Silicon Valley companies plan to intensify their hiring activity this year and ease up on layoffs, an indication that the region's economy is poised to charge to higher levels, according to a closely watched survey released Wednesday by the Silicon Valley Leadership Group.
This year, 59 percent of employers expect to add jobs in Silicon Valley, up from 46 percent with those intentions at the start of 2013. The CEO survey also found that only 4 percent of Silicon Valley companies intend to slash staffing levels locally, a marked improvement from the 14 percent planning cutbacks in 2013.
"The CEO survey shows that the strength of the tech sector means the direction of our economy is going up and to the right," said Carl Guardino, president of the Silicon Valley Leadership Group.
"High tech, biotech, med tech, cleantech, financial services are doing well."
The survey, which drew responses from 222 companies, was conducted from mid-December through mid-January. Silicon Valley in the survey is defined as Santa Clara County, San Mateo County, southern Alameda County, and a portion of Santa Cruz County.
Although tech is helping spur the regional economy, economists pointed out that not all segments of the tech sector will grow at the same rate.
"Tech is not a monolith," said Christopher Thornberg, founding partner with Beacon Economics. "Software and tech consulting is solid. But there could be a bubble in social media activity."
Yet the upswing in the economy presents severe challenges for the region. Housing and transportation were cited by employers as top challenges for businesses and employees.
That has led to a shift of some jobs out of the region. The survey found that 19 percent of those surveyed moved some employees out of the state."Reduced labor costs and/or a more available labor force" were cited by Silicon Valley employers as the most important factors behind a shift of jobs out of California, according to the CEO survey.
Among the other finding in the survey: 43 percent of respondents said the new Affordable Care Act should remain in place, while 28 percent said the health care act should be repealed.
Silicon Valley's primary strengths were seen as access to skilled labor, an entrepreneurial mind set, proximity to customers and competitors, and world-class universities and research centers, the survey found.
Economists believe the tech-led surge in Silicon Valley, which began about two years ago, isn't likely to falter anytime soon.
"Silicon Valley is poised for further success," Guardino said.
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.
Employers have robust hiring plans in Silicon Valley. Here are some highlights:
59 percent of employers intend to add jobs in 2014, up from 46 percent that had such plans in 2013.
4 percent of employers plan to reduce staffing levels in 2014, an improvement from 14 percent in 2013.
62 percent of employers added jobs in 2013, compared with 50 percent in 2012.
9.5 percent of employers reduced staffing levels in 2013, compared with 16 percent in 2012.
Source: Silicon Valley Leadership Group