Robust job growth in Bay Area, Silicon Valley has peaked, experts say

Economy expected to become more sluggish during next two years

SAN FRANCISCO » The job markets in the Bay Area and Silicon Valley will continue to expand this year and next, but the pace of growth will slow from what occurred during 2018, economists predicted Thursday at an annual conference.

The prognostications about a slowdown were presented by economists from the UCLA Anderson Forecast at the second annual economic outlook conference hosted in San Francisco by UC Hastings Law School.

“We are expecting a little bit of a slowdown in the Bay Area,” William Yu, a UCLA Anderson economist, said during an interview prior to the conference.

Similarly, a more sluggish picture is expected for the California economy.

“California job and economic growth will slow down” in 2019 and 2020, Jerry Nickelsburg, director of the UCLA Anderson Forecast, said during a presentation for the event.

Even though the economists predict a slower pace of job growth, the warning signs have yet to coalesce into a full-fledged expectation of an actual recession in California or the United States.

“We don’t really see anything that will drive us into a recession” in the U. S. that’s obvious, Nickelsburg said, although he added that by sometime in late 2020, a “recession risk” could materialize nationwide.

The statewide job market, which UCLA Anderson calculated grew by 2 percent in 2018, is expected to expand by 1.8 percent in 2019 and 0.6 percent in 2020, Nickelsburg said during his pre- sentation.

During 2018, non-farm payroll job totals increased by 2 percent in the Bay Area, 1.4 percent in the East Bay, 1.6 percent in Santa Clara County and 3.7 percent in the San Francisco-San Mateo region, according to seasonally adjusted figures released by the state’s Employment Development Department.

The Bay Area employment sector, measured by non-farm payroll jobs, is expected to grow by 2 percent during 2019 and 1 percent in 2020, Yu predicted during his presentation.

The job market in Silicon Valley, defined as Santa Clara County, will also grow 2 percent this year and 1 percent next year, Yu said during an interview prior to his presentation on Thursday.

Despite expectations of a jobs slowdown in the Bay Area, the technology industry will continue to be the region’s economic engine, the forecasters said.

“Silicon Valley is the technology center of the world,” Yu said. “Tech jobs are the main driver of the Bay Area economy.”

Through a combination of leases and property purchases, tech titans such as Google, Apple, Amazon, Facebook and Adobe have undertaken an unprece-

dented expansion and quest for more elbow room for their operations and new employees in recent years.

The widening sluggishness in the economy, both in the Bay Area and California, is being influenced by the prospect of a weaker United States economy and job market — as well as an unusual set of circumstances in the Bay Area and statewide.

The job markets in the Bay Area and California have effectively reached full employment, which, in a practical sense, means that virtually everyone who wants a job is able to find one, or already has a job.

But that dynamic also means it’s getting tougher and tougher for employers to scout for qualified workers.

“We are at full employment in California,” Nickelsburg said. “It’s hard for employers to find people to hire.”