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WSJ.com - Building Fuels Inland Boom Bakersfield Is Helping Lead California's Construction Sector Out of the Slump December 11, 2012, 6:57 p.m. ET
Building Fuels Inland Boom
Bakersfield Is Helping Lead California's Construction Sector Out of the Slump
December 11, 2012, 6:57 p.m. ET
By JIM CARLTON
BAKERSFIELD, Calif.—This Central Valley oil town, once hard-hit by the sluggish economy and housing slowdown, is helping lead a resurgence in California's construction industry and providing a hopeful sign for many of the state's inland areas.
During the housing boom, lower-cost inland areas like Bakersfield, Modesto and the Inland Empire east of Los Angeles saw home construction surge, only to crash when lending dried up, leaving huge amounts of unsold inventory. But the industry appears on the mend, with construction employment up year-over-year statewide every month since February amid growth in the technology, energy and international-trade industries, among other factors.
Matt Towery, a 54-year-old home builder, will build 50 homes here this year, versus 24 last year. He is taking his family out to eat more often and plans to buy a replacement soon for a Ford F-350 pickup truck that is nearly 10 years old. "We were stung so hard, it's taken us a long time to come back," Mr. Towery said at a new-home site in late November.
In October, construction employment in California increased by 27,700 jobs, or 5% from a year earlier, according to the Associated General Contractors of America, a trade group. California's unemployment in October fell to 10.1% from 11.5% a year earlier, according to the U.S. Bureau of Labor Statistics.
While the construction recovery in the state is broad-based, the hottest market is Bakersfield, a city of about 350,000 more than 100 miles north of Los Angeles. Surrounding Kern County is one of the biggest oil-producing places in the country, with nearly 40,000 working wells—many within the city itself—that account for the bulk of California's crude output. The city also has become a hub for warehouses and industrial parks that serve Southern California.
Commercial and residential construction jobs in the Bakersfield metro area rose 5% in October from a year earlier, one of the strongest growth rates in the nation, according to the contractors' group. After losing 40,000 total jobs—including 39% of construction jobs—between 2007 and 2010, the Bakersfield area has regained all but about 3,000, according to state data. Construction employment is running 2,800 jobs, or 15%, below 2007 levels.
"It's not any one thing, but a lot of things adding up," said John Emery, dean of the school of business and public administration at California State University, Bakersfield. "It's a great time to be here."
Economists warn that Bakersfield, like California, isn't out of the woods. Kern County's October unemployment rate of 12.2%, while down from 13.5% a year earlier, exceeded both the state and U.S. rate. And despite a rebound in housing starts here and statewide this year, the markets remain well below prerecession levels. Median prices for an existing single-family home plunged 61% in Kern County and 57% for the state as a whole between 2006 and 2009, and they have rebounded to 48% below 2006 levels, according to the California Association of Realtors.
Restoring construction is important, economists say, because it generates many other jobs. Randy Salcido, a plasterer on a three-bedroom project of home builder Mr. Towery, said he and his wife have begun going to movies again after he regained his job three months ago after being sporadically employed since 2008.
Nearby, workers put finishing touches on a four-story cancer center for San Joaquin Community Hospital. An improving economy helped the hospital raise $5 million in donations of the $36.5 million needed for the project, which broke ground in 2011, said Jarrod McNaughton, a hospital vice president. The project, which was completed earlier this month, employed as many as 100 construction workers.
A more-than-doubling of oil prices since late 2008 and increases in California's foreign trade have helped accelerate construction at a 1,400-acre industrial park outside Bakersfield owned by Roll Global LLC. The Los Angeles company has leased 250 acres for warehouse construction to energy and other companies over just the past 18 months, compared with 300 acres over the prior decade, said John Ritchie, vice president of commercial development for a Roll division.
One recent deal was for construction of a 55,000-square-foot facility for Weatherford International Ltd., WFT -0.82%a Swiss oil-field-services firm, to make drilling equipment.
"When oil goes up, you see people reinvesting," said Les Clark, executive vice president of the Independent Oil Producers' Agency in Bakersfield.
Amid the commercial-building uptick, countywide permits for single-family housing have more than doubled this year to more than 900, although that is still less than one-fifth the 2006 peak of 6,000, according to county data.
Bakersfield's Lenox Homes went from building 500 homes in 2005 to 69 in 2010, and it is back up to about 100 this year. "At the end of the day," said David Cates, Lenox Homes' president, "we survived."
