A professor of business at California State University, Stanislaus reports the San Joaquin Valley economy is trending upward.
Gökçe Soydemir, the Foster Farms Endowed Professor of Business Economics at CSU Stanislaus, released a midyear update to his third annual Business Forecast Report.
According to Soydemir’s report, total employment in the San Joaquin Valley was slightly above 1.6 million in 2013, a total growth of 1.63 percent. Construction employment grew the fastest, and retail employment showed the most remarkable growth. The 1.63 percent growth was typical long-term behavior, with further steady increases likely over the next two years. Some employment areas, such as information, government, and financial activities sectors, are not expected to improve as quickly.
Home values also increased by more than 18 percent in 2013, according to Soydemir’s report. While home values are expected to continue their rise, with a projection of 20 percent growth annually through the first half of 2016, home values will likely settle into smaller, steadier growth patterns in coming years.
The number of housing permits issued also increased significantly in 2013, and foreclosures dropped to pre-recession levels and are projected to remain low.
While employment in the Valley has grown, wages went in the opposite direction. Average weekly wages increased by 2.02 and 1.55 percent in 2011 and 2012, respectively. However, wages dropped slightly, by 0.04 percent in 2013. Wages are expected to increase 0.15 percent per year over the next two years.
Bank deposits continued to grow at a steady rate of 4.64 percent in 2013, similar to the growth seen in 2011 and 2012. However, this number is still below the 10-year benchmark of 7 percent. Despite being below the 10-year benchmark, the 2013 growth was significant enough to extend loans and leases to finance continuing economic recovery in the Valley.
Data from the first quarter of 2014 has not reflected a significant impact from the drought. However, the impact is being felt in higher meat and dairy prices at the grocery store. With poor conditions already existing, another year of drought may derail farm-related business indicators.