STOCKTON — California remains on the path of slow recovery according to the latest projection from the Business Forecasting Center at the University of the Pacific, released Aug. 21.
For 2012 and 2013, real gross state product is forecast to grow at an average 2.5 percent rate for both 2012 and 2013, and jobs will increase at a 1.8 percent pace.
California’s unemployment rate is currently 10.7 percent, and is projected to remain in double digits through the second quarter of 2013. In 2014 and beyond, the pace of recovery will gradually accelerate as housing and construction begin making a positive contribution to the economy. Housing starts are projected to double from current levels in 2014.
The regional outlook shows that 2012 is the first year of economic recovery in most areas of the hard hit Central Valley. Despite being home to the nation’s largest municipal bankruptcy and having lost 12.5 percent of its jobs between 2007 and 2011, the Stockton area is currently leading the region in job growth fueled by its expanding role as a transportation and distribution center, the construction of a nearly $1 billion correctional health care facility, and some initial recovery in health care and service sectors.
A variety of policy actions with uncertain effects loom particularly large for the Central Valley in 2013: including uncertain state education funding, lawsuits that could impact the start of high-speed rail construction, and the effects of implementing California’s cap-and-trade greenhouse gas program on the Valley’s energy intensive economic base of food processing, transportation, and agriculture.
These policy issues are somewhat less critical to the Sacramento region, but renewed furloughs and the outcome of the governor’s tax initiative add to uncertainty.
The Bay Area continues to lead the state’s recovery, and has now spread beyond San Jose and the technology surge. All parts of the Bay Area are projected to exceed 2 percent job growth in 2012.
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 http://forecast.pacific.edu/.