On the housing front, California is under-supplied with new homes in the wake of a recession that prompted homebuilders to halt or pull back on production. Now, construction permits are on the rise, a trend that is expected to continue over the next three yearsyears, according to the report. A growing economy, rising household formations, low mortgage rates and pent-up demand is helping single-family housing production to rev up.
The technology, manufacturing, real estate, logistics and construction sectors have all contributed to the state's positive growth. Of these, the construction industry is a bellwether for the broader economy due to its overall size and interdependence with the other industries.
Below are the key findings from the October 2014 TriNet SMBeat Report:
- With the growing real estate markets and investor activity tying to California's construction sector growth, the financial services sector appears to be on a path of stable recovery. In 2013, the financial services sector grew at an annual rate of 7%. So far in the ten months of 2014, the financial services sector has nearly doubled the annual growth at 13%.
- Net job growth in financial services reached 1.57% in October, a slight improvement from last month's 1.54% net job growth. Texas, Florida, and New York lead this sector, with 1.65%, 1.60% and 1.57% net job growth, respectively. California was substantially lower, with only 0.63% net job growth.
- In California, the construction sector is forecasted to have added 3,180 jobs in October, contributing to a total job growth of 10,410 during the next three months of 2014.
Nationally, the National Association of Home Builders is forecasting 991,000 total housing starts in 2014, up 6.6% from 930,000 units last year. Single-family production is expected to rise 2.5% this year to 637,000 units, increase an additional 26% next year to 802,000 and reach 1.1 million in 2016.
California's economy has bounced back after a slow start to 2014 and is slated to add more than 10,000 construction jobs by the end of the year, according to a TriNet’s October analysis of small to medium-sized business (SMB) employment and human capital economic indicators.