Write to Jim Carlton at jim.carlton@wsj.com
Monday, December 10, 2012
Monday, November 19, 2012
California Housing Market Tracking the Rebound and Outlook 11-14-12
https://docs.google.com/open?id=0B74VXcXQg5PZUlR2bC1EZk5jVEk
Saturday, November 17, 2012
Friday, November 16, 2012
Thursday, November 15, 2012
Colliers: Portland office, industrial vacancies among tightest in U.S. - Portland Business Journal
Colliers: Portland office, industrial vacancies among tightest in U.S. - Portland Business Journal
- Wendy Culverwell
- Business Journal staff writer-Portland Business Journal
- Email | Twitter | Google
Portland’s downtown office space tends to attract all the attention, but by one measure, suburban office space is doing just fine.
Portland has one of the tightest office space markets both in downtown and the suburbs, according to a quarterly ranking by Colliers International. For good measure, Colliers notes Portland ranks among the top markets for industrial occupancy rates as well.
For downtown office space, Portland ranks seventh in the nation with an overall vacancy rate of 9.39 percent. Coincidentally, it ranks seventh in the nation for suburban office markets too, with a vacancy rate of 11.6 percent.
Raleigh/Durham/Chapel Hill, N.C. has the tightest downtown market in the nation at 6.5 percent. Dallas/Fort Worth, Texas trails at 23.8 percent.
The national average is 12.58 percent.
Bakersfield, Calif. boasts the tightest suburban market in the country at 6.43 percent, while Las Vegas trails the pack at 25.62 percent. Nationally, the average suburban office vacancy rate is 14.99 percent.
Portland ranks 13th for industrial space at 7.29 percent. Honolulu, Hawaii has the tightest market at 4.27 percent. Boston trails at 16.99 percent.
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Thursday, October 25, 2012
Residential real estate turning around in Central Valley
Central Valley Business Times
CAMPBELL
October 23, 2012 9:00pm
The Central Valley, which led the nation off the housing cliff four years ago, now seems to be leading it back toward recovery, based on figures from the website Realtor.com.
CAMPBELL
October 23, 2012 9:00pm
• Fresno, Bakersfield among strongest markets in state
• Stockton termed a “zoom town” by Realtors
The Central Valley, which led the nation off the housing cliff four years ago, now seems to be leading it back toward recovery, based on figures from the website Realtor.com.
Nationally, the third quarter saw a housing turnaround accelerating and broadening to reach more markets. There was a reduction in median age of inventory of -13.89 percent, as well as a year-over-year reduction in inventory of -8.51 percent, says Realtor.com.
National median list prices also increased slightly at 2.54 percent year-over-year during the third quarter, its report says.
The West continues to be the dominant region in the current housing turnaround, a transition from the Florida-based turnaround in 2011, it says.
This quarter, nine of the Top 10 “Turnaround Towns” – as Realtor.com terms them -- can be found in Western states and seven of the top ten are located in California. All the markets included in the top ten this quarter have histories of high volume foreclosures and dramatic price declines.
For the first time, Oakland led the nation, replacing Phoenix-Mesa, Ariz., as the top Turnaround Town.
Three California cities, Sacramento, San Jose and San Francisco, are also in the top five.
Seattle-Bellevue-Everett, Wash., ranked fifth, moving up from sixth place in the second quarter, while Bakersfield moved up one spot to sixth this quarter. Santa Barbara moved up to seventh place from tenth in the second quarter. Phoenix-Mesa, Fresno and Miami, Fla., rounded out the top ten.
Sacramento makes its debut on the top 10 of Realtor.com’s Top Turnaround report for the first time ever in Q3 2012. Ranking #2, the inventory count in California’s capital was down -45.94 percent year-over-year and median list prices were up 12.06 percent from Q3 2011 at $224,000.
Though the unemployment rate of 10.3 percent in August 2012 was higher than the national average, it was down from last year’s rate of 11.9 percent. The number of default notices of foreclosure in Sacramento also dropped by -36 percent in the third quarter of 2012 year-over-year.
Bakersfield is moving up on the Realtor.com Turnaround Town list. Total inventory is down -41.77 percent compared to this time last year, and homes are moving 41.54 percent faster. New home construction is surging, with building permits increasing almost 70 percent through August 2012 when compared to the full year of 2011.
