Status of the Re-Opening of the San Francisco Economy: July 2021 CITY & COUNTY OF SAN FRANCISCO Office of the Controller Office of Economic Analysis July 22, 2021 Highlights of the July Report 2 . As the COVID-19 restrictions have been lifted, the Controller’s Office is tracking the pace of re-opening of the city’s economy. This is the second monthly report examining a variety of local economic indicators. In June, local job growth was the strongest since June 2020, with 17,200 jobs gained in San Francisco and San Mateo counties. Total employment in the San Francisco metro division is still 100,000 below the pre- pandemic level of February 2020. Hotel occupancy is one of the fastest-improving local indicators. 45% of all pre-COVID rooms in the city were occupied during the week of July 4, though this is well below the pre-pandemic average of close to 80%. Bay Area weekly office attendance continues to lag other U.S. metro areas, and the city’s office vacancy rate topped 20% over the April-June period, indicating continuing weak office demand. BART ridership to downtown San Francisco continued its slow recovery, while measures of automobile commuting, like bridge traffic, are nearly at pre-COVID levels. List of Economic Indicators 3 1. Time Spent Outside of the Home 2. Office Attendance 3. Office Vacancy 4. Small Business Sentiment: Expected Recovery Index 5. New Business Registrations 6. % Change in Consumer Spending 7. Total Employment in San Francisco & San Mateo Counties 8. San Francisco Unemployment Rate 9. Hotel Occupancy Rate 10. Hotel Average Daily Rate (ADR) per Night 11. Small Business Sentiment: Expected Future Business Travel 12. San Francisco International Airport Enplanements 13. Convention Bookings At Moscone Center 14. PM Freeway Speed 15. Bay Bridge and Golden Bridge Traffic 16. BART Exits at Downtown SF Stations 17. Average Asking Rents for Apartments 18. Building Permits 4 https://opportunityinsights.org/wp Source: Google Mobility, Opportunity Insights, Time Spent Outside Home Approaching Normal Time Spent Outside Approaching Home % Change in Time Spent Away from Home -45% -40% -35% -30% -25% -20% -15% -10% -5% 0% 3/1/20 3/15/20 3/29/20 4/12/20 Change relative the to January 2020 index period,seasonallyadjusted. not 4/26/20 - content/uploads/2020/05/tracker_paper.pdf 5/10/20 5/24/20 San Francisco and California, Through 10 July Through California, and Francisco San 6/7/20 % Change in Time Spent Outside Home, Home, Outside Spent Time in % Change 6/21/20 https://tracktherecovery.org 7/5/20 7/19/20 8/2/20 8/16/20 8/30/20 9/13/20 9/27/20 10/11/20 10/25/20 11/8/20 11/22/20 12/6/20 12/20/20 1/3/21 1/17/21 1/31/21 2/14/21 2/28/21 3/14/21 3/28/21 4/11/21 SanFrancisco California 4/25/21 5/9/21 5/23/21 6/6/21 6/20/21 7/4/21 5 Source: Kastle Systems Office Workers Slowly Returning; SF Metro Lags SF Metro Slowly Returning; Workers Office Weekly Office Attendance Rate, % 10% 20% 30% 40% 50% 60% 0% weekly. weekly. WorkKastle Barometer Back to reflects authorizedunique user entries in a market pre relative its to 4/1/2020 4/15/2020 The San Francisco Metro Area includes San Francisco, Alameda, Contra Costa, San Mateo, and Marin counties. and Marin San Mateo, Costa, Contra Alameda, Francisco, San Area includes Metro The San Francisco 4/29/2020 San Francisco Metro New York Metro SanJose Metro Los Angeles Metro Austin Metro 5/13/2020 5/27/2020 Weekly Office Attendance Across Selected Metros, Metros, Selected Across Attendance Office Weekly 6/10/2020 6/24/2020 7/8/2020 7/22/2020 8/5/2020 8/19/2020 9/2/2020 9/16/2020 9/30/2020 July 14 Through 10/14/2020 10/28/2020 11/11/2020 11/25/2020 12/9/2020 12/23/2020 1/6/2021 1/20/2021 2/3/2021 2/17/2021 3/3/2021 3/17/2021 - COVID baseline, averaged averaged COVID baseline, 3/31/2021 4/14/2021 4/28/2021 5/12/2021 5/26/2021 6/9/2021 6/23/2021 7/7/2021 April-June Saw a Further Rise in Office Vacancy 6 Office Vacancy, San Francisco, Through 2021Q2 25% Office Vacancy Pre-Pandemic Average, 2019 20% 15% Office % Vacancy, Office 10% 5% 0% Source: Jones Lang LaSalle Local Business Sentiment Still Lagging U.S. 7 Small Business Expected Recovery Index San Francisco Metro Area and U.S., Through July 11 -0.30 National -0.35 San Francisco-Oakland-Berkeley MSA -0.40 -0.45 -0.50 -0.55 -0.60 -0.65 -0.70 -0.75 -0.80 Small Business Expected Recovery Index Recovery Expected Business Small Survey Week, Ending The Expected Recovery Index measures the average expected recovery time of businesses. The index ranges from -1 to 0, with 0 indicating normal conditions. Source: Small Business Pulse Survey, US Census Bureau. 