Monday, September 24, 2012

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.

San Jose-Sunnyvale-Santa Clara, CA
Bakersfield-Delano, CA
Stockton, CA
San Diego-Carlsbad-San Marcos, CA
San Francisco-Oakland-Fremont, CA
Riverside-San Bernardino-Ontario, CA
Los Angeles-Long Beach-Santa Ana, CA
Oxnard-Thousand Oaks-Ventura, CA
Sacramento-Arden-Arcade-Roseville, CA
Modesto, CA
Fresno, CA
Source: Brookings Metro Monitor, September 2012

Tuesday, September 11, 2012

Kern County in the News

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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.

Packing Up: Where People Are Moving In and Out - Housing - The Atlantic Cities

Packing Up: Where People Are Moving In and Out - Housing - The Atlantic Cities

Monday, September 10, 2012

Local median home prices strong in August -

Local median home prices strong in August -

100 Fastest-Growing Companies 2012: States - - FORTUNE on CNNMoney

100 Fastest-Growing Companies 2012: States - - FORTUNE on CNNMoney

Many signs point to a Bakersfield boom -

Many signs point to a Bakersfield boom -

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."

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)
AreaIndustryJuly 11July 1212-mon. % change12-mon. gain/lossRank
Bakersfield-Delano, CAConstruction14,20017,40023%3,2001
Yuba City, CAConst, mining, logging1,7002,00018%3002
El Centro, CAConst, mining, logging1,3001,50015%2003
Pascagoula, MSConst, mining, logging4,8005,50015%7003
Lafayette, LAConstruction6,5007,40014%9005
Chico, CAConst, mining, logging2,4002,70013%3006
Elkhart-Goshen, INConst, mining, logging3,2003,60013%4006
Fargo, ND-MNConst, mining, logging7,5008,50013%1,0006
Tucson, AZConstruction14,90016,80013%1,9006

Taken from...

Press Release


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.”
View construction employment figures by state and rank.