Employment Rebounding Slowly in San Diego

While the economy and job market are slowly recovering in San Diego, they are not rebounding quick enough to absorb the local unemployment rate. The California Employment Development Department will release June’s unemployment numbers on Friday, and many would welcome improvements.

In May, San Diego’s unemployment numbers hit 9.6 percent, compared to 9.1 percent nationally and a staggering 11.7 percent in California, according to EDD.

“Our unemployment rate is and will continue to be slightly better than the state of California and right around the national rate, which is not great,” said Mark Cafferty, president and CEO of San Diego Workforce Partnership, an organization that funds job training programs throughout San Diego County. “We do know that we are adding jobs locally but we are adding them at a much slower pace than we would like to see.”

The University of San Diego’s latest Index of Leading Economic Indicators for San Diego County shows slow growth across nearly every economic indicator. It reported positive growth for the local economy overall in the past two years, but it has been extremely slow moving. The monthly report has charted 26 consecutive months without a decline.

The USD index reported that initial claims for unemployment insurance continue to fall in San Diego and the hiring side of the market is also improving. Help-wanted advertising was up in May and has been up for five months in a row.

Cafferty confirmed San Diego is seeing less downsizing, fewer layoffs and more hiring then last year. He said banking giant Chase is expected to bring on an additional 400 employees, and Escondido-based Stone Brewing Co. another 200 employees locally in the next year.

In addition, employment in the technology sector is on the rise in San Diego, according to a recent report released by CONNECT. The nonprofit organization dedicated to creating and sustaining the growth of technology and life science business in San Diego also reported that the number of tech start-ups in the first quarter of 2011 doubled to 70 companies over the same quarter last year.

San Diego tech start-ups created more than 130 new jobs in Q1; and created more than 930 jobs all of last year. The tech sector, including software, communications, life sciences and defense, represents 11 percent of all jobs in San Diego County.

Henry DeVries, assistant dean for external affairs at and author of Closing America’s Job Gap, said San Diego is still a hotbed of innovation.

“San Diego’s robust innovation economy creates and will continue to create good jobs,” said DeVries. “However, the skills these jobs require are increasingly in short supply. A big part of the solution to the jobless recovery is to better align our education and training programs with the technical needs of today’s employers to be globally competitive.”

Numerous economic indicators in the tech industry are extremely positive. The number of patents granted increased, company merger and acquisition activity nearly tripled, and research grant funding to research institutes, universities and innovation companies hit $300 million in the first quarter of 2011.

However, not all of San Diego’s statistics point up. VC investment in San Diego companies fell by more than half to $100 million in the first quarter compared to the $218 million in the fourth quarter 2010, according to CONNECT’s most-recent Innovation Report released earlier this month.

We will just have to wait to see Friday’s Employment Development Department report to see how we fared.