SAN JOSE, Calif. -- The job market in Silicon Valley grew by 2.2 percent during 2018, the slowest pace of employment growth since the recession ended a decade ago, according to a new report released Wednesday.
The employment gains in 2018 also marked a noticeable downshift from the pace of growth in 2017, when Silicon Valley's job market grew by 3 percent, the report from Joint Venture Silicon Valley said. The report defined Silicon Valley as the California counties of Santa Clara, Alameda and San Mateo, and San Francisco and the Scotts Valley area of Santa Cruz County.
The ongoing job gains, year after year, have persisted in the face of head winds from skyrocketing home prices and brutal commutes. The steady job growth is remarkable, according to Russell Hancock, president of Joint Venture Silicon Valley.
"Silicon Valley is like one of those black bumblebees with the really big body and really tiny wings," Hancock said. "Engineers say it just can't fly, yet somehow it does continue to fly. It defies logic and it defies reason."
In 2018, Silicon Valley added 35,600 jobs, compared with a gain of 47,300 in 2017, the Joint Venture study determined.
Santa Clara County became an even more powerful economic engine for the Silicon Valley region in 2018 than was the case the year before.
The report found that Santa Clara County produced 81 percent -- or 28,800 -- of the jobs that were added in 2018. That's up sharply from 2017, when Santa Clara County generated 64 percent, or 30,300 of the jobs that were added that year.
"The technology industry is really driving the job growth throughout the region," said Rachel Massaro, vice president and senior researcher with Joint Venture Silicon Valley. "The tech industry added 22,900 jobs" in 2018.
Plus, within the tech sector itself, the growth is being dominated by just a few technology titans. Google accounted for about 35 percent of the tech industry job growth; Facebook produced 23 percent of the increase in tech jobs; Apple was around 30 percent; and Salesforce produced 10 percent of the tech industry job gains, according to Massaro's research.
That hiring boom translates into a relentless hunt for office buildings and land where these tech titans can expand.
"Big tech companies are dominating the office and research and development space," Massaro said. "They are not only increasing their head count, they are widening their footprints."
As a group, Google, Apple, Facebook, LinkedIn and Amazon now lease a combined 18 percent of the 242 million square feet of office and research space that exists in Silicon Valley. That works out to a head-spinning 43.6 million square feet of office or research space that the five tech titans lease, combined.
"These companies are becoming more diverse in their products and services," Massaro said. "They are doing a lot of hiring and they need a lot of space because they are doing a lot more things."
One warning flag that has begun to flutter over the region's super-heated economy: For better or worse, more people are now leaving Silicon Valley than are arriving in the area, the study found.
In 2018, Silicon Valley suffered a net migration outflow of 22,300, the report stated.
Despite the ongoing housing crisis, Hancock is heartened by what, in his view, appears to be a dramatic change in attempting to tackle the problem.
"For the first time we are talking about housing in a very serious way," Hancock said. "People don't call it the housing problem any more. They call it the housing crisis. And we now have a governor who is very aggressive on the housing issue."
SundayMonday Business on 02/17/2019