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Outlook for RP economy looks good

By: Katherne Minkiewicz
February 9, 2018

Early last week the Sonoma County Economic Development Board released their county economic outlook statistics with figures that paint a picture of local success as the county’s unemployment rate is at a miniscule 2.8 percent, with Rohnert Park also seeing success with a low un- employment rate and the arrival of several new businesses slated to come to town in the next few years, the economic forecast for now looks positive.

The local economy seems to be booming with the county unemployment rate reaching a seven-year overall low of 4.5 percent and with an increased GDP (Gross Domestic Product, a statistic that measures the monetary value of final goods and services produced in a certain period of time and is a way to tell how fast an economy is growing) of 3.3 percent in 2013.

Ben Stone, executive director for the board, said the statistics were compiled through several different public resources which were then presented in the board’s January 2018 newsletter.

When asked if the unemployment rate is at its all-time low/historic low Stone said, “It’s a near low.”

Jorge Villalobos, a labor market consultant, said while the rate is quite low, it is not quite at the historic low.

“The 2.8 percent unemployment rate for Sonoma County in December of 2017 is not the lowest, but it is near the record low. Going back to 1990, the lowest December rate occurred in December of 1998 with an unemployment rate of 2.7 percent,” Villalobos said.

He also noted that labor force data is not adjusted seasonally and so comparisons can only be made for the same month across different years. “There were several other months in its history that were lower, such as May 1999 at 2.3 percent, but due to different seasonal trends throughout the year, it should not be used in a direct comparison.,” Villalobos said. 

Sonoma’s neighboring counties have similarly low rates, with Marin County at 2.9 percent and Napa County at 3.2 percent, according to the Bureau of Labor Statistics. 

What’s more, 5,500 new jobs were added throughout Sonoma County in 2015 and between 2013 and 2014 500 new businesses were formed and vacancy rates for office, retail and industrial space declines.

Tourism has been one of the biggest contributing factors for the county’s success according to the Sonoma County Economic Development Board Spring 2017 local economic report. “Increasing tourists visits to California’s prime wine-growing regions have pushed up hospitality revenues in Sonoma. In fact, Sonoma enjoyed the largest increase in occupancy rates in the past two years, indicating strong demand for travel to Sonoma.”

While wineries remain the main draw for tourism, breweries and craft distilleries are increasing in tourist popularity.

Also an increase in use of health services has created more jobs for the county. As the baby boomer generation continues to age closer to their senior years, the healthcare industry will continue to see higher demands. This will “...Propel job gains in Sonoma’s second largest industry… The education and health services sector logged employment gains of 2.7 percent” last March, according to the report and this figure is expected to grow.

However, it’s not only the county that’s seeing success, Rohnert Park has too shared in economic success in regards to unemployment and the job market. RP has a recorded unemployment rate of 3.3 percent, a 0.5 percent difference.

“The city does not capture that data (unemployment rates) but our unemployment has been low,” says Don Schwartz, assistant city manager for RP.

However, the city also has several new businesses that are slated to come to town including new non-chain restaurants, tech companies and hotels.

“Cambria Hotel (a high quality line of hotels) is breaking ground later this year near the Ashley’s and Costco. KG Technologies (a manufacturing company for the global energy market) has moved from Cotati to Rohnert Park on State Farm Drive as well as Sonoma County Distillery at Commerce and State Farm. We also have microbreweries who are interested in coming here,” Schwartz said.

Laulima’s development of the future downtown, Rohnert Station, which is expected to be centered around the SMART train station and provide a walkable downtown, is also expected to bring in more businesses and thus jobs, Schwartz says.

“We have a pretty significant effort to bring in more retail, restaurants and more shopping,” he said.

However, a growing economy also comes with growing pains. Since the unemployment rate is so significantly low, the job market is now tighter with less workers available.

“Although the Sonoma County economy is thriving, job growth has slowed over the past year due to an increasingly tight labor market. The jobless rate is approaching a two-decade low and the pool of idle workers has thinned… If unchecked, the shortage of workers aged approximately 25 to 54 will restrain labor force and productivity increases: On average, this cohort is more likely to start a business and to migrate in search of better job opportunities,” the report explains.

When asked if specialized businesses in the county are already having a difficult time finding a labor force, Stone said, “Yes, just about everyone, not only specialized. (This is) true over most of the state and nation too.”

Yet according to Moody’s analytics portion of the report, in general Sonoma County is “thriving.” And while its weaknesses lie in the tight job market and limited land for new wineries its strengths lie in the low unemployment rate and gargantuan tourism draw.

The Sonoma County Economic Development Board doesn’t only put out its annual newsletters and myriad of data, but also serves as the county’s business consulting service for new businesses who hope to make the county their home.