O.C. Growth Expected to Remain Strong Well Into 2000

Orange County’s economy has lost its sizzle but remains healthy and should perform well in coming months, Chapman University economists said Tuesday as they presented sweeping modifications to what had been a gloomier forecast at the start of the year.

“The expansion will continue well into 2000,” said Esmael Adibi, director of the private school’s Anderson Center for Economic Research, “but the boom is over.”

Chapman economists also predicted that the national expansion would surpass the Kennedy-Johnson-era economic boom of the 1960s as the longest in history.

It is that national outlook--a surprisingly strong 3.9% annual growth forecast for this year--that is the biggest factor in the local economy’s performance, said Chapman economists Adibi and James L. Doti, the school’s president. They initially had predicted a weaker national growth rate of 1.9% for the year, and said Tuesday that they severely underestimated the consumer spending that has been flowing from strong real estate and stock markets.

The economists did caution, however, that the U.S. boom will begin slowing next year. They said they anticipate a 2.6% national growth pace for 2000.

For this year in Orange County, they said, employment growth will average 3.2%, or 42,000 jobs, the third-strongest performance this decade. They initially had predicted a 1.9% job growth rate.

As in recent years, many newly created positions will come from the construction and services sectors, expected to increase by 6.6% and 3.9% respectively for the year.

High-tech employment growth will cool considerably, though, rising only 1.2% after a blistering 7.8% jump last year.

Still, the local economy has been bolstered by the rising value of resale homes. Prices are expected to increase by a hefty 11% average, matching last year’s boost. The current median resale price in Orange County is $260,000.

The Chapman economists said they not only expect housing prices to rise an additional 7.6% next year, but they expect an 8% increase in commercial and industrial activity as well--a prediction that industry specialists cheered.

“The real estate market is very stable, and we’re seeing continued growth. I think what I heard [at the Chapman forecast session] is consistent with what I’m seeing going on,” said Ronald E. Soderling, senior partner at Resco Properties, a Newport Beach commercial real estate developer.