Stronger Growth Forecast in County Than State, U.S.

Orange County’s economy will outpace the state’s and nation’s in 1985, according to Security Pacific Corp.’s chief economist.

In presenting the bank’s 1985 economic forecast at a breakfast meeting at the Sheraton Hotel in Newport Beach on Wednesday, Robert Parry said he expected Orange County to benefit from its large share of high technology manufacturing in the fast-growing computer, aerospace and defense industries. And the above-average per-capita income of the county’s residents--$14,500 in 1983--will help ensure continued growth of retail and other local service industries, he said.

“Similar to the pattern projected for the nation, we expect Orange County’s economic growth in 1985 to slow some from the strong trend shown last year, but the county should continue to outpace the U.S. and California economies,” Parry said.

In an interview following his talk, Parry estimated that the growth in the value of goods and services produced in Orange County will exceed that of the nation by 2 to 3 percentage points this year and slightly outstrip the state’s performance.

Forecasts call for the growth in U.S. gross national product to decline this year to 3.5% from 6.7% in 1984; the increase in the value of goods and services produced in California is expected to drop to 4.5% from 9.9% last year. Such figures aren’t available for the county.

Estimates for nonagricultural employment show the county outpacing the state and nation, rising 5% from last year compared to 3.5% for the state and 1.5% for the nation.

Checks on the county’s economic growth, he said, will continue to be high home prices and increasing traffic congestion. In addition, he anticipated that the value of the dollar will fall only slightly from its present record-high levels and thus continue to hurt the county’s substantial export industry.

Unlike many of his colleagues in the economics profession, Parry said the high value of the dollar actually may be benefiting the U.S. economy by forcing American manufacturers to work harder to compete with lower-cost foreign products. “It is making us much leaner and more competitive than we have ever been,” he said.

Parry predicted that Orange County, like the rest of the nation, will benefit from a low inflation rate, which he forecast at 4% for the year. In addition, he projected that the county’s unemployment rate will stay at 4%.

Parry said he expects mortgage and other consumer interest rates to decline slightly during the first half of 1985, before rising in the second half. He said he does not believe that housing construction will increase substantially in the county this year. Consumer demand for housing as an investment, he said, will be restrained by the recent fall in county property values, following a decade of double-digit appreciation.