However, unemployment is still high at 12.8 percent in August and 1 in every 211 housing units received a foreclosure filing in Kern County in September 2012.
Fresno maintains its position this quarter with a quick-paced housing market moving more than 37.70 percent faster than the third quarter last year, according to the website. Available inventory has also decreased more than -44.27 percent. Limited inventory is creating demand in the Clovis area, with several new home developments planned.
The metro continues to struggle with high foreclosure rates — filings were 1 in every 421 units in Fresno County in September 2012 — and unemployment reached 14.0 percent in August.
Several towns have “zoomed” to significantly higher rankings in just one quarter on the Realtor.com Top Turnaround town list. “The fast recovery demonstrated by these cities in the recent quarter shows these markets are on their way to the top,” the website exudes.
Plagued by economic issues and more than its share of foreclosures, Stockton-Lodi today is a market on the rise, says Realtor.com. In the past quarter, it has moved from #61 to #16 on the Realtor.com Turnaround town list.
Shrinking inventory (ranked #2 in the nation) and less time in inventory (#4 overall) are the keys to Stockton-Lodi’s amazing progress this quarter.
Methodology
Rankings of markets are based on their positive year-over-year median price appreciation, reduction in year-over-year median time in inventory, inventory reductions and low unemployment rates on a year-over-year basis. The Realtor.com Turnaround Towns Report uses a formula based on price appreciation, changes in inventory, time in inventory, unemployment rate, and searches by Realtor.com users — a leading indicator of demand — and the ratio of search to listings to equalize markets by size. The resulting report not only reflects price changes that have taken place, but also gives weight to supply and demand dynamics that will create continued progress in future months.
Wednesday, October 24, 2012
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Kern No. 2 California Metro in Economic Recovery - September 21, 2012
Kern No. 2 California Metro in Economic Recovery
September 21, 2012
Kern County ranks second in economic recovery among large California metro areas, according to a Brookings survey released this week. The only California metro with a stronger recovery was San Jose.
Brookings also found that Kern had the second best employment recovery nationwide; the New Orleans area ranked first.
The list below shows how Brookings ranked the eleven large California metros by economic recovery, along with their respective national rankings among the 100 largest U.S. metros; the Bakersfield-Delano metro area includes all of Kern County.
CALIFORNIA METRO AREA | RECOVERY RANKING |
San Jose-Sunnyvale-Santa Clara, CA | 4 |
Bakersfield-Delano, CA | 23 |
Stockton, CA | 37 |
San Diego-Carlsbad-San Marcos, CA | 44 |
San Francisco-Oakland-Fremont, CA | 45 |
Riverside-San Bernardino-Ontario, CA | 53 |
Los Angeles-Long Beach-Santa Ana, CA | 65 |
Oxnard-Thousand Oaks-Ventura, CA | 73 |
Sacramento-Arden-Arcade- | 84 |
Modesto, CA | 85 |
Fresno, CA | 86 |
Source: Brookings Metro Monitor, September 2012
For more information: http://www.brookings.edu/
Wednesday, September 19, 2012
Tuesday, September 11, 2012
Kern County in the News
A California County That’s Making (Good) News
Kern County is developing a reputation for growing high-tech industries such as wind and solar power, aerospace, and distribution/logistics that need highly skilled workers.
Mark Crawford (September 2012)
If you haven’t heard of Kern County, you’re not alone. Located in southern California, it’s always been a rich producer of oil and crops, its wide, flat landscapes marked by fields and rigs shimmering in the distance. The county is roughly centered on Bakersfield, which still has a slow, rough-around-the edges reputation made famous by country singers Buck Owens and Merle Haggard, who considered the city home (you can tour Buck’s Crystal Palace music hall and museum if you happen to be in town). Today, however, Bakersfield/Kern County is anything but slow — in fact, this region is growing at a blistering pace by economic development standards.
“From 2001 to 2010, Kern County’s economy was ranked first out of 102 regions in terms of GDP growth among metros with a population of 500,000 or greater,” says Richard Chapman, president and CEO of the Kern Economic Development Corporation. “During this period average annual GDP growth was 9.7 percent.”
Kern County didn’t slow down in 2011, either. In August 2012 the U.S. Bureau of Labor Statistics announced that Kern County’s 5.3 percent employment gain from December 2010 to December 2011 was not only tops in California, but also the largest employment gain in the country.
