Bay Area Council Blog: Economy Archive

1.6.11.2

Silicon Valley/San Jose Business Journal: International trade showing recovery

International trade — which declined with the global economy in 2009 — is recovering, according to a report released Thursday by the Bay Area Council Economic Institute.

“After a deep global recession, trade is growing again,” said Sean Randolph, president & CEO of the Bay Area Council Economic Institute. “This is important not just for large companies, but for thousands of small and medium sized companies as well. As a major trading region, we need to support open markets, help smaller companies succeed as exporters, and invest in the port, airport and transportation infrastructure that will support a growing volume of goods and people entering and leaving the region.”

The report said that while in recent years the United States has not actively sought new free trade agreements, three bilateral agreements negotiated by the Bush Administration — with Korea, Columbia and Panama — have been stalled in Congress.

Of those, the agreement with Korea is most important to the Bay Area, the report added.

“Passage of the Korea-U.S. Free Trade Agreement is a Bay Area priority, and should be supported by every member of the region’s Congressional delegation,” said Jim Wunderman, president & CEO of the Bay Area Council.

Read the story…

1.6.11

Press Release: International Trade Showing Signs of Recovery After 2009 Decline, According to New Bay Area Council Economic Institute Report

The Bay Area Council Economic Institute (BACEI) today released a new report, International Trade and the Bay Area Economy: Regional Interests and Global Outlook, 2010-2011. The fourth in a series produced in alternating years since 2003, the report assesses current trends in international trade, trade negotiations, regional trade activity, and trade-related infrastructure.

It finds that international trade, which declined with the global economy in 2009, is recovering.

“After a deep global recession, trade is growing again,” said Sean Randolph, President & CEO of the Bay Area Council Economic Institute.  “This is important not just for large companies, but for thousands of small and medium sized companies as well.  As a major trading region, we need to support open markets, help smaller companies succeed as exporters, and invest in the port, airport and transportation infrastructure that will support a growing volume of goods and people entering and leaving the region.”

The report notes that while in recent years the United States has not actively sought new free trade agreements, three bilateral agreements negotiated by the Bush Administration – with Korea, Columbia and Panama – have been stalled in Congress.  Of these, it finds that the agreement with Korea is most important to the Bay Area, due to the size of Korea’s economy and its status as a major trading partner.  President Obama has expressed support for all three agreements, and has negotiated amendments to the Korea agreement that will set up a Congressional vote this year.

“Passage of the Korea-U.S. Free Trade Agreement is a Bay Area priority, and should be supported by every member of the region’s Congressional delegation,” said Jim Wunderman, President & CEO of the Bay Area Council.

From a Bay Area standpoint, the report notes two other trade forums that merit particular attention in 2011. Negotiations are underway for a Trans-Pacific Partnership with nine U.S. trading partners in the Asia-Pacific region.  The United States will also host the 21-nation APEC (Asia-Pacific Economic Cooperation) Leaders Summit in Honolulu in November.  The pre-summit, which will engage 1,000-2,000 ministers, ambassadors, senior officials and business leaders from the 21 APEC economies, will be held in San Francisco in September, offering a unique opportunity to address California and Bay Area priorities.

These developments are particularly important for the Bay Area, which ranks as the nation’s fourth largest source of exports.  Asia continues to be the Bay Area’s largest export market, with computer and electronic products the leading export. The region’s exports are diverse, however, also including wine, apparel, petroleum products, and a wide array of services.

A survey conducted for the report of leading Bay Area companies and where they earn their revenue (in the U.S. or overseas) finds that 2009 broke a longstanding trend in which companies derived an ever-increasing share of revenue from global markets. This reflected the stalling of the global economy in 2008-09.  With trade gathering momentum in 2010 and strong growth in many Asia-Pacific markets, however, the historic trend toward growing dependence on international trade is likely to resume.


PDF Press Release

Download the Report

12.20.10

Sacramento Business Journal: California’s clean-tech industry faces increasing competition

Should California fail to produce clean-tech companies that aggressively compete in domestic and global markets, other nations that are adopting policies and providing financial support for the clean-tech sector will fill the void, costing California jobs and economic growth, according to a Bay Area Council Economic Institute report released Tuesday.

California’s success as a leader in energy and climate policy and cutting-edge clean-energy technology development needs to be seen in a global context, according to the report.

According to the institute, a public-private partnership of business, labor, government and higher education, California attracted more than $1 billion in clean-tech investment in the second quarter, accounting for 70 percent of U.S. clean-tech investment and 50 percent of global investment in the sector.

But the bar is being set by Germany, a global leader in solar and wind, and China, which has emerged as a major global producer of solar, wind, battery and other clean-tech products.

China is now the word’s leading supplier of solar panels, accounting for 30 percent of world production, and is tied with the United States for installed renewable energy capacity but is growing its capacity three times faster.

