STOCKTON — California will experience a fourth year of sluggish recovery in 2013, according to the latest projection from the Business Forecasting Center at the University of the Pacific. The center forecasts real gross state product will grow 2.2 percent in 2013, a similar pace to the three previous years, before accelerating to 3 percent in 2014 and near 4 percent in 2015.
California job growth will remain steady at about a 2 percent pace over the next few years, marginally faster than the U.S., an expected outcome given the depth of California’s recession. “California’s recovery is tracking the U.S.,” said Jeff Michael, director of the Business Forecasting Center. “There is no evidence that the California economy is significantly outperforming the U.S. economy.”
While the overall state is tracking the national economy, the Bay Area is definitely surpassing it. Employment has already recovered to pre-recession levels in the San Jose and San Francisco metro areas. The Bay Area will continue to lead the recovery in 2013 with both the San Francisco and Oakland Metropolictan Statistcal Areas posting job growth over 3 percent, and the San Jose MSA just below 3 percent. In 2014, Bay Area growth will slow to below 2 percent as the regional economy fully recovers and high housing costs and other constraints to growth become more binding.
Beginning in 2014, the fastest pace of job growth will shift inland to the Sacramento and Stockton MSAs. The forecast projects over 2 percent job growth primarily driven by construction, the improving real estate market, and gradual recoveries in state and local government.
The Business Forecasting Center at the University of the Pacific was founded in 2004. Housed in the Eberhardt School of Business, the center produces quarterly economic forecasts of California and 10 metropolitan areas in Northern and Central California. In addition to the quarterly forecasts, the center produces in-depth studies of regional issues, and offers custom economic research services to public and private sector clients. For more information, visit forecast.pacific.edu.