As the nation’s economic recovery continues at a slow pace, San Francisco is a bright spot in region, the state and beyond. Recent indicators are encouraging, showing strong growth in key industries which are in turn creating jobs and moving the economy forward. This is good news, and we can keep the momentum going well into the future.
One critical measure of the city’s economic health is tourism, which generated more than $8.5 billion in spending last year. Thankfully, the 2011 summer tourist season did not disappoint. Activity at San Francisco International Airport hit a spring high with domestic air travel increasing 5 percent year-over-year. International flights have also seen a 6.5 percent year-to-date increase. This influx of travelers has given a needed boost to local hotels, restaurants, retail and other businesses. According to the City Controller, hotel occupancy, room rates and retail activity are all following positive trends.
The rapid growth of the high-tech sector is also giving a lift to the city’s economy. Commercial management firm Jones Lang LaSalle estimates the number of high-tech jobs in San Francisco will soon surpass the record of 34,000 set in 2000, accounting for 1 in 5 office jobs. Such rapid growth is fueling office occupancy, particularly South of Market. City-wide, vacancy is down to 13.6 percent in the first half of the year. Residential vacancy rates are also declining.
Although much of this success is driven by the high-tech sector, there is more cause for optimism ahead according to Dennis Conaghan, Executive Director of the San Francisco Center for Economic Development (SFCED). The recent Pow Wow event –which brought international tour operators to the city – will bring an estimated $350 million in international travel business to San Francisco over the next two to four years. The $56 million Moscone Center upgrade and renovation will be complete next July, helping to attract lucrative future convention business. The America’s Cup could draw up to 5 million spectators and generate more than $1.2 billion of new economic activity during the multi-year series of sailing regattas.
San Francisco is fortunate to have companies like Salesforce.com, Zynga and Twitter. These companies are actively planning for growth, adding new employees, expanding office space and deepening their engagement with the community. Saleforce.com announced plans to build a 14-acre campus in Mission Bay that could eventually house 8,000 workers. Thanks to the recently-passed Mid-Market Tax Exemption, Twitter will move into the San Francisco Mart building and may to add up to 2,600 jobs over the next six years. Zynga, and other high-tech companies, are also expanding.
Other current and planned construction will give further boost to the local economy. And while we have a long way to go to get back to pre-recession levels, construction cranes still dot the Mission Bay landscape and other areas. The city has broken ground on a new General Hospital. New land use approvals have been given to Hunter’s Point, Treasure Island and Parkmerced.
Economic growth does not happen by accident. San Francisco should be proud of the investments we’ve made and the good public policies we have adopted that have allowed our city to become a bright spot in economic recovery. The wind is in our sails. Now, we must keep the momentum going.
The Chamber will be discussing the city’s economic landscape and growth horizon at next Wednesday’s Forecast SF. Read more and register.
Read more and register: https://sfchamber.com/eventsprogs/events/forecast_sf/index.html