Professor Predicts Upswing in County’s Economy : Business: Rebound in consumer spending is expected to continue through 1995, the analyst says.
Last year was a good year. This year should be better, proclaimed one of Ventura County’s leading economists as he dissected the local economy and unveiled his 1995 forecast.
The mostly upbeat tone of UCSB professor Mark Schniepp’s second annual economic forecast delivered to about 330 business and government leaders Thursday stood in stark contrast to the report he issued last year.
Schniepp is director of the UC Santa Barbara Economic Forecast Project, which analyzes in detail the economies of Ventura, Santa Barbara and San Luis Obispo counties.
He described the county’s economic recovery from a four-year recession as impressive, instead of modest and austere, the adjectives he used in 1994.
“I have a lot of better news to share with you,” Schniepp said, using slides of graphs and bar charts to illustrate the following points:
* Led by Thousand Oaks and its auto mall, retail businesses recorded their largest gains since 1987 as sales increased by 10.4% in 1994, the biggest jump in all of Southern California. Thousand Oaks posted a 17.6% gain while Moorpark businesses recorded a 41% increase.
“We’ve had a resounding rebound of consumer spending,” Schniepp said. That trend should continue through 1995.
* Vacant office space is becoming more scarce, dropping four percentage points to 15.4% last year. Schniepp said he expects office space to be harder to find this year, prompting construction of new office buildings for the first time in several years. Vacancy rates were as high as 27% in 1990, Schniepp said.
* Home sales rose 11% in 1994, the best year in the real estate industry since 1988.
* Hotels and motels reported a record surge in customers, with high occupancy rates indicating a rebounding tourism industry.
“Some leveling off may be occurring because the earthquake occupancy is over,” he said.
He also pointed to the booming trade volume at the Port of Hueneme, which increased business 51% last year, and a survey taken of business managers as proof that the economy will continue to improve in 1995.
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But the good news was tempered by the mixed employment outlook in the county and the continued slide of housing prices, Schniepp said during the five-hour presentation at the Westlake Hyatt Hotel in Thousand Oaks. However, county housing prices were up in January for the first time since 1989, analysts reported last week.
The well-paying, high-technology jobs lost during the aerospace industry consolidation have not come back, and no other industry appears poised to expand broadly enough to replace them, Schniepp said. Schniepp also said that Ventura County is one of the most expensive places in the country to do business because of government red tape.
Amgen Chief Executive Officer Gordon Binder, Procter & Gamble’s Oxnard plant manager Byron Rimm and an oil industry official followed Schniepp in warning that overbearing regulations keep business costs high and threaten to slow the region’s economic recovery.
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“Continuous regulations caused real problems for our plant in Oxnard,” Rimm said. He said a $40-million cogeneration project three years ago ran two months over schedule and cost $500,000 more than estimated because of unnecessary haggling with city officials over building permits.
And Binder took exception to Ventura County’s smog-reduction plan, particularly Rule 210, which mandates that some employees must car-pool to work.
“We just can’t do it,” Binder said. “It would destroy our efficiency.”
He said Amgen employees sometimes have to work late and odd hours to complete projects, and the added worry of leaving on time is troublesome.
“If you want a management job at Amgen and get promoted, forget car-pooling,” he said.
Instead of handing down mandates such as Rule 210, Binder encouraged government officials to sit down with employees in the private sector to work out a solution without lawsuits or regulations.
Ventura Councilwoman Rosa Lee Measures said formation of the Ventura County Economic Vitality Council several years ago partially solved that problem.
“(But) we have a lot of work to do,” she said. Measures is a member of that council, whose public and private members try to resolve problems that companies identify in dealing with local governments.
She also said her own city is poised to hire an economic development director, who could help streamline Ventura’s permit process to help retain and expand business in the community.
UCLA economist Larry Kimbell also gave a brief forecast of the California economy, which he predicted would improve in 1995.
“Consumer sentiment showed an improvement,” he said. “Growth should continue at a moderate pace.”
