The City’s economy is beginning to show signs of flagging after months of resisting the nation’s general economic slowdown, according to a monthly economic report released Monday.
Unemployment is up, median home-sales prices are down, and even tourism is taking a hit, with hotel occupancy rates lower than last year, according to the report compiled by the San Francisco Controller’s Office.
While San Francisco’s unemployment rate is still one of the lowest in California, according to the report, it has risen by 0.4 percent from May to June, and 0.9 percent from June 2007 to June 2008. There were 23,700 unemployed in San Francisco in June, up nearly 25 percent from the same month last year.
Michael Cohen, director of the Mayor’s Office of Economic and Workforce Development, said the 25 percent increase was misleading because the increase in the unemployment percentage was actually less than a full percentage point.
“We are clearly in the midst of a significant economic downturn, but I believe The City is weathering this storm better than any other urban economy,” he said.
Many in San Francisco business expressed surprise at the late-breaking report. A San Francisco Convention and Visitors Bureau report released in May said 2007 tourism numbers were some of the strongest on record.
The tourism industry was helped out in 2007 by a strong convention year at Moscone Center and Major League Baseball’s All-Star Game festivities at AT&T Park in July. But the report indicated that more visitors are bypassing expensive San Francisco hotels and staying on the Peninsula.
The Controller’s Office reported a nearly 4 percent drop in hotel occupancy rates in May 2008 compared with May 2007.
“We’ve heard anecdotally that hotels are raising their rates too much during conventions,” said John Grubb, spokesman for the Bay Area Council, a regional business organization. “We’ve heard of people paying a quarter of the price in Foster City, and they’re closer to Silicon Valley in the bargain.”
Business confidence in the nine-county Bay Area has been declining significantly, he said.
“We have seen decreases in the commercial real estate market,” said Dennis Conaghan, executive director for the Center for Economic Development at the San Francisco Chamber of Commerce. “But we felt the market was more or less flat.”