Economy May Slow in 2000, Forecasters Say
The booming Ventura County economy could begin to lose steam in 2000, and local business leaders are bracing for a potential slowdown by year-end, regional economic experts warned Thursday.
Economists predict that slowly rising inflation--particularly in oil prices--and possible rate hikes by the Federal Reserve Board this year have slightly dimmed the confidence of county businesses and could slow the economy as it enters the 21st century.
“The business sentiment is positive,” Bill Watkins, director of the UC Santa Barbara Economic Forecast Project, told more than 200 business and community leaders at the Residence Inn by Marriott at River Ridge in Oxnard. “It’s just not as positive as it was a few years ago.”
Watkins referred to a survey of 243 Ventura County businesses included in the 2000 UC Santa Barbara Economic Outlook for Ventura County, a comprehensive annual study by the university.
Fewer than 20% of respondents said they expect business conditions to improve in the next six months, and only about 5% expected conditions to get better by 2004.
“I have a hard time seeing why consensus is fading,” Watkins said. “But it is. I guess the expansion has been going on so long, you’re asking, ‘How long can it last?’ ”
The report, which tracked numerous indicators in 1999--everything from SAT scores and air quality to vacancy rates and median income, showed an economy that was still robust, even if area business confidence has declined a bit.
Since climbing out of the recession of the early 1990s and a near-crippling collapse of the Southern California real estate market, the Ventura County economy has made a sterling recovery, with soaring real estate sales, low unemployment and increasing wages.
The momentum should continue at least the first half of the year, economists said.
The average annual salary for workers in Ventura County was at a record high $34,956, up from the previous year’s high of $32,570, and retail sales are at corresponding record levels, reaching about $5.3 billion in 1999 and forecast to rise steadily through the decade.
Employment growth was at an average 3.8% during 1999, with an increase of 9,592 nonfarm jobs, but year-over-year job creation was beginning to drop closer to a more modest 2% during the final months of the year.
The number of existing homes sold was down about 5% from the decade-high of 8,867 sales in 1998, although new home sales last year were at their highest point since 1988. Unemployment in the county was at a record low 4.8%.
Total commercial and industrial investment jumped from about $204 million in 1998 to a record $264 million, with Ventura and Camarillo making up about 16% and 15% of that total, respectively. Total imports and exports through the Port of Hueneme soared 17% over 1998.
“We’ve had a miracle economy,” Watkins said.
Some economists are concerned about the continued rise of the stock market, suggesting that it may be the sign of a financial bubble--an overvalued economy with the potential to burst. Others argued that there is a new economy--one based on the Internet and new technologies that are consistently being advanced.
“It’s not a bubble. It’s a lottery,” said James Goldberg, managing director and chief economist at Trust Co. of the West. “If you don’t buy a ticket, you can’t win.”
Another economist said Asia’s recovery from its economic slump could eventually complicate the U. S. economy.
“In the Asian crisis, we made out like bandits,” said Rajeev Dhawan, director of econometric forecasting at the UCLA Anderson Forecasting Project. “Now, it’s turned around. The dollar is as strong as it’s going to be.”
Local economists predicted job growth in Ventura County to moderate a bit, with 8,500 new jobs forecast for 2000, about the same level as 1998. That would be significantly more than the average increase in the 1990s and about the same as the average job growth in the 1980s. Only the farming, government and hotel sectors are expected to see an immediate loss of jobs.
New home building should stabilize, while housing prices continue to rise, and the building of apartments will almost dry up completely as the decade progresses, the forecast predicts.
But most residents should expect to see little change to their lifestyles during the next year, economists said.
“Consumer confidence means good consumption in the next six months,” Dhawan said. “This year is in the bag. The trouble may be after that.”
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Top 20 Ventura County Employers
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Type of Number of Company Location business employees 1. U. S. Navy base Port Hueneme Home of Pacific 9,184 Seabees 2. U. S. Navy base Point Mugu Weapons testing / 7,985 evaluation 3. County of Ventura Countywide Local government 7,400 4. Amgen Thousand Oaks Biotechnological 4,800 research 5. Wellpoint Thousand Oaks Health insurance 3,773 6. GTE Countywide Marketing telephone 3,186 systems, equipment 7. Countrywide Simi Valley Mortgage lender 3,090 8. Conejo Unified Thousand Oaks Education 2,761 School District 9. Technicolor Video Camarillo Duplicating, 2,450 Services packaging videocassettes 10. Simi Valley Unified Simi Valley Education 2,290 School District 11. Ventura Unified Ventura Education 2,287 School District 12. Ventura County Ventura Medical 1,900 Health Care Agency 13. Harbor Freight Tools Camarillo Wholesale, retail 1,898 industrial tools 14. Kavlico Moorpark Manufacturing 1,400 electromechanical devices 15. St. John’s Regional Oxnard Hospital 1,363 Medical Center 16. Community Memorial Ventura Hospital 1,300 Hospital of San Buenaventura 17. Los Robles Regional Thousand Oaks Hospital 1,285 Medical Center 18. Kinko’s (corporate Ventura Printing services 1,248 offices) 19. Air National Guard Point Mugu Military 1,200 20. Oxnard Union High Oxnard Education 1,140 School District
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Source: UC Santa Barbara Economic Forecast Project
