The economy continues to improve in San Luis Obispo County at a steady pace — with growth across all sectors and employment on the rise.
But since “we are no longer in crisis-management mode,’’ local leaders need to look ahead and address challenges to ensure a diversified economy with good-paying jobs, Jordan Levine, an economist with Beacon Economics, told about 500 people gathered at the annual Central Coast Economic Forecast on Friday.
San Luis Obispo County places in the top third of cities statewide for job growth, with 12,500 more jobs now than during the bottom of the recession, he said.
“Overall San Luis Obispo County is improving and slightly ahead of the pack in terms of recovering from the recession,” he said. “I do think the future will be bright.”
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The recovery is broad-based, with most major industries seeing growth in the last year. The healthcare industry has added over 600 new jobs, and jobs related to the tourism industry continue to grow. Retail jobs have remained somewhat stagnant, but as consumer spending continues to increase, an uptick is expected there as well, said Levine.
Levine cautioned that despite the positive growth, local business leaders should not go into cruise control. “Now is the time to turn the page and start chipping away at longer-term structural challenges,” he said.
Those challenges include diversifying and balancing local growth, investing in infrastructure needs, education, and in local development. Leaders also must “attack long-term fiscal obligations,’’ such as pensions, Levine said.
Although San Luis Obispo County’s robust wine and tourism industry is a valuable part of the local economy, Levine said, it is important to diversify growth to make sure the region doesn’t become too dependent on one economic sector.
“The county is also facing the need for more housing,” said Levine. “How do we effectively manage our resources that play to the strengths of San Luis Obispo County but meet the needs for growth? There is no easy solution, but the conversation needs to happen now that we are no longer in crisis mode.”
Taking steps toward the creation of a water district for the Paso Robles groundwater basin was one step in that direction, he said, because it gives local residents control, not Sacramento.
An added focus on growing the airport and putting more emphasis on education and high level jobs is also necessary, he said.
Other positive factors noted by Levine:
- Unemployment rates in the county are down to 5.5 percent, notably lower than the state level of 7.3 percent, despite the fact that more people have entered the workforce.
In addition to the influx of jobs, tourism and business spending also continues to grow.
While automobile sales and restaurants and hotels saw strong growth over the last year, as evidenced by sales tax growth, the business industry sector dropped by double digits. However, that decline follows the largest rebound in taxable sales last year because of recent solar projects, which experienced a 35 percent growth in 2013 from the prior year. Those projects are now nearly complete, which led to the decline.
Taxable sales have increased in all seven cities, with Grover Beach seeing the largest gain. Arroyo Grande, Paso Robles and San Luis Obispo reported more than a 4 percent increase in sales tax revenue.
That increased spending can be tied to tourism, reflected in hotel bed taxes and occupancy rates.
The housing market recovery is slow but steady.
The median price of homes in the county has grown 3.2 percent year over year, compared with 15 percent the year before, according to the Beacon report. That’s less than the double-digit increases seen in other areas, such as Santa Barbara and San Francisco. But that’s good considering that local incomes are not growing at double-digit levels, Levine said.
Home sales are down across the county, with the largest decreases seen in the South County, particularly in Grover Beach and Arroyo Grande.
In San Luis Obispo County, the number of building permits for multi-family and single-family homes declined by 3.5 percent year to date.
The housing rental market, however, continues to skyrocket — a trend seen statewide.
Commercial building permits, valued at $96 million in 2014, also declined countywide by about 12 percent from the year before.
“Builders are getting back to businesses,” said Levine, adding that the numbers in 2014 don’t look as they did in 2013 when things surged. “But building is still happening.”