Sonoma County economy finally begins to grow

After shedding 20,000 jobs over the last three years, Sonoma County's economy should finally return to growth this year, according to a new forecast.

"The fundamentals are getting better," Steve Cochrane, managing director for Moody's Analytics, told business leaders Wednesday at a Santa Rosa conference.

Sonoma County will add 3,000 jobs this year, with similar growth in 2012 and 2013, according to his forecast.

The recession wiped out more than 1 out of 10 jobs in Sonoma County since the economy slowed in 2007. But a recovery is now underway, Cochrane said, driven by surging corporate profits, a decline in household debt, increased lending and a foreseeable end to the housing crisis.

"It feels like there is a palpable change," he said. "We are coming out of it. The turnaround may be here to stay."

While most signs point to an improving economy, risks remain, Cochrane told about 375 people attending the annual Sonoma County Economic Outlook Conference at Hyatt Vineyard Creek Hotel.

High fuel costs, government spending cuts, global instability and home foreclosures continue to threaten the recovery, he said.

The local housing market hasn't hit bottom, but it's close, Cochrane said.

"We'll see prices struggle through the second half of this year," he said. "But I think we're toward the end of the downturn."

The real estate market should stabilize next year, Cochrane said. There's pent-up demand for housing, and affordability is at a record high, he said.

Already, Sonoma County is outpacing the rest of California and the nation in job creation and income growth, according to the Moody's report.

The county's technology, wine and tourism industries give it exposure to growing international markets, and they're primed for expansion, Cochrane said.

"The global economy is very meaningful here," he said.

It also has a demographic advantage, with a population growing faster than the state's.

Sonoma County's unemployment, which has been running a full point higher than the U.S. rate, should fall by the middle of next year, Cochrane said. It has remained stuck above 10 percent for 20 of the last 24 months, dipping into single digits in April and May.

Last June, Cochrane forecast a Sonoma County recovery starting this year. But he since has trimmed his estimates, saying job growth will average about 2 percent a year through 2013.

Meanwhile, the county's industrial output should grow even faster, averaging 3 percent each year over the next five years, according to the Moody's report.

The conference was organized by the county's Economic Development Board.

"There's no bigger priority right now than getting Sonoma County back to work," county Supervisor Mike McGuire said.