Economy Is Poised to Keep Expanding
Despite the possibility of war, Ventura County’s strong economy is poised for even more growth during the next two years as the number of jobs climbs, salaries increase and the median price of homes continues to rise.
The prediction came from Mark Schniepp, director of California Economic Forecast in Santa Barbara, who spoke to more than 250 people Thursday at a semiannual conference on the local economic outlook.
Schniepp brushed aside concerns about how a war with Iraq might send the nation’s economy into a downward spiral. On the contrary, he said, a war would probably stimulate the economy because the government would spend more money on equipment, vehicles and telecommunications, increasing production and employment.
“The war is really much to-do about nothing when it comes to the question, ‘Is this going to have a big impact on the economy?’ If it does have an impact, it will be relatively moderate,” he said, “unless there’s some unanticipated event that occurs, like a major reprisal by Al Qaeda that we don’t prevent.”
He predicted consumer spending would also not be affected by war.
“Because [consumers’] home equities have risen so sharply, their fears are really not affecting their spending,” Schniepp said. “The consumer economy is pretty much bulletproof in this war.”
Although Ventura County created 703 nonfarm jobs last year, the smallest total since 1993, Schniepp predicts employment will increase 1.2% this year and 1.6% in 2004. In the 24-month period, the economist expects the county to gain 8,060 jobs, for a total of 288,964.
While impressive, this pales compared to the pace of earlier job growth. For perspective, the county created 6,000 jobs in 2001 and 10,500 in 2000. “We’re doing much better than the state and better than Southern California in general,” he said.
With last year’s overall jobless rate at 5.2% and a record low 4.5% in 2001, Schniepp maintains the county is virtually at full employment. “If you want a job, you can get a job,” he said. And those who are working can look forward to fatter paychecks.
The average earnings for each worker in Ventura County are projected to grow from $41,256 last year, to $42,945 this year and up to $44,434 in 2004. A looming housing crisis presents the largest cloud on the horizon, according to Schniepp, who wrote in his 68-page forecast that “clearly not enough homes are being built in Ventura County, and not enough inventory of for-sale homes will be forthcoming.”
This limited supply, along with historically low mortgage rates and a steady flow of displaced Santa Barbara County workers seeking less-expensive housing, has fueled demand and pushed prices beyond the reach of many young professionals.
Prices for new single-family, detached homes jumped nearly 22% in Ventura County last year to $586,600, and the median for existing homes was just under $373,000. Both types of homes are a relative bargain compared with Santa Barbara County’s median price of more than $700,000. Approximately 2,500 new dwelling units were built last year, and the level is expected to ease a bit to 2,300 this year and 2,420 next year. But as the population increases and more jobs are created, that level of housing is inadequate, Schniepp said.
“That’s nothing ... especially for a county bumping up against 800,000 population. That’s abysmal,” he said. There is a four-year supply of housing projects throughout the county that are approved and waiting to be built, the report states, but few of those 13,128 dwellings likely will be constructed this year because of delays in planning and in obtaining building permits.
Nearly a quarter of that total, 3,050 units, would be constructed in the Ahmanson Ranch development east of Oak Park.
