San Francisco Economic Update: June 2017 Ted Egan, Ph.D. Chief - - PowerPoint PPT Presentation

San Francisco Economic Update: June 2017

Ted Egan, Ph.D. Chief Economist, Controller’s Office June 14th, 2017

San Francisco’s Seasonally-Adjusted Unemployment is Now Below 3%, As Low as It Has Been Since 1999

Controller's Office ● Office of Economic Analysis City and County of San Francisco

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0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Apr-2010 Jun-2010 Aug-2010 Oct-2010 Dec-2010 Feb-2011 Apr-2011 Jun-2011 Aug-2011 Oct-2011 Dec-2011 Feb-2012 Apr-2012 Jun-2012 Aug-2012 Oct-2012 Dec-2012 Feb-2013 Apr-2013 Jun-2013 Aug-2013 Oct-2013 Dec-2013 Feb-2014 Apr-2014 Jun-2014 Aug-2014 Oct-2014 Dec-2014 Feb-2015 Apr-2015 Jun-2015 Aug-2015 Oct-2015 Dec-2015 Feb-2016 Apr-2016 June-2016 Aug-2016 Oct-2016 Dec-2016 Feb-2017 Apr-2017

San Francisco Unemployment Rate, April 2010 - April 2017 (Seasonally-Adjusted)

Source: EDD

In 2016, San Francisco’s Job Growth Continued its Torrid Pace of Job Growth

Controller's Office ● Office of Economic Analysis City and County of San Francisco

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100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 2010 2011 2012 2013 2014 2015 2016

Wage and Salary Jobs in San Francisco, 2010-2016

Average 26,000 jobs per year

Source: BLS QCEW

In 2016, Nearly Every Sector of the City’s Economy Continued to Add Jobs

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• 1,000

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Tech Construction Manufacturing Trade, transportation, and utilities Information (non-Tech) Financial activities Professional and business services (non-Tech) Education and health services Leisure and hospitality Other services

San Francisco Employment Change by Industry, 2015 to 2016

Source: BLW QCEW

Tech’s Growing Importance in San Francisco’s Labor Market

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0% 2% 4% 6% 8% 10% 12% 14% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Technology Industry Share of Private Sector Payroll and Employment in San Francisco, 1990-2016

Source: BLS QCEW

Monthly Growth Rate Data Shows a Notable Slowdown in Tech, and Total, Employment in the San Francisco-San Mateo Metro Division

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• 5.0%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17

Annual Growth Rate, Tech and Total Employment, San Francisco Metro Division, April 2010-April 2017

Tech job growth rate Private Non-Farm job growth rate

Source: EDD

Tech Employment in the Metro Division is Now 5,000 Below Last Year’s Peak

Controller's Office ● Office of Economic Analysis City and County of San Francisco

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90,000 95,000 100,000 105,000 110,000 115,000 120,000

Monthly Tech Employment, San Francisco Metro Division, April 2015-April 2017

Source: EDD

Tech Startup Activity Has Been Slowing Since 2013

Controller's Office ● Office of Economic Analysis City and County of San Francisco

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50 100 150 200 250 300 350 400

Active San Francisco Tech Companies (Founded Since 2001) By Year of Founding

Source: Crunchbase Only companies with more than $1M in funding

NASDAQ and Venture Capital Usually Move Together and Affect Our Tech Employment – But Now Moving in Different Directions

Controller's Office ● Office of Economic Analysis City and County of San Francisco

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50 75 100 125 150 175 200 225 250 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Trends in the NASDAQ-100, Bay Area Venture Capital Investment, and San Francisco Metro Division Tech Employment, 2011-17

NASDAQ-100 12ma Bay Area Venture Capital Investment 12ma SF MD Tech Employment

Source: EDD; PWCMoneytree; Yahoo! Finance

Trends in Housing Prices and Rents

Controller's Office ● Office of Economic Analysis City and County of San Francisco

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$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 2010-11 2011-01 2011-03 2011-05 2011-07 2011-09 2011-11 2012-01 2012-03 2012-05 2012-07 2012-09 2012-11 2013-01 2013-03 2013-05 2013-07 2013-09 2013-11 2014-01 2014-03 2014-05 2014-07 2014-09 2014-11 2015-01 2015-03 2015-05 2015-07 2015-09 2015-11 2016-01 2016-03 2016-05 2016-07 2016-09 2016-11 2017-01 2017-03

Monthly Asking Rent Home value

Median Housing Value, and Median Asking Rent, in San Francisco: November 2010 - April 2017

Median Home Value Median Monthly Asking Rent

Source: Zillow

Conclusions

• Through 2016, San Francisco has continued its unprecedented period of strong

employment growth, and unemployment well below “full employment”.

• The technology industry has undoubtedly been the primary driver of growth in the city

during the decade, and, despite slowing growth, has continued to lead growth through the end of last year.

• The slowdown in technology industry employment has been relatively rapid, though not

as rapid as the decline in 2001 and 2002, and actual employment losses in the industry have been modest to date.

• Additionally, the generally strong macro-economic environment, including renewed

strength in the stock market, is probably tied to the slight recovery in venture capital investment in 2017. We should not assume a sudden downturn is imminent.

• Nevertheless, given tech’s disproportionate role in the city’s economic story this decade,

any prolonged slowdown is likely to have significant effects on the broader local economy.

Controller's Office ● Office of Economic Analysis City and County of San Francisco

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