, weather-related property damage claims, negotiating reimbursement costs and payments to healthcare providers, government regulations and codes, interest rates, industry consolidation, technology use, service differentiation, and client base expansion. |
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| AMs Not Always Best Option. Number of alternative mortgages (AMs) sold in US on rise, most have adjustable rates that increase suddenly leaving homeowners unable to make payments. In CA, 40% of mortgages issued since 1998 adjustable-rate, second-highest percentage in US. | | |
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Professional Services
CA professional services industry includes about 100,300 companies with combined annual revenue of $145 billion. Industry employs approximately 1.2 million with annual payroll of $62 billion. Large professional services sub-sectors: computer system design (valued at $29 billion); legal ($26 billion); architecture and engineering ($25 billion); and accounting ($19 billion). Industry contributes $134 billion to gross state product, representing 8% of total. Issues impacting professional services industry include government regulations and codes, industry consolidation and business divestiture, corporate spending, technology use, service differentiation, client base expansion, corporate in-sourcing, and international clients servicing. |
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| First-Year Pay Creeps Up. CA's large law firms raise first-year associate pay to $160,000; concern arises over how salaries will be paid since clients unlikely to want to pay $250 per hour to have "first-years" work on their cases. | | |
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Health Care
CA healthcare industry includes about 88,200 companies with combined annual revenue of $136 billion. Industry employs approximately 1.4 million with annual payroll of $52 billion. Largest healthcare sub-sectors: ambulatory services (valued at $60 billion) and hospitals ($52 billion). Industry contributes $97 billion to gross state product, representing 6% of total. Issues impacting healthcare industry include government regulation of Medicare/Medicaid, doctor/nurse shortages, medical malpractice suits, and care for uninsured patients. Annual state healthcare expenditures around $169 billion, represent 11% of US total. About 18% of CA residents lack health insurance. |
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| CA Moves Toward Healthcare Insurance for All. Governor announces healthcare reform program that will require businesses to either offer employees health insurance coverage, or pay 4% of payroll into state fund that will cover uninsured residents. | | |
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Tourism
CA tourism industry includes about 27,300 companies with combined annual revenue of $44 billion. Industry employs about 522,000 with annual payroll of $15 billion. Large tourism sub-sectors: arts, entertainment, and recreation (valued at $26 billion); accommodations ($14 billion); and travel arrangement services ($3 billion). Tourism contributes $64 billion to gross state product, representing 4% of total. Issues impacting tourism industry include visitor numbers, hotel occupancy, international visitors’ needs, tourism advertising funds, visitor traffic and revenue fluctuations due to airline industry restructuring, real estate prices to buy hotels and land; and collaboration with universities to create hospitality services degrees and improve labor pool. Aside from in-state travel, CA''s largest domestic visitor markets: NV, AZ, TX, OR, NY, WA; largest foreign markets: Canada, Mexico, UK, Japan, Germany, South Korea, Australia. |
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| Los Angeles Ranks Third. Year-to-date overseas non-resident arrivals in Los Angeles total 2 million as of November 2006, down 4% from previous year; total third-largest of all US cities, according to Summary of International Travel from US Dept. of Commerce. | | |
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Agriculture
CA agriculture industry includes 76,500 farms with combined annual revenue of $26 billion, and average per farm size of 345 acres. Vast majority of farms family or individually owned. State home to one-third of nation''s acreage for vegetable farming. Major crops and farm products: fruits, nuts, and berries (valued at $8.7 billion); vegetables, melons, and potatoes ($4.8 billion); dairy products ($3.7 billion); nursery and floriculture products ($3.3 billion). Expenses average one-third of total income. Issues impacting agriculture industry: volatile market prices, equipment costs, animal and plant diseases and pests, droughts and water restrictions, and changes in government regulation and aid. Leader in agricultural product exports, valued around $10.2 billion; almonds, wine, and cotton largest agriculture exports. |
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| Grape Prices Mixed. CA grape prices rise average of 3% in 2006 from year earlier; table grapes up 13%; raisin grapes down 6%; white wine grapes up 1%; red wine grapes unchanged. | | |
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| Local Real Estate Summary |
New housing permits fall 28.6% in CA in Q4 2006 from year-ago. US average down 26%.
California New Housing Permits
Source: US Bureau of Census
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Commercial vacancy rate in Los Angeles 9.4% in Q4 2006; Orange County 7.4%; Sacramento 15%; San Francisco 12.9%.
California Commercial Real Estate Vacancy Rate
Data provided by Grubb & Ellis. To purchase a complete report, please visit http://www.grubb-ellis.com.
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Home prices rise 10% in Los Angeles and 2% in San Francisco; fell 2% in Sacramento metro areas in Q4 2006 from year-ago. US average rises 6%.
California Annual Home Price Changes
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2006 |
Q3 06 |
Q4 06 |
| US Average |
9% |
8% |
6% |
| Bakersfield, CA |
19% |
15% |
9% |
| Chico, CA |
9% |
7% |
2% |
| El Centro, CA |
17% |
12% |
9% |
| Fresno, CA |
15% |
12% |
6% |
| Hanford-Corcoran, CA |
15% |
12% |
7% |
| Los Angeles-Long Beach-Glendale, CA (MSAD) |
17% |
16% |
10% |
| Madera, CA |
17% |
15% |
9% |
| Merced, CA |
14% |
11% |
2% |
| Modesto, CA |
12% |
7% |
1% |
| Napa, CA |
7% |
5% |
0% |
| Oakland-Fremont-Hayward, CA (MSAD) |
10% |
6% |
2% |
| Oxnard-Thousand Oaks-Ventura, CA |
11% |
9% |
3% |
| Redding, CA |
12% |
9% |
4% |
| Riverside-San Bernardino-Ontario, CA |
16% |
14% |
9% |
| Sacramento-Arden-Arcade-Roseville, CA |
5% |
1% |
-2% |
| Salinas, CA |
10% |
5% |
1% |
| San Diego-Carlsbad-San Marcos, CA |
4% |
3% |
0% |
| San Francisco-San Mateo-Redwood City, CA (MSAD) |
9% |
7% |
2% |
| San Jose-Sunnyvale-Santa Clara, CA |
10% |
9% |
5% |
| San Luis Obispo-Paso Robles, CA |
6% |
3% |
-3% |
| Santa Ana-Anaheim-Irvine, CA (MSAD) |
14% |
11% |
6% |
| Santa Barbara-Santa Maria-Goleta, CA |
5% |
4% |
-4% |
| Santa Cruz-Watsonville, CA |
10% |
6% |
1% |
| Santa Rosa-Petaluma, CA |
6% |
3% |
-2% |
| Stockton, CA |
11% |
8% |
1% |
| Vallejo-Fairfield, CA |
6% |
9% |
15% |
| Visalia-Porterville, CA |
18% |
15% |
7% |
| Yuba City, CA |
8% |
5% |
-2% |
Source: OFHEO
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