The technology-heavy San Francisco Bay Area almost single-handedly propped up California’s otherwise lethargic economic performance in 2014, a new report from the federal Bureau of Economic Analysis indicates.
The San Jose-centered Silicon Valley saw a 6.7 percent increase in economic output last year, the highest growth rate recorded in the Western states and the 9th highest among the nation’s 381 Metropolitan Statistical Areas (MSAs).
Only a few, relatively small MSAs involved in the oil and gas boom in other states, principally Texas, outpaced Silicon Valley’s expansion last year – and that was before the petroleum sector saw setbacks from declining prices this year.
The San Jose region was joined by other Bay Area MSAs in recording economic gains above the 2.3 percent national expansion in economic output and California’s overall 2.8 percent increase.
The San Francisco-Oakland region (San Francisco, Alameda, San Mateo, Contra Costa and Marin counties) saw a 5.2 percent expansion, followed by Napa at 4 percent and Santa Rosa at 3.3 percent.
Outside of the Bay Area, only the Riverside-San Bernardino MSA scored better than the state as a whole at 2.9 percent. The Los Angeles-Long-Beach-Anaheim MSA came in at 2.3 percent, barely matching the national expansion, meaning that without the Bay Area’s gains, the state as a whole would have fallen behind the nation.
At the other end of the scale, three small MSAs in the San Joaquin Valley (Visalia-Porterville, Madera and Merced) saw declines while the state’s other MSAs fell somewhere in between, but all lower than the national benchmark.
Notwithstanding its lackluster performance, the Los Angeles-centered MSA retained its standing as the nation’s second largest economic region, behind the New York City metropolitan area.
The Los Angeles region generated $867 billion in economic activity last year ($798 billion after inflation adjustment), 37 percent of the state’s economic output, according to an analysis by the Legislative Analyst’s Office. The San Francisco-Oakland MSA had the nation’s seventh largest regional economy at $412 billion, and San Jose was 19th at $214 billion.
Together, those two Bay Area MSA’s generated 27 percent of the state’s output.