California’s economic engine has slowed somewhat in 2017 and that’s expected to continue in coming years as employers have trouble finding workers in the expensive state, according to a new report.
The latest UCLA Anderson Forecast, released Wednesday, calls for job growth of 1.8% by year’s end, 1.6% in 2018 and 1.2% in 2019. That’s not necessarily a bad thing, economist and forecast director Jerry Nickelsburg said.
“What sounds bad on the surface is just a symptom of good labor markets and tight, very tight, housing markets,” he wrote in the report.
Going forward, businesses simply will have difficulty finding more workers, thus limiting growth. The forecast cited the Trump administration’s immigration policies as one reason and housing costs as another.
Many economists say expensive housing makes it difficult to recruit workers from out of state and point to that as one reason employers since January have added nearly 80,000 fewer jobs than in the year earlier period.
Economists generally blame the state’s affordability crisis on a lack of home building. For decades, they say, developers have built too few homes relative to population and job growth, in large part because of community opposition and tough environmental laws.
The UCLA forecast said new-home permits are expected to climb modestly in the next two years.