Employment gains surge, despite cooling housing market
By George Avalon, Contra Costa Times

If there's a housing bubble, the phenomenon has yet to deflate the East Bay economy, where the job market continues to expand.

The East Bay powered to strong employment gains in August compared with the same month the year before, adding more than 23,000 new jobs in the 12-month period. And much of the propellant for the growth came from a construction sector that surged in the last year, the state Employment Development Department reported Friday.

Plenty of warnings have surfaced lately that the housing market has cooled off. And some analysts believe a real estate bubble would inflict the greatest economic damage in regions such as the East Bay, where homes have sprouted at a rapid pace.

The Alameda-Contra Costa region, however, seems to defy such predictions. The East Bay has added plenty of rooftops lately, but it looks as if the East Bay's economic engine consists of much more than real estate.

"The growth in the East Bay is pretty broad-based," said Dan Hamilton, director of the UCSB Economic Forecast Project. "You are firing on all cylinders there."

Construction in August remained a huge driver for the employment upswing in the East Bay. Thanks primarily to gains in jobs for specialty construction, heavy construction and civil engineering construction, the building sector was the best-performing industry over the last year, the EDD reported.

Even the battered manufacturing industry added to the gain in jobs in the East Bay, an indication that other sectors could pick up the slack if construction were to falter significantly. Professional and business services was another major contributor to the East Bay's employment growth.

Overall, the East Bay gained more than 23,000 jobs during the 12 months that ended in August. That was a 2.3 percent gain in payroll jobs over the year. Private industry employment rose at a faster rate, gaining 2.6 percent over the year.

The weakest sector was the information industry, which shrank 2.6 percent, primarily because of job losses in telecommunications.

So why does construction still soar in the East Bay? Much of the answer lies in the relatively wide-open spaces that still exist in areas such as the Tri-Valley and eastern Contra Costa County.

"The East Bay is still growing, and there are still places to build," said Heather Chamizo, an EDD labor analyst. "It is one of the few places in the Bay Area where there is still a lot of land left."

Plus, Chamizo believes commercial real estate is in decent shape locally.

"Office vacancy rates are still fairly low in the East Bay," Chamizo said. "There is still demand for office space."

The jobless rate in the East Bay dropped to 4.5 percent in August, an improvement from the 4.7 percent rate in July and well below the 5.1 percent of August 2005.

In the past year, the East Bay added jobs at nearly twice the rate as the entire state. California jobs grew 1.3 percent during the year.

The increase in jobs in the region is no statistical quirk, one executive said. More employers have begun to display help-wanted signs, said Joan Van Donge, group vice president with Spherion, a staffing services firm.

"Salaries are going up, and job candidates are getting multiple employment offers," Van Donge said. "Employees are willing to commute for the right opportunity. Candidates are being more selective."

Matters are better for job seekers in ways that may seem surprising.

"Employees are not only considering compensation and benefits when they pick a job, but they also are interested in getting a signing bonus," Van Donge said.

She said Spherion is seeing evidence of a dip in housing. But it doesn't seem to be enough to derail job growth in the East Bay.

"There are so many other things that are strong," Van Donge said. "Manufacturing, financial services, transportation."

Van Donge also predicted the current job boom won't vanish any time soon.

"We are way above where we were last year, and I see continuing momentum," Van Donge said. "It is not slowing down or stalling."