More Central Valley residents are employed and home values are rising, according to the newest update of California State University, Stanislaus's Business Forecast Report.
The new study by CSU Stanislaus business economics professor Gökçe Soydemir shows positive signs throughout the San Joaquin Valley.
Soydemir’s second annual Business Forecast Report was first released in November 2012. The recently released midyear update predicts continued economic recovery in the Valley through the middle of 2015.
Highlights from the report include the following:
– Employment growth in all sectors except government during the first half of 2013, with construction and manufacturing jobs showing the most growth. Over the next two years, all sectors are expected to continue to grow. The total employment has grown with varying speeds in every San Joaquin Valley county over the past year.
– Housing prices continue to improve, with an expected increase of at least 5 percent annually over the next two years. Soydemir says that these improvements will lead to an increase in consumer wealth and confidence, which positively impacts overall spending on goods and services.
– Federal budget sequestration is not likely to be immediately felt in the Valley but may inevitably put a drag on long-term recovery. The sequestration's effects are also countered by measures taken by the Federal Reserve which will continue until the national unemployment rate falls below 6.5 percent. The Valley’s unemployment rate will likely be around 12% in the first half of 2014.
– Bank assets that are past due displayed their sharpest decline since the end of the recession in January 2009. According to Soydemir, this indicates that the health of consumers' balance sheets continue to improve.
The Business Forecast Report provides projections for the Valley’s labor market, regional housing conditions, prices and inflation, and depositary institutions and capital markets. To conduct the study, Soydemir and his team use a unique forecasting model that produces lower and upper statistical bands; actual results are expected to fall within this range.
According to CSU Stanislaus, the 2012 forecast had an overall accuracy of more than 97 percent based on actual data collected in March.
To view the full Business Forecast Report for free online, visit http://www.csustan.edu/sjvbfr/reports/2013BusinessForecastReport_Vol2Issue2.pdf.