The real estate slowdown in 2007 was felt in several industries, but most dramatically in construction, which sustained a net loss of 4,700 jobs through October. That just about matched the net loss of 5,000 construction jobs for all of 2006, but there were other parts of the economy feeling the pinch from the downturn.
The financial services sector shrunk by 1,500 jobs during the year, and an additional 500 jobs were lost in the retail car dealer and parts division, according to state employment reports.
Still, San Diego County’s unemployment rate held steady at 4.8 percent for three straight months, through October, according to the most recent data available by last week’s deadline.
That was below California’s overall rate of 5.4 percent, yet above the national unemployment rate of 4.4 percent for the same time.
“We used to talk about 6 percent as full employment, so at 4.8 percent we’re still not doing badly, just not as good as we’ve done in the past,” said Larry Fitch, president of the San Diego Workforce Partnership, a regional job training agency.
Helping to offset the decline in the construction and mortgage industries was a net gain of 4,000 jobs in health care, which continues to create more jobs than there are available workers.
“We still have a huge shortage of nurses, and in other technical jobs within health care,” Fitch said. “The pressure on the health care sector will be tremendous over the next two to five years as the wave of baby boomers retires from their jobs, and more of these same boomers seek out health services and put more demand on the system.”
103,000 Manufacturing Employees
And while manufacturing continues to shed jobs, a net of 300 through October, the sector remains among the largest in the economy, with some 103,000 people employed.
One of the manufacturers feeling robust growth was Nassco, a unit of General Dynamics Corp. of Virginia. Short for National Steel and Shipbuilding Co., Nassco is the sole major shipbuilder on the West Coast.
Thanks to an ongoing contract with the U.S. Navy that could be worth as much as $2.5 billion for giant cargo-ammunition ships, and another major contract with a commercial shipper, the Nassco yard has been busier than ever.
This year, the company delivered three new cargo-ammunition ships to the Navy, and is working on four others. It also began work on the first of nine tankers, a deal worth $1 billion, for U.S. Shipping Partners L.P. of New Jersey.
Nassco is closing in on 4,700 employees, an increase of about 100 from the prior year, says spokesman Karl Johnson. Next door to Nassco on San Diego Bay is BAE Systems, which builds and repairs ships and employs about 1,000 workers here. BAE is a unit of London-based BAE Systems plc.
Another sector that continues to generate consistent growth is high-tech, including everything from small software startups to mammoth public companies such as Qualcomm Inc. and SAIC, which is also known as Science Applications International Corp.
Qualcomm reported net income of $3.3 billion on revenue of $8.87 billion for its fiscal year ended Sept. 30. Net earnings grew 34 percent from the prior year, while sales were up 18 percent. This month, SAIC reported net income of $105 million on revenue of $2.37 billion in the third quarter ending Oct. 31. Revenue grew 14 percent from the $2.08 billion in the year-ago quarter. Net income for that quarter was $98 million.
For those with the right skills, this time is akin to what was happening in the go-go days of the late 1990s and the dot-com bubble.
“This has been our biggest year ever,” said Kanani Moser, director of the technology division for TriStaff Group, a San Diego staffing firm. “We’re doing business with a lot of different technology companies. It’s not just wireless and biotech; there’s a wide range of technology companies.”
Most of the people placed through TriStaff were already employed, showing the market for skilled personnel continues to be tight, and forcing some firms to offer signing bonuses along with fatter salaries to lure away top talent.
Hyder Rabbani, vice president of sales for Brickfish, a San Diego Internet marketing company, says the company doubled its staff in the past year and now employs nearly 100 people. “The new jobs (being created) are across the board, everything from engineering, marketing, sales, development, creative,” he said.
Brickfish provides online marketing services to businesses making use of the higher capabilities of the Internet called Web 2.0.
Service-oriented businesses dominate the local economy, but some parts of this sector included many higher paying jobs. For example, a subset called professional, scientific and technical services increased by 4,000 jobs through October. The generally lower paying leisure hospitality sub-sector, which includes jobs in hotels, restaurants and bars, gained some 3,200 jobs.
Overall, the net gain in jobs through October was about 13,000, which wasn’t bad, but far off what some job analysts were expecting.
While negative news pervaded in the final months of 2007, the news didn’t seem anything like a full-fledged recession with widespread layoffs. A quarterly survey of employers done for Milwaukee-based Manpower Inc. released in early December showed 51 percent planned to maintain current staffing levels for the first quarter, while 40 percent planned to expand current staff. Only 5 percent planned to reduce its staff.
“Employers expect similar hiring activity as compared to one year ago, when 43 percent of companies surveyed planned to raise staff levels and 9 percent expected to trim payrolls,” said Phil Blair, president of Manpower San Diego.
Several observers noted that while ill winds are clearly blowing through businesses affected by the housing slump, the area’s economy isn’t entirely dependent on real estate.
“Long term, San Diego is in good shape because the folks who were around during the last recession did a pretty good job of diversifying the economy here,” said the Workforce Partnership’s Fitch. “When we exit next year, I wouldn’t be surprised if we see the same unemployment rate.”