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The Economy of the SF Peninsula: What ’ s up, what ’ s not, in 2011?

The Economy of the SF Peninsula: What ’ s up, what ’ s not, in 2011?. Presented to the Harbor Industrial Association May 5, 2011 Van ’ s Restaurant, Belmont, California Anne Ramstetter Wenzel Principal Economist Econosystems Menlo Park, California.

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The Economy of the SF Peninsula: What ’ s up, what ’ s not, in 2011?

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  1. The Economy of the SF Peninsula:What’s up, what’s not, in 2011? Presented to the Harbor Industrial Association May 5, 2011 Van’s Restaurant, Belmont, California Anne Ramstetter Wenzel Principal Economist Econosystems Menlo Park, California

  2. Despite Domestic Outmigration, 6-County population continues to grow: www.Econosystems.com SOURCE: California Department of Finance.

  3. www.Econosystems.com

  4. Total 7-County Employment Fell from 3.2 million in 2000 to 2.7 million in 2010: www.Econosystems.com

  5. January through March, 2011 (latest data available): www.Econosystems.com

  6. www.Econosystems.com

  7. www.Econosystems.com

  8. Office Vacancy Rates will remain high until employment growth resumes: www.Econosystems.com

  9. January through March, 2011 (latest data available): www.Econosystems.com

  10. Who’s Growing? • Growth in the “Information” industry includes: • Social networking: • Facebook, Twitter are local companies • Network externalities ensure near-monopoly status • Internet games/gaming • Zynga: Farmville is a hot Facebook game, played by more than 80 million people in 2010. • EA (formerly Electronic Arts) is no. 1 game publisher in Western World • Increased earnings per share from $0.07 1Q2010 to $0.25 1Q2011. www.Econosystems.com

  11. Other trends: • Mobile gourmet • Regional government services expand, as individual city services merge. • Alternative energy expands to meet Governor Brown’s recent executive order • “all retail sellers of electricity shall serve 33 percent of their load with renewable energy by 2020” • But manufacturers of solar equipment face stiff overseas competition. • Access to rare earth minerals will be flash point for industry until process for recycling of rare earths is established. • A regional housing recovery is still ~2 years away. www.Econosystems.com

  12. Government cutbacks into the future: • Tax revolt continues, leaving state and local governments strapped for cash. • Cutting of services will continue • World class higher education institutions at risk • Performance of K-12 educational system will decline as investment in primary education declines. • Further strains the CSU system, which already has 55% of enrolled students deficient in math, reading, or both skills. • Consolidation at the CSUs has begun. • Closing campuses? www.Econosystems.com

  13. The bright side: • The SF Peninsula remains HQ to most VC firms • Received 42% of nation’s Venture Capital in Q1-2011. • $2.5 billion, primarily in software & industrial/energy • Apartment rents recovered in 2009. • Population continues to grow. • The best news: Employment in business services has recovered, the largest and a good paying industry in the S.F. Bay Area. • Two-thirds of CEOs surveyed by the Silicon Valley Leadership Group said they added employees in 2010, and 55% see better growth for their companies in 2011. • Uneven national recovery, income growth will continue. • The San Francisco Peninsula will continue to see growth. www.Econosystems.com

  14. Thank you. • Anne Ramstetter Wenzel • www.Econosystems.com • awenzel@econosystems.com • Follow me on twitter:  http://twitter.com/annewenzelPhone: 650-233-9613 www.Econosystems.com

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