Although agriculture and energy are still key industries that employ tens of thousands of workers, Kern County is now developing a reputation for growing high-tech industries such as wind and solar power, aerospace, and distribution/logistics that need highly skilled workers.
High-Growth Industries
Wind and solar companies have received county approval to build three million and one million megawatts (MW) of combined capacity. When operational, Terra-Gen Power’s 1,500 MW project will be world’s largest wind park. Hydrogen Energy California is also developing a $4 billion plant in western Kern County that will incorporate carbon capture and storage and use CO2 for enhanced oil recovery.
Aerospace and defense remains a leading industry cluster. One of the higher-profile operations is the Mojave Air and Space Port. The nation’s first commercial spaceport, this facility is home to over 60 aerospace-related companies, including Richard Branson’s The Spaceship Company and Paul Allen’s new Stratolaunch venture. Edwards Air Force Base and the Naval Air Weapons Station China Lake significantly add to the region’s rich aerospace and defense foundation.
Being located north of Los Angeles County and traversed by California’s two major north-south interstates, Kern County has become a fast-growing hub for transportation and logistics. National firms with Kern County operations include Target, Sears, Famous Footwear, Caterpillar, and Railex. Several of these companies reside at the 1,450-acre Tejon Ranch Commerce Center. This signature commercial/industrial development is already home to three million square feet of existing warehouse facilities. Its newest tenant, Dollar General Corporation, recently announced it would lease 600,000 square feet of warehouse space.
Challenges Remain
Although Kern County has enjoyed enviable growth, one of the biggest obstacles to attracting out-of-state business is overcoming California’s business reputation.
“While no one disputes California has a high business tax burden, it is important to first understand Kern County’s relatively strong competitive position,” says Chapman.
According to a 2010 report by the Public Policy Institute of California, California loses very few jobs to other states. Out of California’s 18 million jobs, the state loses an average of only 9,000 jobs annually as a result of relocation. Another key trend is that almost all significant job migration within the state occurs between adjacent counties — especially outward from central coastal cities. “In general,” says Chapman, “companies are looking to be closer to more productive business clusters and more affordable real estate. In other words, businesses are moving from cities like Los Angeles to regions like Kern County.”
To meet these increasingly diverse work force needs, Kern County is busy improving vocational and technical-skills training in the region. “In the past our basic industries of oil and agriculture did not typically require a postsecondary degree to get a decent job in the field; today, however, a comprehensive understanding of machinery and related automation processes is being required by more of Kern’s major employers,” says Chapman.
This translates into workers having some level of postsecondary education or training, which is a concern for Kern County. Overall, Kern County residents have lower levels of education attainment than other California residents, or the nation as a whole. About 29 percent of Kern County adults have less than a high school diploma, and only 15 percent of Kern’s adult population has a bachelor’s degree or higher.
To improve these numbers, the Kern Economic Development Foundation (KEDF) has launched several mentoring programs to increase awareness of jobs that will be important to the county in coming years. For example, the Alliance of Women in Energy has created a mentoring program for female high school students interested in science, technology, engineering, and math careers. To tackle the expected shortage of physicians, nurses, and other healthcare staff, the Alliance of Medical Professionals helps students prepare for the transition to postsecondary education and healthcare careers.
Long-Term Success
State Farm Insurance Companies recognized the potential in Kern County nearly two decades ago when it first broke ground in 1993. Since then it has relocated employees from other parts of California to its Bakersfield campus. “When we started our search, we wanted to be sure we found a community that would provide a high quality of life, reasonable cost of living, good schools, and access to higher education,” says Christopher C. Ward, vice president for State Farm Insurance Companies’ Westlake Executive Office in Westlake Village.
Because State Farm knew its office would be at least 500,000 square feet in size, it only focused on counties that could accommodate the construction demands with reasonable permitting regulations, as well as provide cutting-edge technology infrastructure. “Bakersfield met the greatest number of our needs,” says Ward.
That was nearly 20 years ago—today his opinion hasn’t changed: “We are pleased with the quality, quantity, and availability of the work force here,” says Ward. “Our partnership with California State University-Bakersfield has become a great opportunity for both organizations. We’re happy to support them and they provide great candidates as we grow our work force. We’re also very pleased with our partnership with the City of Bakersfield — we continue to work together, 19 years later, to make the community even better for the people who live here.”
All contents copyright © 2011 Halcyon Business Publications, Inc.
