Solano County’s economic outlook remains uncertain due to fluctuating market conditions and federal tariff policies, according to an annual report presented to the Board of Supervisors. Economist Robert Eyler, who developed an index tracking economic and community progress, highlighted key trends, including a recovered labor force locally and statewide. However, Northern California is lagging behind the national job growth rate.
Eyler warned that potential tariffs or sales taxes could disproportionately affect small businesses, which are vital to Solano County’s employment in sectors like healthcare, food service, and construction. He projected a 3.5% increase in transportation and warehousing jobs by 2030 but noted minimal growth in retail jobs.
The report also revealed that BIPOC households experienced a decline in median income over the past five years, though poverty rates remained stable and homeownership increased among communities of color. Housing forecasts predict a 3.2% decrease in median home prices in Solano County and a 1.5% drop statewide over the next year, though Eyler cautioned that these figures have a 3% margin of error.
Population growth is expected due to Solano County’s strategic location between the Bay Area and Sacramento. Eyler encouraged cities like Vacaville and Dixon to foster biotech partnerships with institutions like UC Davis, while also noting the impending closure of Benicia’s refinery. He emphasized the importance of remaining competitive along the I-80 corridor amid federal policy changes.
— news from The North Bay Business Journal
— News Original —
Solano County’s economic outlook remains uncertain
Solano County ‘s economic outlook remains clouded by uncertainty, driven by volatile market forces and federal tariff policies, according to an annual economic report delivered to the Board of Supervisors on Tuesday. Economist Robert Eyler, who developed an index on economic and community progress, outlined key trends, including a recovered labor force both locally and statewide, but noted that Northern California ‘s economy is not generating jobs at the same rate as the rest of the country. Eyler warned that potential new tariffs or sales taxes would act as regressive costs for small businesses, an area he identified as crucial to Solano County ‘s employment base, especially in healthcare, food service, and construction sectors. “When you think about economic development concerns, it ‘s usually small business concerns,” Eyler said. Solano County will see a 3.5% spike in transportation and warehousing jobs between this year and 2030, he said, but retail jobs will grow by only about one-tenth of 1%. Eyler said that these two factors may be correlated. Over the last five years, Eyler said, BIPOC households have lost median household income, but poverty rates have remained relatively stable and home ownership has increased in communities of color. Although interest rates have come down a little bit, new builds remain very low in the real estate market. Solano County has bucked that regional trend, he said, but he is monitoring it closely. Housing forecasts show that the median home price will decrease by 3.2% in Solano County and by 1.5% in California over the coming year. However, Eyler said that the forecast has about a 3% margin of error, meaning that home prices may stay flat. “You will not see a massive contraction in housing unless there is some overt change in labor markets,” he said. In FY 23, Eyler said, 1670 building permits were pulled for housing units in Solano County. Regionally, he said, most of those permits are for single-family homes. Population growth is expected for Solano County by the state Department of Finance, Eyler said, given its proximity to both the core Bay Area and the Sacramento region. Eyler said that Vacaville and Dixon should continue to nurture biotech partnerships, particularly with UC Davis. Manufacturing and new federal policies offer opportunities, he said, and the community should work to remain competitive with others along the I-80 corridor. He also noted that Benicia will see changes with the closure of the refinery there. Supervisor John Vasquez noted advancements in agricultural technology, particularly vertical and indoor farms in the Dixon area. Eyler agreed that Solano County has room to grow in the agricultural technology space. “You gotta think about those assets that you have and sell those,” Eyler said. Supervisor Monica Brown expressed concern about the loss of federal funding. Eyler said Solano will still be relatively affordable compared to other counties around it and have proximity to Bay Area and Sacramento jobs. “It ‘s not going away, that ‘s the dismal science news of it,” he said of economic uncertainty. If tariffs stick at current levels, Eyler said, manufacturing may pick up slack from imports five or ten years from now. That said, consumers will feel the burn long before any upside is seen. “It is intellectually problematic to think that tariffs are not going to create upward pressure on prices,” he said. Supervisor Cassandra James asked if Eyler prepared data on areas of concentrated economic hardship. James also highlighted that communities of color are moving here from other Bay Area counties as they get priced out. “If you ‘re going to focus resources, you want to know where those hot spots are,” he said.