The North Bay's economy is slowly recovering, but two key elements still are missing, a Sonoma State University economist told business and government leaders Thursday.
Job growth and business investment are needed before the economy truly bounces back, said Robert Eyler, who heads the university's Center for Regional Economic Analysis.
"There's still a lot of uncertainty out there," he said. "That's what's keeping us from growing."
The recession likely ended in the North Bay a year ago, Eyler said, but the recovery has been slow.
Don't expect the labor market to improve before mid-year, Eyler said Thursday at the annual Economic Outlook Conference at the Sheraton Sonoma County hotel in Petaluma. And job growth could remain sluggish if the private and public sectors don't act to spur hiring.
Meanwhile, large banks are sitting on cash that could be used to jump-start the economy, he said. Banks are waiting for the housing market to recover.
"We need to get that money moving," Eyler said.
He pointed to some encouraging signs.
Personal income, wages and salaries all have been rising in California since the state's economy struck bottom in 2009, Eyler said.
The North Bay's leading indicators — including real estate defaults, building permits, new jobless claims, farm prices and help-wanted ads — were positive last year.
The North Bay also stands to gain from a rebound in high technology, tourism and agriculture. Over the long term, the region's real estate market will perform better than most of California, he said.
But state and national economic trends will affect any regional recovery, according to Eyler. California is healing more slowly than the rest of the country, mostly because of the severity of its housing crash.
California also faces budget and pension problems that could stall growth, he said.
Meanwhile, the U.S. recovery might be hurt by unrest in the Middle East, debt problems in Europe, competition from Asia and rising world food prices, Eyler said.
The North Bay also faces global competition, and it needs to leverage local economic development efforts, he said. Programs such as the North Bay Innovation Hub, a startup incubator at Sonoma Mountain Village in Rohnert Park, create technology, develop entrepreneurs, promote investment and provide a source of future jobs, Eyler said.
Sonoma State is partnering with the iHub on technology projects.
Without innovation, the economy could see another jobless recovery, he said. Sonoma County's unemployment rate still is hovering around 10 percent, and no one can say when it will go down, according to Eyler.
"We still don't know if the job market is going to fully recover," he said.
The conference was co-sponsored by the university and North Bay Business Journal.