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.