8 Source: Treasurer & Tax Collector, City and County of San Francisco San Treasurer of Tax& City Collector, County and Source: Number of New Business Registrations New Business Formation Remaining Steady Business New FormationRemaining 1,000 1,200 1,400 1,600 1,800 200 400 600 800 0 Jan-20 Feb-20 Mar-20 Monthly New Business Registrations, Business New Monthly Apr-20 May-20 June Through Francisco, San Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Pre-Covid Average, 2019 Pre-Covid Average, BusinessNew Registrations (Seasonally Adjusted) Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 9 https://opportunityinsights.org/wp Source: Affinity, Opportunity Insights, % Change in All Consumer Spending, 7-Day Moving Average Local Consumer Spending Pre Above -50% -40% -30% -20% -10% 10% 20% 0% 4/2/20 4/16/20 4/30/20 Seasonally adjusted credit/debit card spending relative to baseline 5/14/20 5/28/20 6/11/20 - content/uploads/2020/05/tracker_paper.pdf 6/25/20 https://tracktherecovery.org 7/9/20 13 June Through Francisco, San 7/23/20 8/6/20 Consumer Spending,Consumer 8/20/20 9/3/20 9/17/20 10/1/20 10/15/20 10/29/20 11/12/20 11/26/20 12/10/20 spending of 12/24/20 1/7/21 1/21/21 January 4 2/4/21 2/18/21 - 3/4/21 Levels COVID - 31, 2020. 3/18/21 4/1/21 4/15/21 4/29/21 5/13/21 5/27/21 6/10/21 Strong Job Growth in June With 17,600 Gained 10 Total Employment, San Francisco Metro Division, Through June 1,300,000 Total Employment 1,250,000 Pre-Covid Average, 2019 1,200,000 1,150,000 1,100,000 1,050,000 1,000,000 Employment 950,000 900,000 850,000 800,000 750,000 700,000 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 The San Francisco Metro Division includes San Francisco and San Mateo counties. Source: California Employment Development Department (EDD) Unemployment Steady at 5% (Seasonally Adjusted) 11 San Francisco Unemployment Rate, January 2020 – June 2021 14% Unemployment Rate 12% Pre-Covid Average, 2019 10% 8% 6% 4% Unemployment Rate, % Rate, Unemployment 2% 0% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Source: California Employment Development Department (EDD) 12 Source: STR Occupancy (%) Has Rate Continued Hotel Rise Occupancy to 100 10 20 30 40 50 60 70 80 90 0 10/10/2020 10/17/2020 10/24/2020 10/31/2020 11/7/2020 2021 10, July to 2020 10, October From Francisco, San TRI TRI (Total Room Inventory) takes in to account all the hotel roomsin the city, whether open or closed. 11/14/2020 11/21/2020 11/28/2020 12/5/2020 12/12/2020 12/19/2020 12/26/2020 1/2/2021 1/9/2021 1/16/2021 Occupancy, Hotel 1/23/2021 1/30/2021 2/6/2021 2/13/2021 2/20/2021 2/27/2021 3/6/2021 3/13/2021 3/20/2021 3/27/2021 4/3/2021 4/10/2021 4/17/2021 4/24/2021 5/1/2021 5/8/2021 5/15/2021 5/22/2021 2019 Pre-Covid Average, (TRI) Occupancy 5/29/2021 6/5/2021 6/12/2021 6/19/2021 6/26/2021 7/3/2021 7/10/2021 13 Source: STR Average Daily Rate per Night ($) Average Hotel Rates Are Also Hotel Are Rising Rates Average $100 $150 $200 $250 $300 $350 $400 $50 $0 4/4/2020 4/18/2020 5/2/2020 5/16/2020 5/30/2020 6/13/2020 6/27/2020 Night, per (ADR) Rate Daily Average Hotel 7/11/2020 7/25/2020 San Francisco, Through July 10 July Through Francisco, San 8/8/2020 8/22/2020 9/5/2020 9/19/2020 10/3/2020 10/17/2020 10/31/2020 11/14/2020 11/28/2020 12/12/2020 12/26/2020 1/9/2021 1/23/2021 2/6/2021 2/20/2021 3/6/2021 3/20/2021 4/3/2021 4/17/2021 2019 Pre-Covid Average, ADR ($) 5/1/2021 5/15/2021 5/29/2021 6/12/2021 6/26/2021 7/10/2021 Air Passengers Rising, But Well Below Normal 14 Total Enplanements (Domestic and International), San Francisco International Airport, Through May 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% Total Enplanements as a % of the Same Month in 2019Month Same the of % a as Enplanements Total 10% 0% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Source: San Francisco International Airport (SFO) Little Change in Moscone Bookings 15 Convention Bookings at Moscone, Through SF Travel 500 Events 450 Pre-Pandemic Average, 2019 400 350 333 300 250 200 Number of Events 150 100 64 65 45 49 50 33 21 24 27 26 24 11 11 14 18 10 11 0 7 5 0 F: Future Confirmed Events The numbers include both Moscone events and Self-Contained events that were booked through SF Travel.