Report Says County Mired in Recession : Economy: A bank survey registers the most pessimistic responses since 1987. Retailing and construction appear to be the hardest hit.
Ventura County business leaders overwhelmingly agree that the county is still deeply mired in recession, according to a study released Wednesday.
Nearly two-thirds of the executives responding to the semiannual survey conducted by Ventura County National Bank said the county’s economy remains weak despite the Bush Administration’s claim that the recession ended nationally in June, bank Chairman William E. McAleer reported.
“The hope is that it isn’t going to get any worse,” McAleer said.
Most businesses in the county are not hiring new workers and do not expect to do so in the next six months, McAleer said. He added that retailing, an especially important part of the county’s economy, has been hit heavily.
“Consumers are very concerned” and are holding off on major purchases, he said. “Household goods, autos and, definitely, real estate, are suffering.”
McAleer said the survey response, which was tabulated this week, was “very definitely the most pessimistic response since the survey began” in 1987.
All five indicators tracked in the study--sales, profits, inventories, employment and expected space requirements--decreased during the first half of the year. They also fell short of what executives had projected at the start of the year, McAleer said.
In fact, the indicators have fallen steadily with each survey--a condition that McAleer blamed not only on economic forces but what he called an unfavorable attitude toward business in state and local government.
Of the 5,000 business executives who were queried, 585 responded to the survey. The results were announced in a news conference at the Financial Plaza Hilton in Oxnard.
One-fourth said their companies had reduced their payrolls during the first half while only 18% reported an increased number of workers. Only 14% said they expect to increase their hiring in the months ahead.
Half said their sales decreased during the first half of the year, while 36% reported increases. As for the rest of the year, 45% expect business to show an improvement.
Major retailers and construction firms were the hardest-hit segments of the county economy, according to the report. Seventy-nine percent of retailers noted decreases in sales, while business shrank for 62% of construction firms.
The industries showing the most increased sales were hotels, 58%, and manufacturers, 48%.
Among areas whose companies reported the most increased sales, Newbury Park led with 52%. Westlake Village was second with 51.4%.
On the downside, Simi Valley had the most companies--61.3%--reporting decreased sales. Oxnard came in second with 57.6%.
On the plus side, McAleer said 45% of Ventura County business people expect sales to increase during the second half of the year and 37% expect profits to rise in the same period.
But at least part of the optimism can be attributed to retailers’ holiday-season expectations, McAleer noted.
In an interview after the news conference, McAleer said he doesn’t expect the county’s economy to rebound strongly until the summer of 1992. “We hope it’s bottoming out right now,” he said. “For the first half of 1992, we look for a long plateau, followed by a resurgence next summer.”
McAleer said he expects home mortgage rates to remain near the present level of about 9% for 30-year fixed-rate loans.
“They may drop into the 8’s, but even if that happens, we don’t expect sales to explode,” he said. “You don’t have the pent-up demand that you’ve had when rates fell that low in the past.”
The California Assn. of Realtors reported this week that sales of single-family houses in Ventura County declined 2.3% during August but were up 24.2% from a year ago. The median home price in the county during August was $237,290--up 1.3% from July and 1.4% above August, 1990.
Commercial real estate has been especially hard hit in the county, with studies showing one in every four offices standing vacant.