Monday, September 10, 2012
Many signs point to a Bakersfield boom - latimes.com
Many signs point to a Bakersfield boom - latimes.com
The state's economic recovery has largely been concentrated on the coast, leaving behind much of the hard-hit San Joaquin Valley. But Bakersfield, perhaps best known for oil, agriculture and country music, has reclaimed an old title: boomtown.
Bakersfield has been adding population and jobs at a brisk pace and is a few thousand jobs from matching its peak employment level of five years ago. A price-fueled energy bonanza, low corporate operating costs and an advantageous location are contributing to the area's good fortune.
Employment has grown across many sectors, including manufacturing. Even construction, which suffered mightily statewide during the housing bust, has strengthened. And unlike many struggling municipalities, in Kern County officials have recommended a budget increase that would allow hiring of more than 150 people.
Signs of growth are obvious.
San Joaquin Community Hospital, in downtown Bakersfield, is building a four-story cancer treatment center. Just south of town, equipment giant Caterpillar Inc. is finishing a distribution center. Roads and highways are getting face-lifts. And several corporations have moved operations to the area.
These and other projects have given Bakersfield something to boast about. It leads the country in year-over-year construction employment growth, with payrolls swelling by almost 23% since July 2011. By comparison, state construction employment grew by 5%.
For employers like Griffith Co., a general contractor, construction volume is up 20% from the year before for its Bakersfield branch; it expects to do more hiring when more projects get off the ground.
"It's very exciting," said Luke Walker, Griffith's assistant regional manager. "We're getting close to where we were right before the recession happened."
According to state employment data, Kern County is just 5,600 jobs from matching its peak employment of 239,600 reached in September 2007, when developers were tossing up houses and condos at an unsustainable pace. And the big gainer is Bakersfield, the county seat and its largest city by far.
The area, which has large petroleum deposits, is benefiting from a surge in energy prices. That has led to more drilling for oil and natural gas and boosted other energy projects, which means more hiring.
"We have work in the oil fields," said Danny Kane, business manager for the International Brotherhood of Electrical Workers, Local 428, based in downtown Bakersfield. "We have a lot of solar work. We have wind. We are just fortunate to have those opportunities in Kern County."
Despite the gains in some sectors, the economy in the area hasn't fully recovered.
The unemployment rate remains high, at 13.6% in July, but it has dropped 4.2 percentage points since its peak of 17.8% in March 2010. And there are still about 52,000 unemployed people in Kern County, according to data from the state's Employment Development Department.
Economists, however, note that even during good times, Kern County has had an elevated unemployment rate compared with the state as a whole because of the seasonal hiring pattern of its large agriculture industry. During Bakersfield's employment peak five years ago, for instance, the unemployment rate was 7.2%, compared with 5.6% for the state as a whole.
Although employment has recovered recently, population has been exploding for a decade as people have sought work opportunities and cheap housing.
From 2000 to 2010, the county's population grew to 839,000, a jump of almost 27%, compared with 10% statewide, according to U.S. Census Bureau data. The city boasted nearly 350,000 Bakersfieldians in 2010, about 101,000 more than in 2000, a 41% increase.
"We're growing faster than we create jobs," said Melinda Brown, director of business development for the Kern County Economic Development Corp.
But the recent employment growth is a signal that the area has gotten past "all the layoffs, and people are hiring here and there," she said.
The area's population growth is the main reason San Joaquin Community Hospital is building a 60,000-square-foot cancer center, said Jarrod McNaughton, vice president of marketing and business development. The region has lacked a major hospital-based cancer clinic, and many residents travel to Los Angeles for treatment.
The project, which has created almost 100 construction jobs, is expected to be completed this year. The hospital, with about 2,100 employees, has plans for about 80 new positions in the treatment center, McNaughton said.
"We're hiring well-paying jobs into an economy that has been pretty sluggish," he said. "We're tying to do our part to meet demand and help the economy here."
The hospital has bought nearby property and will demolish buildings to make way for future growth, McNaughton said.
In addition to companies expanding, county planners have aggressively courted others who looked to cut costs during the recession, Brown said.
In the last year, several companies have decided to move operations to Bakersfield, attracted by cheaper office space and land and fast approval of business licenses. The city's location is also a selling point; it's just two hours north of the ports of Los Angeles and Long Beach, attractive to companies with West Coast operations.
