SF economy shows recovery signs, but still lags behind comparable cities

A range of economic indicators for San Francisco points to good news and a strong recovery from the effects of the omicron variant of Covid-19, according to a monthly report by the city Controller’s Office.

Good news came in the form of data from March on job creation, tourism, housing, office attendance and among other indicators, new business formation.

But San Francisco’s chief economist Ted Egan is being cautiously realistic about the state of the economy.

Egan said:

“I don’t think the good economic news in our March report changes the fact that San Francisco still has a long way to go in its economic recovery. Our job creation, tourism, and housing are all moving in the right direction. But they are still well below where we were before the pandemic, and far behind where comparable cities are.”

The San Francisco metro area added 12,300 jobs in February, more than half of which were in the leisure and hospitality sector, a sector hit hard by the pandemic. Unemployment was at 3 percent, the lowest rate for the pandemic era.

The number of permitted housing units also saw significant increases. San Francisco permitted about 325 units in January, up from fewer than 200 in October and fewer than 50 in November 2020.

A few new businesses opened at the beginning of the year in the neighborhood services classification, which includes equipment repair, dry cleaning and among many other things, pet care services.

Local travel is recovering but residents are still cautious about getting out, according to the controller’s office. San Francisco weekly hotel occupancy topped 50 percent in mid-March, only the second time that’s happened since the pandemic began.

But the city is still behind other leading destinations when it comes to hotel revenue recovery.

Office attendance continues to recover sharply since the beginning of the year, and especially from April 2020 when it was below 10 percent.