Bay Area job growth continued strong in 2015 and the region has added more than 550,000 jobs since 2010.
Regional job growth has been led by technology with strong gains in health care and hospitality, mainly eating and drinking establishments.
The Bay Area jobs recovery is being led by Professional and Business Services, Educational and Health Care Services and Leisure and Hospitality with contributions from the Information and Construction sectors. Technology sectors dominate the growth in Information and Professional and Business Services while health care and eating and drinking establishments dominate the growth in the other two leading sectors.
It is worth noting that technology in the Bay Area is a very diverse sector with the names Apple, eBay, Facebook, Google, and LinkedIn bringing to mind a diverse set of goods and services. So technology in our region is unlike auto production in Detroit 40 years ago or oil and gas in North Dakota, Oklahoma and Texas today in terms of single sector risks.
The impact of the Internet is seen is the slow growth in retail trade and finance where more and more activities are done online. The recovery while very strong has left the farm, construction, manufacturing, wholesale trade, finance and government sectors with fewer jobs than in 2007 although many sectors are now in growth mode.
Some of the largest long-term transitions in industry structure are shown below. In 1990 there were more than two jobs in Finance for every job in the Information sector. Soon Information will pass Finance in job size, in part the result of innovations in the Information sector.
In 1990 there were more jobs in Manufacturing than in Professional and Business Services. In 2015 there were more than two jobs in Professional and Business Services for every Manufacturing job. It is important to note that while jobs have declined manufacturing output has increased as a result of very strong productivity gains and also to remember than manufacturing jobs in China and around the world are declining for the same reason.
Below we see another major transition in the region’s industry structure.
In 1990 there were more jobs in Retail Trade than in Educational and Health Services. Since then retail jobs have hardly changed while jobs Educational and Health Services (mainly in health care) have nearly doubled.
Most of these structural changes will continue. Some sectors will rebound to new highs, particularly construction if we build the needed housing and infrastructure, as well as government and wholesale trade jobs. But the manufacturing, retail and finance sectors will likely continue to see restrained if any job growth from productivity and changing ways we consumers and businesses do business.