Chapman Midyear Report Sees Continuing Growth for O.C.
Despite the many financial problems connected with Orange County’s bankruptcy, a Chapman University report released Tuesday says the county’s economic recovery and job expansion will continue this year, albeit in a scaled-back way.
In their midyear economic report, Chapman researchers did predict drops in housing activity and retail sales, but they otherwise stuck with their earlier forecast, made just after the December bankruptcy filing, that the insolvency will cost the county about 4,000 of the 21,000 jobs it had been projected to create this year.
However, Esmael Adibi, director of Chapman’s Center for Economic Research, quickly added a caveat.
“If Measure R fails and the cloud of uncertainty becomes more intense, that could shave off several [more] thousand jobs,” said Adibi, who along with Chapman President James Doti publicly supported Measure R, a sales tax increase initiative. The measure was voted on Tuesday.
Doti emphasized to the 200 people, most of them business executives, at his presentation on the campus in Orange that the new-jobs figure represents “the best-case scenario.” Should the county not solve its financial problems, he said, “the uncertainly will negatively affect capital investment and relocations. How much is uncertain.”
“I think his view is conservative,” said Raymond Dellerba, president of Eldorado Bank in Irvine, referring to the projection that the area could lose 4,000 new jobs. “I think it could possibly be higher. People aren’t going to want to come here until we’ve resolved our problem.”
In their 17th annual forecast for the county, Chapman economists had projected a second year of growth in construction for 1995. But Doti said he now believes the total number of new housing units will decline by 7% from 1994, instead of climbing 16% as the forecast had said.
Doti attributed the change to several factors that have dramatically slowed local housing sales this year: heavy rains, an increase in mortgage interest rates and the county’s bankruptcy.
The researchers also revised slightly downward Orange County’s total taxable sales increase for 1995, to 6.2% from 6.9%. This adjustment was also attributed partly to the bankruptcy.
