The San Luis Obispo economic recovery has hit its stride, according to recently revised employment figures from Californias Employment Development Department.
The 2013 Benchmark Employment Revision revealed that San Luis Obispo County has recovered all of the jobs lost during the downturn, and nonfarm payrolls are at their highest level in recorded history.
Since employment hit bottom in July 2009 through the end of 2012, San Luis Obispo County has added 10,100 jobs or 10.8 percent of its employment base. That is 5,300 more jobs than initially reported by the EDD roughly twice the amount of job growth than previously believed.
Strong upward revisions to the leisure and hospitality, financial activities and manufacturing sectors were largely behind these gains, which now put San Luis Obispo County ahead of every other major metropolitan area in the state in terms of job growth. With a 10 percent increase in nonfarm jobs since California reached its trough, San Luis Obispo has outpaced San Francisco and San Jose two regions that are widely touted as engines of statewide job growth.
Beyond the labor markets, consumer and business spending were up by more than 23 percent in 2012 after growing by more than 11 percent during 2011. Business and industry sales, driven by large investments at the Topaz and California Ranch solar farms, more than doubled over 2011. And, although this spending largely represents a one-time boost to the local economy, these projects have helped the region to move close to its pre-recession spending levels.
Spending by residents has also been on the rise across San Luis Obispo County, with double-digit growth in both auto sales (up 11.7 percent) and building materials (up 28.8 percent) last year. Indeed, every major category of spending in the county saw growth during 2012, suggesting that overall improvement in the local economy will continue to fuel spending growth this year.
Tourism also continues to play a key role in the countys economic recovery as it becomes more intertwined with the agriculture (wine industry) sector, which filters through to local restaurants and retail establishments sectors that have all performed well during the recovery.
By January 2013, hotel occupancy in San Luis Obispo County had climbed to 67.7 percent an increase of two percentage points over the past 12 months, putting the region ahead of Ventura, Monterey, and Santa Barbara counties.
Additionally, the Central Coast was recently rated among the top 2012 Labor Day destinations by AAA. Given that domestic and international tourism continue to rise, San Luis Obispos idyllic climate, proximity to both Northern and Southern California, and thriving wine business should help fuel continued growth as the national economic recovery gains steam.
The local real estate market also bounced back in 2012 after stalling somewhat in 2011. Last year, there were almost 3,150 existing single-family home sales in San Luis Obispo County. That represents a 13.8 percent increase over 2011, demonstrating that a combination of low interest rates, rising incomes and an improving labor market have helped to spur the local housing recovery.
Increasing demand for homes is also giving way to price appreciation. The median price paid for an existing home in San Luis Obispo County rose to $378,000 at the end of last year roughly 5 percent higher than the $349,000 hit at the end of 2011. This trend has been aided by relatively low levels of inventory: the California Association of Realtors reports that the inventory of homes available for sale is currently at just five months of supply. That represents a lower inventory level than in Santa Barbara or Ventura counties, and slightly more supply than Monterey (3.8 months).
Tight supply and rising prices have caught the attention of builders. A total of 392 new residential units were permitted in San Luis Obispo County last year (through November) almost 60 percent more than were permitted in 2011.
And, in addition to tight supply, San Luis Obispo County was the only area along the Central Coast that saw positive net domestic migration last year meaning that a greater number of residents moved into the region than moved out. Santa Barbara, Ventura and Monterey counties all experienced negative domestic migration last year.
The economic recovery in San Luis Obispo County has been slow in coming but, at last, things are moving in the right direction. All major economic indicators show that the worst is behind the region and as the national economy gains steam, the prospects for the region will only continue to improve.
Jordan G. Levine is an economist and director of economic research at www.beaconecon.comBeacon Economics LLC, an independent economic research and consulting firm. Beacon Economics has a long-standing relationship with the Central Coast Economic Forecast and provides CCEF with comprehensive data and analysis on the Central Coast region. CCEF is an independent organization dedicated to understanding and supporting the San Luis Obispo County economy. CCEF publishes a detailed quarterly analysis of the local economy and produces an annual economic forecast event.