Continued Economic Growth Is Forecast
Ventura County’s economy may not have regained the momentum that it had in the 1980s, but it should continue to grow during 1996, bringing additional jobs and more retail sales to the county, a university economist said Wednesday.
UC Santa Barbara economist Mark Schniepp made this prediction at the third annual Ventura County Economic Forecast Seminar, held at the Thousand Oaks Civic Arts Plaza. With about 300 businessmen and women wedged into the plaza’s Forum Theater--most paying between $85 and $110 for a glimpse of the area’s financial future--Schniepp ran through a list of positive indicators.
Consumer retail spending grew during 1995 to $4.45 billion and should increase another 3.5% this year. The real estate market, which spent 1995 in a slump, should rebound, with home prices stabilizing at just under $200,000 for an average home.
But Schniepp, and several of the seminar’s other speakers, warned that the county’s economic landscape contained hints of future trouble. As companies nationwide and locally continue to shed staff, workers fear for their jobs and hesitate to make big purchases.
High-paying jobs in manufacturing are disappearing, such as at Nabisco Foods in Oxnard, which gave out pink slips in November to 175 workers who produced A-1 Steak Sauce and Grey Poupon mustard and Wilson Sporting Goods, which relocated its golf club manufacturing operation from Newbury Park, idling more than 80 workers.
And while the local economy is creating some new jobs, many are low-paying service positions.
“We’re still adding jobs, we’re still doing well, but we’re still not replacing high-paying jobs,” Schniepp said.
The number of jobs within the county grew 1.6% during 1995 and should increase another 2.6%--or 6,529 jobs--this year, Schniepp predicted.
Business services--which include management consultant firms, temporary agencies, some software designers and other companies--should account for much of the increase. Public schools will also begin hiring, driven by an increase in the number of school-aged children within the county, according to the forecast.
The local economy should also receive a boost from the area’s shoppers, Schniepp said. Although retail sales levels in 1995 grew at a slower pace than they had in 1994, when the Northridge earthquake drove San Fernando Valley shoppers into Ventura County, local retailers have held onto many of their new customers from across the county line.
“What’s impressive here is to note that many of those gains are still being maintained in Thousand Oaks, and the same goes for Simi and Moorpark,” Schniepp said.
Other factors expected to work in the county’s favor, he said, include greater occupancy of commercial and industrial real estate, increased import and export traffic through the Port of Hueneme, and an upturn in the number of homes sold in the county.
But Michael Carney, executive director of the Real Estate Research Council of Southern California, warned that the future of the Ventura County real estate market may not be so bright. Home prices are still sliding, dropping 2.6% between October 1994 and October 1995, he said.
Although Carney said he thought that the market would improve in 1996, he did not foresee a dramatic turnaround.
“I think we’ll be lucky in 1996 if home prices stabilize,” he said. Acknowledging that others had given more optimistic forecasts, he added: “There is optimism out there. I’m saying it’s not coming from any of the numbers I’m looking at.”
Many potential home buyers, Carney said, are still plagued by fears about job security.
Larry Kimbell, director of UCLA’s Business Forecasting Project, said that same uncertainty can be found throughout California and the nation.
Although both the state and national economies should experience moderate economic growth this year, with relatively low unemployment levels, recent rounds of layoffs--such as AT & T Corp. laying off 40,000 employees nationwide in January--have made people cautious and anxious.
“A lot of people are fearful of losing their jobs, and for good reason--they are losing their jobs,” he said.
The forecast of moderate growth rang true for Tim Jones, co-owner of the Jones & Maulding insurance agency in Oxnard, who attended the seminar. “I think slow growth is what I’m seeing,” he said.
Jones also agreed that job insecurity is greater now than it used to be and worried that, as businesses use improved technology to handle tasks once performed by people, the economy could suffer. But he said he did not expect a return to the old ways of doing business.
“We’re all waiting for it to be like it used to be,” he said. “And it isn’t going to be the way it used to be.”
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Ventura County Economic Forecast
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1995 1996 1997 Unemployment rate (percent) 7.9 7.3 7.3 Inflation (change in CPI) 1.6 2.1 2.8 Home prices (in thousands of $) 200.1 199.3 210.4 Residential building (units) 2,153 2,500 3,300
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*1995 *1996 *1997 Population 1.4 1.4 1.4 Real personal income Total 1.8 2.0 2.2 Per capita 0.4 0.6 0.7 Real average earnings per worker 2.1 2.7 2.0 Nonfarm employment 1.1 2.8 1.8 Education jobs 2.0 1.5 2.0 Business services jobs 11.9 8.5 4.2 Health-care jobs -3.3 4.3 1.4 Self-employed proprietors 1.5 2.1 2.1 Real retail sales 1.3 3.5 1.0
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* (percent change)
Source: UC Santa Barbara Economic Forecast Project
