The San Luis Obispo County economy is doing just fine, economists say — slow, but still fine.
Experts at the 2016 Central Coast Economic Forecast on Friday predicted that after a relatively good year, the local economy will see continued slow growth over the next year, although the county could be uniquely poised for significant gains in some areas.
The good news: Local employment levels are at all-time highs, unemployment is back to pre-Recession levels, local incomes and spending look to be growing, and home prices are appreciating above their historical averages.
The not-so-good news: Economists predict that the local job market will only grow by 1.8 to 2.3 percent over the next few years — slightly less than forecasts for the rest of the state.
“Slow growth ain’t great, but it’s not all that bad, considering the alternative,” said Robert Kleinhenz, director of research for Beacon Economics.
Kleinhenz presented the local outlook, focusing on job growth and housing, as well as what industries could be the new drivers behind SLO County’s economy.
Kleinhenz noted that tourism-related industries have been and will continue to be big players in the local economy, especially considering the Paso Robles wine region’s growing popularity.
The leisure and hospitality sector was the largest contributor to job growth in the county, Kleinhenz said, adding more than 700 jobs in September — about 4.1 percent more than the same month in 2015.
Slow growth ain’t great, but it’s not all that bad, considering the alternative.
Robert Kleinhenz, director of research for Beacon Economics
This and other industries related to tourism are probably where the county could also see the largest job growth into the future, he said, though he clarified that those jobs are still likely to be lower-paying jobs.
“But it’s a big part of the local economy,” he said. “The symbiotic relationship between the wine industry, the wine-tasting industries and so on in the local economy, with tourism, leisure and hospitality — all of that will continue to support the local economy as long as the sun shines on the golden hills.”
Another area in which the county could potentially excel is in the competitive tech and IT sector, Kleinhenz said.
“Everybody wants to have a growing tech sector,” he said. “All these places want to be another Silicon Valley. ... It just doesn’t seem to be as easy in most communities, in most counties, as we think.”
Job growth in the local technology sector was strong in 2015, with professional and business services (which includes scientific and technical services) growing by 9.4 percent and the information sector by 10.4 percent.
There is potential for even more significant growth, Kleinhenz said, especially if the county utilizes Cal Poly — Poly stands for “Polytechnic” after all — to entice some tech industries to the area. He also noted more emphasis would need to be placed on nurturing startups and helping incubate new business ideas for this area to really grow.
He also said an aging population could give potential for more growth in the local health care industry, although that holds true for much of the rest of the country as well.