Q2 2012 Oakland-East Bay, California Commercial Real Estate Economy

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Q2 2012 Oakland-East Bay, California Commercial Real Estate Economy

The Government sector is holding back the Oakland-East Bay Metropolitan Division according to the latest data. According to Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS), Oakland’s total non-farm payroll employment was up by just 11,900 jobs (1.2%) year-over-year in June, but the private sector was up a more respectable 15,600 jobs (2.0%). Household-based data from the BLS on the number of employed residents of the Oakland-East Bay area, including the self-employed and commuters to the South Bay and San Francisco area, increased by a strong 28,900 (2.5%) in the year to June 2012. Clearly Oakland-East Bay residents are taking advantage of the stronger job market elsewhere in the broader Bay Area. The Government sector, meanwhile, lost 3,700 jobs (2.2%) in the year to June according to CES data, led by a decrease of 3,300 (5.6%) in Local Government Educational Services.

With its more abundant land and mainland location, the blue collar East Bay is the home to much of the Bay Area’s industrial activity, and to the sort of big-box stores that are shunned in the wealthier West Bay. While major financial institutions were located across the bay in San Francisco, the East Bay was the home to many subprime lenders—and their customers. And economic activity that gets priced out of San Francisco to places such as Oakland during tech booms tend to retreat there when times get tough. Thus, the Great Recession hit the East Bay particularly hard.

The latest CES data show most of those sectors hit hard by the recession continue to suffer. The Financial Activities sector lost another 1,400 jobs (2.9%) in the year to June, and although Retail Trade managed a gain of 1,000 (1.0%), Leisure and Hospitality employment was flat. There is better news among the industrial sectors. Though Manufacturing lost another 1,300 jobs (1.6%) in the year to June 2012, the long suffering Construction sector added 2,600 jobs (5.6%), and the distribution-oriented Wholesale Trade and Transportation and Warehousing sectors added 2,600 (6.2%) and 600 (2.1%), respectively. Within Construction it was the Specialty Trade Contractors industry that added jobs, implying that remodeling and rehabilitation—not new construction—is leading the resurgence. The office-based Professional and Business Services sector gained a modest 3,300 jobs (2.1%), barely enough to offset the losses in Finance, while the institutional Educational and Health Services sector gained 6,300 jobs (4.6%).