Orange County’s economic recovery will be kind of like a can of soda left out on a hot day — pretty flat. At least that’s what economists at UCLA think. They’re out with their annual economic forecast today.
UCLA economists expect the coming year will be a lot like this year: Slow growth in Orange County and the rest of California.
Jerry Nickelsburg is the senior economist who helped compile the UCLA Anderson Forecast’s Orange County Economic Outlook. He says the good news is the recession is over.
"As we move forward through the next year, we’ll bounce along the bottom and slowly move off of the bottom," Nickelsburg says. "So you won’t see a lot of economic growth going on through the next year."
Nickelsburg says exports will help lead California to more stable economic ground.
"Orange County is an export-oriented economy, so that’s good for the county. But you really don’t start seeing more rapid economic growth until the end of 2011, into 2012, when things really start going," he says. "So we’re looking at a couple of years, actually, of elevated levels of unemployment."
The UCLA forecast predicts about 24,000 new jobs in Orange County next year. They’ll bring down the county’s unemployment rate from its current 9.6 percent to 8.5 percent.
The UCLA economists forecast 41,000 more jobs in Orange County in 2012. But economist Jerry Nickelsburg says they won’t be in traditional job-growth sectors.
"Where they’re not is construction and non-durable goods, manufacturing and in state and local government," Nickelsburg says. "Where they are is in health care, education, technology-related industries. They’re going to be increasing jobs in hospitality. And we’ve seen some of that already this year."
Nickelsburg says that’s not limited to part-time, low-paying jobs in tourism. He says job growth — once it kicks in — will cover a broad spectrum, from lower-level jobs up to management positions.
Nickelsburg says one positive down the road will be housing. He says Orange County’s housing market stabilized about a year ago, with prices slowly inching up and a small inventory, despite the looming threat of more foreclosures.
"But what’s interesting about the housing market in Orange County is that household formation has slowed down," Nickelsburg says. "And by that, I mean the kids aren’t leaving, people are doubling up.
"And so there is potential demand increasing every month for new housing units — not necessarily purchase of housing. It may be multi-family housing, maybe rental units. But the demand is slowly building up, the potential demand."
Nickelsburg says he’s optimistic that in the next year, some of that potential demand will become realized demand, which would help push Orange County’s economy to more stable ground.
The UCLA Anderson Forecast isn't the only group to come out with its Orange County economic outlook this week. Cal State Fullerton's Mihaylo College of Business and Economics and the Orange County Business Council are due out with their Orange County economic outlook tomorrow.