October 2, 2003 5:53 PM PDT

Upturn may be driving Silicon Valley traffic

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If an increase in freeway traffic is any indication, the long-troubled Silicon Valley economy may be picking up.

Anecdotal evidence suggests that a two-year decline in congestion is starting to reverse itself, with San Francisco Bay Area commuters finding that it's taking longer to get to work. While the cause could be any number of things, some tech-industry veterans say it may be a sign that the economy is picking up.

Longtime Bay Area traffic reporter Ron Lyons said he has noticed increased congestion on several commutes in recent months.

"I noticed it especially after Labor Day," said Lyons, who has covered morning traffic for more than a decade for Bay Area radio station KCBS. Commutes that have started to back up, he said, include the routes that head from San Mateo (about 20 miles south of South Francisco) to Silicon Valley, and the drive across the Bay Bridge, which connects the East Bay with San Francisco.

A year ago, traffic on the Bay Bridge wasn't bad until 7:30 a.m., Lyons said; now it starts to back up at 6:15 a.m.

That, said economic consultant Doug Henton, is a good sign for business. After steep job losses in 2001 and 2002, the region is slowly creating new jobs, Henton said. Another encouraging sign is a recent increase in the number of temporary jobs, considered a leading indicator of a pick-up in full-time jobs, he added.

"I think you are starting to see some spots where the economy is coming back," said Henton, who is president of Mountain View, Calif.-based Collaborative Economics. The chip and software industries are showing signs of life, although the telecommunications industry remains weak, he said.

Still, it's much too soon to point to a widespread improvement in a regional economy that is heavily dependent on the fortunes of the tech industry, Henton said. "We need several more months and quarters before we can see if there is a significant turnaround."

Indeed, not all of the business indicators are positive. According to the latest report on unemployment, San Jose, Calif., had the second highest rate of joblessness in the country, at 7.9 percent. That report, which was released this week, was for the month of August.

Henton said jobs are being created, but federal unemployment statistics don't reflect that. That's because many of the people who are finding jobs now have been out of work for some time--so-called discouraged workers who aren't accounted for in unemployment figures. That means even if new jobs are created, the unemployment figure may not significantly drop.

Still, many Silicon Valley veterans are optimistic that the newfound traffic congestion is a sign of better times.

"All I can say is that when (the) dot-com (boom) started, that was my indicator that something was going on," said Ken Dulaney, a mobile devices analyst for Gartner. "I drove yesterday and saw the same thing. It's the best leading-edge predictor I can see."

Laurie Rieger, a spokeswoman for Microsoft, said these days it is taking her about an hour to drive to Microsoft's campus in Mountain View, Calif. That's up from a rush-hour commute of 30 minutes a few months ago, but still down from about an hour and a half a few years ago.

"At the bottom of the downturn it didn't take me any time at all," she said.

Some say the back-to-school season and seasonal trends, not just an economic improvement, may account for some of the backup on Bay Area freeways.

"I've noticed an upturn in traffic also (commuting from Mountain View to San Jose), but then I've always perceived less traffic in the summer and more in the fall," said Dan Teeter, an IT engineer for Cisco Systems.

Another shift, locals say, is that there is more traffic from outlying areas. Most attribute that change to soaring Bay Area home prices, which have forced people to live further from where they work. Lyons noted that the commute from Tracy to Livermore--two cities quite far east from Silicon Valley, can take as much as an hour these days, with commuters still needing to endure a substantial drive to make it to final destinations such as Palo Alto and San Jose.

WebTV and Danger co-founder Andy Rubin has another take on the idea, but he still sees signs that things are picking up. From his perspective, drivers seem to be more polite, whereas during the worst part of the downturn there was more road rage.

"Personally, I encounter more intolerant drivers during a downturn," he said. "I guess these are the people who are facing the most pressure from their jobs, investments, mortgages..."

For her part, Rieger said she is in a better mood with the longer commute than when she was zooming to work. "It was nice, but it made you feel kind of guilty," Rieger said. "I don't like traffic, but it's nice to know people are working."

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