More Economic Growth Forecast
The healthy growth in the Ventura County economy during the first half of the year is not expected to slow despite a slight drop in the number of new jobs created and a decline in optimism among business leaders, a UC Santa Barbara economist said Wednesday.
“This is relatively good news,” Mark Schniepp, head of the UCSB Economic Forecast Project, told a gathering of about 30 business and government leaders in Camarillo.
“The midyear assessment is still very bright,” he said. “And there is absolutely no concern that the recovery will fizzle.”
Several indicators point to continued economic expansion, Schniepp said.
Home sales for the first seven months of the year have been explosive, posting a 25% increase over 1995. The rate of residential building is the fastest since 1987. Vacancy rates for office and industrial space continue to decline and consumer spending is up, he said.
The only indicators that showed a slowdown were the pace of job creation and business sentiment, an index derived from polling area employers and business owners.
“The business sentiment survey showed a slight downturn only in the most recent survey,” Schniepp said.
When asked if their businesses were better off than a year ago, 50% responded affirmatively this summer compared with 61% last summer.
“This doesn’t mean conditions are getting worse,” he said. “People still think conditions are as good as they’ve ever been. They just don’t see the same potential for growth as a year ago.”
The rate of job creation has also slowed slightly in the last couple of months, Schniepp said. For example, the rate of job growth was 1.2% in June 1996, down just over one percentage point from the previous year.
“Ventura County is not much different from the rest of the state,” he said. “We are now in record territory [in numbers of jobs]. But we are actually seeing a slowing down with respect to recent years.”
Schniepp said employment is rising fastest in public education, business services and retail trade, while there is still a slide in civilian employment at the military bases and a slight decline in agriculture jobs.
Several indicators point to the fact that the economy in the eastern portions of the county continues to outpace that of the Oxnard Plain.
“The areas that are leading the new home market are Thousand Oaks and Simi Valley,” said Ernest Siracusa, a real estate analyst invited to address the forum. Since more residents in the east county commute into the San Fernando Valley, the economic upturn in that area benefits the communities of eastern Ventura County, he said.
Schniepp said consumer spending was also up sharply in Thousand Oaks but that Oxnard, with is plethora of discount retailers, was seeing a strong growth in the retail trade.
“The investment in affordable retail space is paying off,” Schniepp said. Oxnard is the beneficiary of consumers in Santa Barbara and Los Angeles counties who are looking for good value, he said.
Schniepp also said the recently approved 90-cent increase in the minimum wage will have a negligible effect on the county’s economy.
Of 114 businesses polled, only eight had one or more employees who earned minimum wage. None of the businesses surveyed reported that the wage increase would force them to lay off employees and only 9% said they would hire fewer workers than planned.
