SLO County's economy will end year on a good note, expert says

Christopher Thornberg, founding partner of Beacon Economics, speaks at the Central Coast Economic Forecast in November 2012.
Christopher Thornberg, founding partner of Beacon Economics, speaks at the Central Coast Economic Forecast in November 2012.

With more jobs, a stellar tourism industry and a once-shaky housing market that’s found solid ground once again, San Luis Obispo County is slated to have a good year financially despite a weak beginning, according to the 2014 Central Coast Economic Forecast Mid-Year Update.

“Add it all up, and the positives are there,” said Chris Thornberg, founding principal of Beacon Economics, the Southern California firm that presented Friday’s forecast to 215 people at the Paso Robles Event Center. “And 2015 will be better yet.”

Even with economic recovery now a reality, Thornberg said the county’s water troubles will make for tough decisions ahead as the community decides how to allocate scarce resources.

“For all the good news it’s still been a frustrating recovery,” he said.

The county’s job growth is up 1.3 percent this year compared to 2013, with the most gains in the industries supporting wholesale trade, information services and real estate.

Tourism jobs, as indentified in the area’s leisure and hospitality sector, were up 1.9 percent this year compared to last year with 16,400 jobs.

As an industry, “tourism and wines — these industries are on fire, which is great for the local economy here,” Thornberg said.

Locally, consumer spending on restaurants and hotels is up 7.6 percent in the third quarter of 2013 compared to the year prior.

With the discussion of wine, the topic of water also took a focus in Friday’s talk.

While Thornberg gave kudos to the county’s wines, saying the local wine industry is good for wineries, hotels, eateries and retailers, he noted that local water concerns put a damper on those gains by raising questions on what are the community’s priorities.

“Before you put a moratorium on anything, you’ve got to think what wine means for the local economy. And the answer is there’s been a big boom in the industry.”

In August 2013, county supervisors approved an emergency ordinance that prohibits any new pumping from the dwindling Paso Robles groundwater basin unless it is offset by an equal amount of water conservation. The move means many vintners can’t plant more vines for their wineries.

The county’s wine grape value is up 11.3 percent — much larger than the wine regions of Napa, which saw no increased value, and Sonoma’s 3.8 percent value gains.

On the housing front, the county’s median sales price of $476,206 in the first quarter of this year stands at a solid 17.5 percent increase over the year-earlier period.

Homes in Arroyo Grande saw the largest gains in the first quarter with a $569,224 median sales price — a nearly 20 percent bump over last year’s first quarter — while homes in Grover Beach saw the smallest increase of 3.7 percent at $388,710.

Meanwhile, home sales dropped. Overall, the county saw 712 fewer homes sold so far this year than it did in the same period last year, representing an 8.1 percent decline.

Atascadero, Paso Robles and Arroyo Grande saw the largest dips in home sales — between 16 and 17 percent in the same time period.

The midyear update was hosted by the Atascadero and Paso Robles chambers of commerce and organized by the Central Coast Economic Forecast Project, which is led by a volunteer board of directors. The next Central Coast Economic Forecast is planned for Nov. 7 at the Alex Madonna Expo Center in San Luis Obispo.