Caterpillar last year bought 46 acres and has nearly completed a 400,000-square-foot distribution center at the Tejon Ranch Commerce Center near the junction of Interstate 5 and state Highway 99. This follows the opening of aDollar General distribution hub this year. The industrial center houses hubs for Target, Ikea and Famous Footwear.
Tejon Ranch Co., a publicly traded company, also recently announced plans to open an outlet center in 2014 with the Rockefeller Group at the intersection of the two highways, near its commerce center.
But despite these gains, county economic planners say Bakersfield is still hindered by a variety of weaknesses.
Among them, they say, many outsiders view the city as little more than a dusty industrial and agriculture town near an interstate.
"Bakersfield's perception is tough to overcome," Kern County's Brown said. "It's a challenge in bringing companies here."
But even more problematic for growth is the poorly educated workforce. Only 9.8% of Kern County's population has a bachelor's degree, according to census data, which means high-paying jobs in engineering are difficult to fill and tend to go to workers who relocate from out of state.
"Bakersfield is still a Central Valley economy," said Eduardo Martinez, a Moody'sAnalytics economist, noting that the large agriculture industry means much of the labor force is migrant workers, low-skilled and uneducated.
And the county's reliance on oil makes it vulnerable to drops in energy prices, Martinez said. "There's a high dependence on agriculture and mining, and that's positive during boom years, but not so much if there's a crash."
To that end, employers are investing in worker training, said Richard Chapman, president of the Kern County Economic Development Corp. Other programs sponsored by Chapman's group, such as the Alliance of Women in Energy, pair local high school students with working professionals who mentor them for careers in science and engineering.
Developing residents' skills, Chapman said, is a priority to ensure that employment growth is more widespread and includes well-paying jobs for area residents.
"The only thing that can stop us," Chapman said, "is the availability of the workforce."
John Spaulding, executive secretary of the Building Trades Council for Kern, Inyo and Mono Counties, said that although hiring has increased in the last year, larger and more long-term projects needed to get off the ground to see the recovery accelerate.
Spaulding said he was looking forward to the start of construction on a hydrogen energy plant late next year, which is expected to be a multiyear project that would employ thousands.
"I think it's going to get better," he said. "There's some movement."
ricardo.lopez2@latimes.com
Many signs point to a Bakersfield boom
Unlike much of the state, Bakersfield is adding residents and jobs while attracting companies. But the economy has not fully recovered, and the city is hindered by a variety of weaknesses.
BAKERSFIELD — This mid-size city has become the surprise star of the Central Valley.The state's economic recovery has largely been concentrated on the coast, leaving behind much of the hard-hit San Joaquin Valley. But Bakersfield, perhaps best known for oil, agriculture and country music, has reclaimed an old title: boomtown.
Bakersfield has been adding population and jobs at a brisk pace and is a few thousand jobs from matching its peak employment level of five years ago. A price-fueled energy bonanza, low corporate operating costs and an advantageous location are contributing to the area's good fortune.
Employment has grown across many sectors, including manufacturing. Even construction, which suffered mightily statewide during the housing bust, has strengthened. And unlike many struggling municipalities, in Kern County officials have recommended a budget increase that would allow hiring of more than 150 people.
Signs of growth are obvious.
San Joaquin Community Hospital, in downtown Bakersfield, is building a four-story cancer treatment center. Just south of town, equipment giant Caterpillar Inc. is finishing a distribution center. Roads and highways are getting face-lifts. And several corporations have moved operations to the area.
These and other projects have given Bakersfield something to boast about. It leads the country in year-over-year construction employment growth, with payrolls swelling by almost 23% since July 2011. By comparison, state construction employment grew by 5%.
For employers like Griffith Co., a general contractor, construction volume is up 20% from the year before for its Bakersfield branch; it expects to do more hiring when more projects get off the ground.
"It's very exciting," said Luke Walker, Griffith's assistant regional manager. "We're getting close to where we were right before the recession happened."
According to state employment data, Kern County is just 5,600 jobs from matching its peak employment of 239,600 reached in September 2007, when developers were tossing up houses and condos at an unsustainable pace. And the big gainer is Bakersfield, the county seat and its largest city by far.
The area, which has large petroleum deposits, is benefiting from a surge in energy prices. That has led to more drilling for oil and natural gas and boosted other energy projects, which means more hiring.
"We have work in the oil fields," said Danny Kane, business manager for the International Brotherhood of Electrical Workers, Local 428, based in downtown Bakersfield. "We have a lot of solar work. We have wind. We are just fortunate to have those opportunities in Kern County."
