Question of ‘Turning Point’ Colors Coming O.C. Forecast

One of Orange County’s most closely watched annual economic forecasts, by Cal State Fullerton, is due next month. And the recent turbulence in the stock market and foreign economies figures to give forecasters fits.

As new developments darken the picture every day, this may be a pivotal point for the economy, said Anil Puri, the CSUF economist who will present the local outlook. “I intend to spend a significant amount of time analyzing what’s happened and what it means for us in Orange County,” he said.

Economic projections rely largely on models based on historical patterns, he said. It’s possible that what emerges will reveal a different pattern from that of the last several years.

“Turning points are the most difficult things to predict in an economic cycle,” Puri said. “The question is, is this a turning point?”

What happens with the stock market is of great importance, he said. “Many people still believe that, ‘Well, it’s just the stock market, it doesn’t have anything to do with the real economy.’ You can’t assume that.”

Indeed, Puri said, Orange County--with its high degree of stock market wealth and concentration of publicly traded high-tech companies--could feel the impact of a bear market far more than many other regions. The stock market gyrations and the turmoil in foreign economies could also greatly affect another bulwark of the local business sector: the construction industry.

“Given these changes and given what might happen to the economy, how will it impact this major sector in Orange County and Southern California?” he said. “We just barely recovered our losses in housing prices from the last recession, and here we are.”