Solano business group gets economic forecast
August 16 2019Daily Republic August 16, 2019
By Ian Thompson
VACAVILLE — Local business leaders got a snapshot Thursday morning of the area’s economic future, opportunities and challenges.
Solano County will continue to see slow job growth, “positive, but not robust,” Robert Eyler told a full room of local economic leaders at the Travis Credit Union.
Eyler, head of the Sonoma-based research and consulting firm Economic Forensics & Analytics, laid out both challenges and opportunities the county faces before a breakfast meeting of the Solano Economic Development Corporation.
The county’s opportunities are that it has the land to allow it to expand its business infrastructure and develop its workforce, something the San Francisco Bay Area is finding harder to do, Eyler said.
For challenges, it is dealing with residents commuting to work elsewhere, high construction costs and available labor shortage.
Residents are leaving for other areas to pursue better jobs in more affordable areas, while others are moving here from the higher-priced San Francisco Bay Area for relative affordability, Eyler said.
The task for local leaders will be to at least balance that inflow with those people who are moving out, Eyler said.
Looking at the nationwide picture, he noted that we have entered uncertain economic times.
“We don’t like the uncertainty,” Eyler said of how investors and business feels about the present national economy.
He said business leaders need to expect some volatility in the market and that indicators show there won’t likely be a recession in 2020, but maybe in 2021. It will likely a mild recession due to mild growth, he said, adding the warning that some parts of the economy are not yet recession-ready.
California remains in a leadership position economically, but housing remains a major issue as markets lag a bit, Eyler said.
The current tariff wars will affect inflation and will have a slow, creeping effect on lower-income workers, he said.
“Its effect will leak into Solano County,” Eyler said, particularly the agriculture industry, one of the more shocked parts being the wine business.
When asked if a large number of U.S. jobs will come back because of the tariffs, Eyler said “that is not going to happen.” Eyler chalked up talk of that to campaign rhetoric.
Housing construction has been only slowly rising, particularly outside of urban areas and that isn’t expected to change soon, he said.
The rising cost of living will continue to pressure some continued rise in housing costs. And that will affect how successful Solano County will be in attracting and retaining workers.
One thing that local leaders will need to keep an eye on are efforts at the state level to take a bigger role in housing construction, cutting back city and county control of that issue.
Solano Economic Development Corporation President and CEO Robert Burris talked about the organization’s plans to improve its business recruitment efforts not only across the country, but internationally.
“We are not just about growth, but the types of job that we want to create,” Burris said of the economic development corporation’s Moving Solano Forward effort.
Part of that effort is expanding or bringing in more manufacturing and research and development business to the county.
One of the economic development corporation’s recently launched projects is the Solano Economic Research Center, which will not only provide ahead-of-the-curve economic research to local and regional businesses and governments, but also bring in income from out-of-the-area customers.
“We already have five projects underway,” Burris said of the center, which will offer everything from market strategy analysis to economic impact studies.
Burris pointed out that all many outside business owners see of Solano County are the highways as they travel between San Francisco and Sacramento.
“We want to show them more,” Burris said of elevating the county’s visibility to potential economic investors.