California economists are predicting that the regional economy will show signs of improvement over the next coming months. The emerging consensus is that job losses are expected to continue into first or second quarter of 2010, but gradually ease over the latter half of the year.  The pace of job growth is expected to strengthen through the first half of 2011. California’s comparative economic advantage, primarily its entrepreneurial and highly skilled and educated workforce, remains strong.  Also, California appears to be particularly well positioned to take advantage of Federal stimulus money and increased investment in energy efficient technologies.  


Putting Californians back to work is Governor Schwarzenegger’s top priority in 2010. By using funding from the Recovery Act to invest in the California Green Jobs Corps and the Allied Health Initiative, the Governor is preparing Californians to succeed in high-paying jobs in growing industries. The governor announced $10 million from the Recovery Act is now available through the Green Jobs Corps Grant competition. Launched in early March of 2009, the initial phase of the Governor's California Green Jobs Corps planned to place at least 1,000 at-risk youth ages 16 through 24 into green jobs over the next 20 months. California is projected to need tens of thousands of additional workers to fulfill current and future green occupations in various industries. It is estimated that upwards of 114,000 jobs will be created because of California's green policies.  Additionally up to $25.3 billion in additional annual revenue by the end of 2010.

The State’s recent budget package includes incentives for companies that are creating jobs for Californians and offers a new range of benefits for those companies willing to relocate to California. Also, a "new hire" tax incentive will target small businesses that create new California jobs in the coming two years. The package also provides for more public-private partnerships designed to create more jobs and build public work projects quicker and more cost-effectively. It also includes incentives to lure television and movie production back to California. Early estimates show that the stimulus plan has already created as many as 10,000 jobs.

Future Projection for California

According to the long-term projections of the Labor Market Information Division, California’s non-farm employment is projected to grow at an average annual rate of about 1.5 percent to reach 17.4 million by 2016. About 87 percent of all new non-farm jobs are expected to occur in the following industry sectors: 

• Professional and Business Services
• Government (includes public education)
• Health Care and Social Assistance
• Accommodation and Food Services
• Retail Trade
• Construction
• Wholesale Trade
• Educational Services (Private)

Professional, Scientific and Technical Services is the fastest growing sector and is expected to gain over 293,000 jobs, representing an annual growth rate of almost 2.9 percent, well over the annual average growth rate for all non-farm jobs.  The largest component within this sector is the Computer Systems Design and Related Services industry, which is anticipating growth of over 87,000 new jobs or about 4.7 percent per year based on annual averages. The quarterly Manpower Employment Outlook Survey notes that Professional & Business Services, where IT experts often count themselves, show the best hiring prospects among the 12 industry sectors surveyed.

Manufacturing, one of California’s largest industry sectors (1.5 million jobs), is expected to continue to decline. The national recession has produced a sharp pull-back in consumer spending, hence retail employment saw a decline of 2.8 percent in 2008, and in 2010 the sector is expected to lose another 4.1 percent of its jobs.

The bright spot for employment continues to be the health services sector, which added jobs at a rate of 3 percent in 2008 despite the start of the economic downturn.  The sector is expected to increase its job numbers by another 2.8 percent this year due to the increased demand from an aging population.  Health-related industries with the fastest annual growth rates include home health care services (at 4.5%), community care facilities for the elderly (at 4%), offices of other health practitioners (at 3.6%), and outpatient care centers (at 3.5%).  Anticipated federal funding to preserve and improve affordable healthcare may add to this sector’s growth.

Within the Government sector, local Government is expected to add the most new jobs, about 323,000 over the next several years. This is largely driven by gains in local education employment as the state population expands.

The Construction industry experienced exceptional growth over the past decade but the forecast calls for more modest growth as the mortgage crisis and economic slump continue to adversely affect the housing market and construction employment.  However, California’s share of the federal stimulus package may boost construction employment growth as funds are received to improve highways, roads, and bridges, and perform modernization and weatherization repairs.  In addition, the infrastructure bonds recently approved by California voters are expected to infuse funds into the construction industry, in particular the Heavy and Civil Engineering Construction sector.
 
Long-term projections pertaining to occupation reveal that the top 50 occupations with the most job openings are expected to generate over 3.3 million total job openings consisting of 1.3 million openings from new jobs and 2 million openings due to net replacements. Job opportunities in lower-skilled occupations include retail salespersons, cashiers, and waiters & waitresses.  Higher-skilled occupations such as nurses and elementary school teachers are also forecasted to have a substantial number of openings.

Policymakers are attempting to create laws that will stimulate the state’s economy and create more and more jobs in the months to come. As of September 15, 2009, one "job creator" bill (a proposal to facilitate the smooth recovery of the housing market) had been signed into law. Other bills identified as "job creators" that will improve the state’s job climate and stimulate economic recovery are on the way as well. It is true that California has been battered in the recession, but signs clearly point at a burgeoning rebound.