O.C. Seen Hummin’ Along, but With Slower Job Growth

Orange County’s economy should continue to expand next year, but rising interest rates threaten to slow job growth to its lowest level since 1995, Chapman University economists said Tuesday.

If the forecast is correct, it would mark the county’s third consecutive year of declining job growth.

“Obviously, we’re in a downdraft,” said Esmael Adibi, head of Chapman’s Anderson Center for Economic Research. “But the expansion should continue into 2001 with no signs of a recession.”

The center released a preliminary 2001 forecast Tuesday as part of an update for this year. Its final analysis for next year will come in December. The update for this year contained no significant changes.

After rising 5.3% in 1998, the county’s total payroll employment has been adding fewer new jobs, largely because of losses in the high-tech manufacturing sector. On Monday, Boeing Co. continued that trend, announcing it would lay off 900 aerospace jobs at its Huntington Beach plant.

This year, payroll employment is expected to rise 3%, following last year’s 3.5% gain.

But by 2001, the county is expected to add only 35,000 new jobs, an increase of 2.5%, Chapman officials predicted. That’s the smallest increase since 1995, when job growth rose 2.2%.

Adibi blamed rising interest rates, which have succeeded in slowing the national and local economy. He noted that the county’s job growth remains stronger than the national average, which rose 2.2% last year.

Declining job growth should also take some of the pricing pressure off the county’s real estate market.

The university predicted that home prices will rise 5.4% in 2001, compared with 11.3% last year and an estimated 9% this year.