Despite the gains in some sectors, the economy in the area hasn't fully recovered.
The unemployment rate remains high, at 13.6% in July, but it has dropped 4.2 percentage points since its peak of 17.8% in March 2010. And there are still about 52,000 unemployed people in Kern County, according to data from the state's Employment Development Department.
Economists, however, note that even during good times, Kern County has had an elevated unemployment rate compared with the state as a whole because of the seasonal hiring pattern of its large agriculture industry. During Bakersfield's employment peak five years ago, for instance, the unemployment rate was 7.2%, compared with 5.6% for the state as a whole.
Although employment has recovered recently, population has been exploding for a decade as people have sought work opportunities and cheap housing.
From 2000 to 2010, the county's population grew to 839,000, a jump of almost 27%, compared with 10% statewide, according to U.S. Census Bureau data. The city boasted nearly 350,000 Bakersfieldians in 2010, about 101,000 more than in 2000, a 41% increase.
"We're growing faster than we create jobs," said Melinda Brown, director of business development for the Kern County Economic Development Corp.
But the recent employment growth is a signal that the area has gotten past "all the layoffs, and people are hiring here and there," she said.
The area's population growth is the main reason San Joaquin Community Hospital is building a 60,000-square-foot cancer center, said Jarrod McNaughton, vice president of marketing and business development. The region has lacked a major hospital-based cancer clinic, and many residents travel to Los Angeles for treatment.
The project, which has created almost 100 construction jobs, is expected to be completed this year. The hospital, with about 2,100 employees, has plans for about 80 new positions in the treatment center, McNaughton said.
"We're hiring well-paying jobs into an economy that has been pretty sluggish," he said. "We're tying to do our part to meet demand and help the economy here."
The hospital has bought nearby property and will demolish buildings to make way for future growth, McNaughton said.
In addition to companies expanding, county planners have aggressively courted others who looked to cut costs during the recession, Brown said.
In the last year, several companies have decided to move operations to Bakersfield, attracted by cheaper office space and land and fast approval of business licenses. The city's location is also a selling point; it's just two hours north of the ports of Los Angeles and Long Beach, attractive to companies with West Coast operations.
Caterpillar last year bought 46 acres and has nearly completed a 400,000-square-foot distribution center at the Tejon Ranch Commerce Center near the junction of Interstate 5 and state Highway 99. This follows the opening of aDollar General distribution hub this year. The industrial center houses hubs for Target, Ikea and Famous Footwear.
Tejon Ranch Co., a publicly traded company, also recently announced plans to open an outlet center in 2014 with the Rockefeller Group at the intersection of the two highways, near its commerce center.
But despite these gains, county economic planners say Bakersfield is still hindered by a variety of weaknesses.
Among them, they say, many outsiders view the city as little more than a dusty industrial and agriculture town near an interstate.
"Bakersfield's perception is tough to overcome," Kern County's Brown said. "It's a challenge in bringing companies here."
But even more problematic for growth is the poorly educated workforce. Only 9.8% of Kern County's population has a bachelor's degree, according to census data, which means high-paying jobs in engineering are difficult to fill and tend to go to workers who relocate from out of state.
"Bakersfield is still a Central Valley economy," said Eduardo Martinez, a Moody'sAnalytics economist, noting that the large agriculture industry means much of the labor force is migrant workers, low-skilled and uneducated.
And the county's reliance on oil makes it vulnerable to drops in energy prices, Martinez said. "There's a high dependence on agriculture and mining, and that's positive during boom years, but not so much if there's a crash."
To that end, employers are investing in worker training, said Richard Chapman, president of the Kern County Economic Development Corp. Other programs sponsored by Chapman's group, such as the Alliance of Women in Energy, pair local high school students with working professionals who mentor them for careers in science and engineering.
Developing residents' skills, Chapman said, is a priority to ensure that employment growth is more widespread and includes well-paying jobs for area residents.
"The only thing that can stop us," Chapman said, "is the availability of the workforce."
John Spaulding, executive secretary of the Building Trades Council for Kern, Inyo and Mono Counties, said that although hiring has increased in the last year, larger and more long-term projects needed to get off the ground to see the recovery accelerate.
Spaulding said he was looking forward to the start of construction on a hydrogen energy plant late next year, which is expected to be a multiyear project that would employ thousands.