Read the story…

12.15.10

Press Release: NEW ECONOMIC ANALYSIS SAYS CALIFORNIA’S CLEAN TECH LEADERSHIP AT RISK

California continues to hold an edge over China and other countries as the world’s innovation leader for clean energy technology, but will fall behind if state leaders falter in their pursuit of forward-looking energy and climate policies, according to a report released today by the Bay Area Council Economic Institute.

According to the analysis conducted by the Institute, a public-private partnership of business, labor, government, and higher education, California has attracted 70 percent of U.S. investment in clean tech and 50 percent of global investment. In the second quarter of 2010 alone, clean tech investment totaled $1 billion. The state, says the study, also leads the nation in clean tech jobs.

But China, as well as Germany and an array of other countries, are poised to overtake California if the state retreats on implementation of its pioneering clean energy and clean air standard, AB 32, low carbon fuel standards, and its Renewable Energy Portfolio Standard (RPS).

Other countries lead the U.S. and California in the production and sale of renewable energy equipment, and China is investing heavily in clean tech deployment. California’s challenge is to both sustain and grow its edge in venture investment and technology innovation, and capture the downstream jobs that result.

“With a strong strategy of our own to deploy clean energy, we can remain competitive with countries like China and Germany,” says R. Sean Randolph, President & CEO of the Bay Area Council Economic Institute and author of the report. “If we fail, the state’s leadership and thousands of current and future jobs are at risk.”

According to the analysis, the reason for California’s strong position is its long-term policy direction, tremendous technology research and development capacity, and the ability to create and sustain new businesses.

“California has an entrepreneurial culture; we are better than anyone else at taking an innovative idea and turning it into a profit: from research to development to deployment,” says Randolph. “Our state has a long history of global leadership in emerging sectors, attracting venture capital investment, growing the number of new businesses, creating jobs and maintaining the state’s strong economic standing. California has the highest proportion of clean tech jobs of any U.S. state; we need to continue that momentum with aggressive policies that nurture this fast-growing industry.”

“California has become the international leader in creating clean tech jobs and businesses, but that leadership is currently being threatened by China and even Germany,” said Governor Arnold Schwarzenegger.  “As this study points out, to ensure that California remains at the forefront of this sector, we must continue to encourage the growth of the clean tech industry or we run the risk of other countries taking the lead in the marketplace.”

PDF Press Release
Download the Report

9.23.10

Press Release: AFTER SLIGHT DIP OVER THE SUMMER, BAY AREA BUSINESS CONFIDENCE TRENDS UPWARD AGAIN

SAN FRANCISCO, CA — The Bay Area Council today released its fall Business Confidence Survey, and the results show that Bay Area CEO’s and executives are feeling more positive about the Bay Area economy, however, they expect the current status quo of slow growth and recovery to continue.  The business confidence index – the number that distills the survey findings – registered at 58 out of 100, up 2 points from the last survey, but still down 4 points from May.

A reading over 50 signals positive economic times, while below 50 is negative.  Last quarter’s Survey showed the index reading at 56 – making this the fifth positive reading in a row since the summer of 2009.  One year ago, the reading registered 53, and in January 2009, the index reached its all-time low of 31.

“Increases in the stock market, actions by the Fed, and our slow, but continued recovery are providing confidence that things are getting better, more than they are getting worse,” said Jim Wunderman, President & CEO of the Bay Area Council. “Small and medium sized companies are still very reluctant to hire new workers, but larger corporations are showing signs that they might be expanding their workforces over the next couple of months.”

The responses of the 473 CEO’s and top executives in the nine Bay Area counties surveyed between November 10th and November 30th, show that overall, 47% think Bay Area economic conditions are better than 6 months ago, up 6 points from last quarter’s survey.  In addition, 53% said they expect a better Bay Area economy 6 months from now, up 9 points from last quarter.

The Survey indicates that a majority of executives, 56%, expect their workforces to remain the same over the next 6 months.  However, 27% of executives stated they planned to increase their workforce.  41% of executives in San Francisco County and 37% of executives in San Mateo County expect to increase their workforces over the next 6 months. Additionally, the Survey showed that 50% of Bay Area companies with over 10,000 employees expect to increase their workforce over the next six months, an increase of 41 points since last quarter’s survey.

In certain industries, there is much optimism that things will be better in 6 months. 52% of executives in professional and business services, and 94% of leisure and hospitality executives expect their industry conditions to improve.  Entering the holiday season, 22% of retail executives expect their industry to improve. Other noteworthy areas expecting better industry conditions in 6 months include: manufacturing (47%), information technology (47%), and financial services (46%).

Finally, when asked, “Which of the following issues is having the biggest impact on your business at this time,” 74% of executives listed the overall economy, out of choices that included: financial regulation (7%), healthcare reform (6%), the tax rate (6%) and debt and deficits (4%).

