The county will experience a slow economic recovery, forecasters said Friday during a presentation about the economic outlook of the Central Coast.
But the economists added that there are promising signs the turnaround has started already.Manufacturing and construction are actually starting to come back, said Brad Kemp, an economist with Beacon Economics, a private forecasting firm.
Housing prices and sales will rebound, as will employment, but growth will occur slowly for years to come, he said.
“San Luis Obispo County is bucking a number of trends,” Kemp said, “but we haven’t turned the corner.”
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About 400 local business leaders and city officials were in attendance at Embassy Suites in San Luis Obispo for the first presentation of the Central Coast Economic Forecast.
It replaces the San Luis Obispo County Economic Outlook, which was produced by the UCSB Economic Forecast Project. The university had retooled its program to focus on Santa Barbara County.
The new local annual outlook is a local venture overseen by a board of business leaders from San Luis Obispo County.
In examining joblessness, the county’s employment rate remains at just under 10 percent, which is high by historical standards for the area.
According to Beacon, the unemployment rate, which fell from its peak of 10.7 percent in August 2009 to 9.9 percent in August 2010, will continue to drop over the next few years.
Certain segments of the economy are showing signs of improvement, including job gains among professional and business services, manufacturing and utilities.
By the end of 2012, Kemp predicts that the rate will have dropped below 8 percent, and by the end of 2015, unemployment will have fallen to 6 percent.
In other highlights:
Home sales remain “tepid at best,” Kemp said. But by mid-2011, sales in San Luis Obispo County will start to pick up as the economy continues to improve.
In August, the median price of a single family home was at $380,000, down 5 percent from August 2009 when it was $390,000.
Taxable sales improved from the first quarter of 2009 to the same period this year and Beacon expects that trend will continue as the economy continues to make strides toward recovery.
San Luis Obispo’s wine industry, the third largest in California, is a major draw for tourism, which is one of the county’s largest drivers of the economy.
National, state outlook
On the national level, the recession is long past and the country has posted five consecutive quarters of growth, said Chris Thornberg, the principal of Beacon.
He said the recession was really the economy’s natural reaction to years of overspending, both by consumers and by national financial firms that helped create the credit crisis.
“To avoid a future recession, Americans must spend within their means — period,” Thornberg said.California’s downturn has been worse because the state is more dependent on the housing market, which is taking time to recover.
The state also relies on exporting, and the U.S. dollar is weaker than other currencies, making American exports more expensive.
He echoed Kemp in saying California’s labor market is improving. For example, there are more small businesses (20 employees or less) operating in the state now than in 2001.In the final analysis, Thornberg said, “We all get to live in California. How bad can that be?”