"I think it's going to get better," he said. "There's some movement."
ricardo.lopez2@latimes.com
Tuesday, September 4, 2012
Kern No. 1 in Construction Job Gains-Again
Kern No. 1 in Construction Job Gains-Again
August 31, 2012
Kern County once again had the highest rate of construction gains nationwide, according to an analysis of federal employment data released this week.
The Associated General Contractors of America found that between July 2011 and July 2012, Kern added 3,200 construction jobs, a 23% gain. That increase was far greater than the second highest metro – Yuba City – at 18%.
Nationwide, construction employment declined in 165 out of 337 metropolitan areas, increased in 123 and was stagnant in 49.
The highest ranking metros are listed below; the Bakersfield-Delano metro area includes all of Kern County.
Construction Employment by Metropolitan Area or Division, July 2011-July 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(not seasonally adjusted)
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Taken from...
CONSTRUCTION EMPLOYMENT DECLINES IN 165 OUT OF 337 METRO AREAS BETWEEN JULY 2011 & 2012 AS COMMUNITIES COPE WITH SHRINKING PUBLIC SECTOR BUDGETS | AGC - The Associated General Contractors of America
Press Release
CONSTRUCTION EMPLOYMENT DECLINES IN 165 OUT OF 337 METRO AREAS BETWEEN JULY 2011 & 2012 AS COMMUNITIES COPE WITH SHRINKING PUBLIC SECTOR BUDGETS
Date: August 28, 2012
Springfield, Mass.-Conn. Had Largest Percentage Decline, Chicago-Joliet-Naperville, Ill. Lost the Most Jobs; Bakersfield-Delano, Calif. and Los Angeles-Long Beach-Glendale, Calif. Are Top Gainers
Construction employment declined in 165 out of 337 metropolitan areas between July 2011 and July 2012, increased in 123 and was stagnant in 49, according to a new analysis of federal employment data released today by the Associated General Contractors of America. Association officials said that the new data comes out as many metro areas continue to struggle with constricting public sector budgets and uneven private sector growth.
“Construction employment is healthy in the handful of areas where private sector demand is on the rebound,” said Ken Simonson, the association’s chief economist. “However, construction employment in most metro areas is suffering from the effects of tepid private sector demand and shrinking public sector construction budgets.”
The largest job losses were in Chicago-Joliet-Naperville, Ill. (-6,500 jobs, -5 percent); followed by Tampa-St. Petersburg-Clearwater, Fla. (-6,100 jobs, -12 percent); Nassau-Suffolk, N.Y. (-5,100 jobs, -8 percent); New Orleans-Metairie-Kenner, La. (-5,000 jobs, -16 percent) and Virginia Beach-Norfolk-Newport News, Va.-N.C. (-4,400 jobs, -12 percent). Springfield, Mass.-Conn. (-28 percent, -3,000 jobs) lost the highest percentage. Other areas experiencing large percentage declines in construction employment included Anchorage, Alaska (-23 percent, -2,500 jobs); Detroit-Livonia-Dearborn, Mich. (-17 percent, -3,600 jobs) and Jackson, Miss. (-16 percent, -1,800 jobs).
Bakersfield-Delano, Calif. added the highest percentage of new construction jobs (23 percent, 3,200 jobs) followed by Yuba City, Calif. (18 percent, 300 jobs); El Centro, Calif. (15 percent, 200 jobs) and Pascagoula, Miss. (15 percent, 700 jobs). Los Angeles-Long Beach-Glendale, Calif. (7,700 jobs, 7 percent) added the most jobs. Other areas adding a large number of jobs included Fort Worth-Arlington, Texas (6,200 jobs, 11 percent); Phoenix-Mesa-Glendale, Ariz. (5,600 jobs, 7 percent); Indianapolis-Carmel, Ind. (5,300 jobs, 12 percent) and Denver, Colo. (4,600 jobs, 7 percent).
Association officials cautioned that the growth in private sector construction activity taking place in some areas could be undermined by the threat of drastic tax increases next year. They urged Congress and the administration to work together to provide tax certainty while addressing chronic funding challenges for key infrastructure programs.
“Construction employment will suffer a significant blow if Washington gridlocks its way to another recession,” said the association’s chief executive officer, Stephen E. Sandherr. “Setting our fiscal house in order in a way that provides employers with predictable tax rates while allowing for needed infrastructure investments will boost employment in construction and many other sectors.”
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