“While there is still a large degree of uncertainty in executives’ outlook, the most promising news in this quarter’s survey is big corporations’ intent to start hiring in the next six months.  If that comes true, it will be welcome news for the recovery,” said Lenny Mendonca, Director at McKinsey & Company.

PDF Press Release
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12.2.10.2

Doyle Drive Public-Private Partnership Prompts Lawsuit From State Public Engineers Union

The state engineers union is suing to stop the Doyle Drive rebuild because it is partially financed through a public-private partnership (P3) with international investors. The Council is currently exploring ways to get involved so that the project isn’t stopped.  We can’t afford to let this project be derailed because of the seismic risk of not repairing the span, but also because the lawsuit may affect P3 investments all across the country if the union prevails.  With the state and nation facing huge deficits for the conceivable future, P3 investments will be the only way to get major infrastructure projects financed and completed.

Rendering of Doyle Drive after construction.

12.2.10

Article of the Week

The Brookings Institution has released a new report highlighting the importance of metro areas in the global economy. The world’s top 150 metro areas contribute 46% of all goods and services, though they account for just 12% of the population. Thanks to Alan Berube, Senior Fellow at the Brookings Institution, for recognizing the Bay Area Council as “one of the most active groups nationwide in terms of promoting economic growth on a regional basis.”

11.1.10

San Jose Mercury News – Silicon Valley economy expected to bounce back

Silicon Valley’s economy should rebound from the recession before the rest of the state and Bay Area, thanks to an infusion of venture capital and increased demand for its high-tech products, an economic forecaster said Friday.

“It’s clearly bouncing back faster than either the East Bay or San Francisco,” said Jon Haveman of Beacon Economics, a San Rafael economic analysis company. But it’s going to take a few years before employment returns to its pre-recession levels, he warned.

Haveman’s prediction of the valley’s gradual return to growth, delivered at the Bay Area Council Economic Institute’s annual forecast meeting in Santa Clara, was both upbeat and cautious.

While the valley was “late to the recession,” it is among the first coming out, Haveman said. The housing bubble wasn’t as bad in the valley as it was in other parts of the state, and manufacturing output is rebounding, he said.

Manufacturing job growth should continue here, he said, but it won’t pull the economy out of the slump. That’s because the valley is good at developing new products, which requires fewer jobs than manufacturing, which it tends to do elsewhere.

A positive sign is venture capital — the valley gets 40 percent of all U.S. venture money — and “an awful lot of cleantech venture capital money is coming to Silicon Valley. That bodes quite well,” Haveman said.

Read the story…

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2010 Regional Economic Forecast Conference Series: An Uncertain Recovery

The Bay Area Council Economic Institute, in partnership with Beacon Economics, is pleased to present its 2010 series of regional economic forecast conferences focusing on the major economies of the San Francisco Bay Area.

This is the fourth year in which Beacon and the Economic Institute have joined forces to present the region’s leading, and most accurate, business and economic forecast.

We invite you to join us to hear Dr. Jon Haveman, one of California’s leading economists, present an insightful, detailed assessment of what is happening—and is likely to happen—in the region’s economy in the coming year.

South Bay/Silicon Valley
Economic Forecast Conference
Friday, October 29, 2010

Silicon Valley Bank
3005 Tasman Drive, Santa Clara
Program 8:00 to 10:00 a.m.
Cost: $25.00
REGISTER NOW

San Francisco
Economic Forecast Conference
Monday, November 1, 2010

Wells Fargo Bank
420 Montgomery Street, Penthouse
Program 8:00 to 10:00 a.m.
Cost: $25.00
REGISTER NOW

East Bay
Economic Forecast Conference
Tuesday, November 9, 2010

Reed Smith LLP
1999 Harrison Street, Suite 2400, Oakland
Program 8:00 to 10:00 a.m.
Cost: $25.00
REGISTER NOW

Online Preregistration is Required
Registration check-in will open at 8:00 a.m. on event day, with the program running from 8:30 to 10:00 a.m.

Get answers to today’s most pressing economic questions:

  • The dreaded “double dip”: Is the economy out of the woods or is there a real chance of a double dip back into recession?
  • What is not up? Interest rates. Is it a bond bubble or are fears of deflation real?
  • Tax increases or deficit expansion…which poses the bigger risk?
  • Is California ahead or behind in the recovery?
  • How is the Bay Area faring compared to the state and the nation?

The 2010 Bay Area Economic Forecast is presented in cooperation with the Contra Costa Council, East Bay Economic Development Alliance, Haas School of Business Alumni Network, North Bay Leadership Council, Oakland Metropolitan Chamber of Commerce, San Francisco Center for Economic Development, San Jose/Silicon Valley Chamber of Commerce, San Mateo County Economic Development Association (SAMCEDA) and the Tri-Valley Business Council.

For more information about the Economic Institute, Beacon Economics, and keynote speaker Dr. Jon Haveman, please visit the Events & Forums page of Institute’s website at www.bayareaeconomy.org.