Economic Expansion Should Continue, Expert Says
Ventura County’s economy, bolstered by soaring confidence in the local business community, will continue its broad-based expansion in 1997, adding more jobs and continuing its shift away from defense contracting, an economist predicted Thursday.
“Overall, the economy is in pretty good shape,” UC Santa Barbara economist Mark Schniepp told about 300 business and community leaders at the Radisson Suite Hotel in Oxnard. “What’s more important, you’re convinced it is.”
Schniepp was referring to a survey of 120 Ventura County businesses included in the 1997 UC Santa Barbara Economic Outlook for Ventura County, a comprehensive annual study by the university.
Although the study unveiled Thursday reports virtually all traditional economic indicators-- per capita income, real estate trends and consumer spending--are improving, Schniepp said the optimistic mood of local businesses best reflects Ventura County’s strengthening economy.
According to the survey, only 7% of the businesses said they expect to downsize their work force this year; 48% said they expect to hire more workers and 45% expect no change.
This means that in Ventura County, the trend toward downsizing--mass layoffs by major employers--may be coming to an end, Schniepp said.
“We’re very encouraged by these numbers,” he added.
Among the trends cited in the UC Santa Barbara forecast:
* Moving away from a dependence on defense, Ventura County’s economy is poised for growth in such areas as business services and entertainment.
Although overall job growth slowed in 1996--3,833 new nonfarm jobs were created last year, compared with 5,450 in 1995--the new report predicts some upsizing in 1997, including expanded job opportunities at Blue Cross and Haas Automation, a Chatsworth firm expected to relocate to Oxnard this spring.
The forecast also predicts new jobs in the broadly defined business services sector, which includes such industries as software development, to grow by 7.8% in 1997.
And analysts envisioned an economy increasingly tied to Southern California’s multimedia and entertainment industries.
Terry Myers, chief executive officer of Bouquet Multimedia, a film-editing company opening a studio in Oxnard, urged business leaders to attract more such firms to Ventura County.
* The residential real estate market will continue to pull out of an extended slump as inventories tighten and home prices rise.
The new study projects that the median home price in Ventura County will rise to $209,161 in 1997. That is a modest increase from the $206,555 median price in 1996, but the plunge in home values that has plagued homeowners for most of the decade is over, Schniepp said.
“We may actually be in a sellers’ market,” he said. “We haven’t heard that phrase for seven years.”
Oxnard-based real estate consultant Jim Ludwig, who counted himself among the optimists at the economic conference, said he expected the market to grow stronger this year.
“I’m seeing a lot of new players in the market, people coming to town, wanting to invest in real estate: commercial, residential, retail,” Ludwig said. “People have a more hopeful attitude.”
* Consumer spending in Ventura County, fueled by the success of new retail outlets in Thousand Oaks and Camarillo, should remain strong.
“These two cities embody the explosion in retail sales,” Schniepp said.
In Thousand Oaks, malls and other retail centers have held on to clients who started shopping there after the Northridge earthquake, Schniepp said, adding that the new Promenade at Westlake has helped Thousand Oaks lead the county in total retail sales, estimated at $1.27 billion in 1996.
Camarillo’s Premium Outlets and Town Center played a large part in that city’s 17.2% gain in 1996 retail sales, estimated at $268 million, Schniepp said. “You have to search far and wide in California to find” similar retail growth, he said.
* Despite the continued growth, wages will rise only slightly. Real earnings in Ventura County, which averaged $31,129 a worker in 1996, are expected to climb by 1% in 1997.
* A healthy agricultural sector and prolific trade flows at the Port of Hueneme are helping to sustain Ventura County’s economic growth. The port, which will expand its south terminal this year, will continue to maintain a strong relationship with the farming community.
Raymond E. Fosse, a port commissioner, said local trade authorities need to be wary of competition and change in the world economy if the port is to continue to enjoy success shipping local citrus products abroad.
“The Port Authority must understand trade on a worldwide basis,” he said.
Other analysts at the conference expressed cautious optimism, saying that despite steady growth, the national economy remains wary of forces such as intense competition from abroad and the uncertain future for federal entitlement programs.
Camarillo resident Larry J. Kimbell, director of the UCLA Business Forecasting Project, said Republicans and Democrats in Washington appear to have reached a consensus on economic policy geared toward moderate growth with low inflation.
“Welfare reform really does signal a new era,” he said.
But Kimbell said younger workers face the prospect of a heavy tax burden as millions of baby boomers head into retirement and collect Social Security. And workers without technical skills are at a disadvantage in today’s economy, he added.
“Are the rich getting richer?” Kimbell joked. “No, the nerds are getting everything.”
Bank of America economist Howard L. RothQ said that while Californians should be optimistic about the current economic expansion, the state faces some long-term challenges. For example, he said, manufacturing jobs traditionally filled by immigrants continue to be lost.
“If we don’t solve that, we could quickly become a society of haves and have-nots,” Roth said.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
1996 Gains and Losses for County’s Employers
*--*
Firm Gain Blue Cross of California +555 St. John’s Regional Medical Center +388 Technicolor Video Services +370 Amgen +367 Conejo Valley Unified School District +206 Olsten Staffing Services +170 Moorpark Unified School District +140 Community Memorial Hospital +137 Vitesse Semiconductor Corp. +120 GTE +105 Columbia Los Robles Hospital +103 Simi Valley Unified School District +103 Weyerhauser +60 Ventura Unified School District +44 ARC Industries +40
*--*
*--*
Firm Loss Naval Air Warfare Center (Point Mugu) -720 Naval Construction Battalion Center (Port Hueneme) -680 Farmers Insurance Group -424 Westbrook Properties (formerly Tiger Investments) -351 Practical Peripherals -327 Olga Co. -219 Camarillo State Hospital -200 Unocal -195 Gaviota Maintenance Services -170 Kavlico -168 Western Berry Farms -162 RJR Nabisco -145 Kinko’s Corporate Offices -100 County of Ventura -96 California Amplifier Co. -94
*--*
Source: UC Santa Barbara Economic Forecast Project
Ventura County Jobs Created or Lost in 1996
*--*
Net change Average Total Industry in jobs salary payroll Education +925 $28,402 $26.3 million Engineering and accounting services +629 $43,160 $27.1 million Durable goods manufacturing +517 $36,967 $19.1 million Other services +388 $18,661 $7.2 million Construction +358 $30,468 $10.9 million Agriculture +342 $16,175 $5.5 million Business services +292 $33,882 $9.9 million Retail auto sales +267 $30,776 $8.2 million Retail eating and drinking +250 $9,655 $2.4 million Other retail sales +225 $16,386 $3.7 million Insurance and real estate +217 $48,360 $10.5 million Transportation +183 $29,480 $5.4 million Finance +133 $33,471 $4.5 million General merchandise retail sales +117 $20,553 $2.4 million City government +100 $39,511 $4.0 million County government (less education) +83 $32,790 $2.7 million Medical and health services +67 $32,432 $2.2 million Wholesale trade +50 $36,307 $1.8 million All other +27 $28,625 $772,875 Nondurable goods manufacturing +25 $31,913 $797,825 State government -46 $29,583 -$1.4 million Communications and utilities -183 $38,459 -$7.0 million Oil and gas extraction -333 $52,846 -$17.6 million Federal government -458 $39,672 -$18.2 million
*--*
Source: UC Santa Barbara Economic Forecast Project
