By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Experts weigh in on Turlock’s economic future
Turlock Business Conference
Turlock business owners, entrepreneurs, city officials and economic experts met at the Grand Oak on Monday for the first ever Turlock Business Conference, where a panel of experts presented economic statistics from past years while taking time to predict economic future trends and give advice ahead of what they expect to be a unique year (Photo courtesy of the City of Turlock).

Over 100 community members convened at the Grand Oak Banquet Hall and Event Center on Monday for the first-ever Turlock Business Conference. A panel of local experts presented statistics from recent years while also predicting future trends and providing their two-cents as to how people should navigate what they expect to be unique economic times.

Monday’s panel consisted of Stanislaus State professor of business economics and Foster Farms endowed professor Dr. Gökçe Soydemir, Somjita Mitra of the California Department of Finance and Westamerica Bank regional vice president Jeff Ault. One feeling that the three shared is that we are heading into a unique time filled with uncertainty.

“We’re all at the mercy of three rates: Inflation rate, interest rate and unemployment rates,” said Soydemir. “They’re all indicating different things and are sending mixed signals. We have rising interest rates, but inflation has been very stubborn and it has not come down as [fast] as people would like. That being said, we have a tight labor rate and unemployment rate is fairly low.”

Soydemir is correct in his analysis. Interest rates in the United States are currently hovering between 4.5% and 4.75%, with the federal reserve anticipating a target rate of 5.18%. These rates are rising due to the fact that inflation remains high at 6.3%, which Soydemir blames on high oil prices around the globe. All this being said, unemployment rates continues to improve, last being tallied at 5.3% locally and 3.91% nationally in December.

“It’s a bit weird because unemployment is supposed to go up with interest rates going up and inflation not going down,” Soydemir said.

The result of all this comes down to people not getting as much bang for their buck, and that an economic recovery is going to take more time than anybody would like. For reference, Soydemir presented statistics on yearly income and Q4 retail sales in 2022 in Stanislaus County.

“Retail sales were disappointing, and not only did they fall short on expectations, but they were below pre-COVID numbers,” he said. “There was also wage inflation. Wages have been increasing quite a bit. In fact, in 2020, the 8.4% was the highest that had been observed since we started tracking that, and it normally grows a little less than the inflation rate. Now what’s been happening is that it’s been declining as inflation has remained stubborn, so that’s having an impact on our purchasing power.”

As sales and profits not booming as they used to, Soydemir predicts that retail employment will decline by .71% in 2023, which will have a disproportionate impact on the Central Valley considering that approximately three-fourths of the region’s population is deemed “unskilled,” as they either do not have college degrees, high income or long-term employment solutions.

Another factor in the slow economic rebound in the state and region is population decline. Mitra added that there has been a unique shift in that California has seen people leave, while Stanislaus County has seen population grow. She explained that there are concerns about both of these things.

“We have a state with a problem with declining population,” Mitra said. “We would be hovering around 0% growth over the next few years… if the population declines enough, we would obviously see an impact on our economic growth and prosperity. In Stanislaus County, we are the exception for most of the state. Population growth is expected to continue, and it’s really been driven by the 65 years and over, and they will continue to drive growth in the county.”

As more seniors are replacing spots left by younger generations who are either moving counties or out of the state, Mitra believes that the labor force could continue to shrink, but job openings could increase or remain unfilled as time goes on.

This anticipated trend could also continue to impact the housing market, as Soydemir explained that a shortage of single-family building permits in the Valley will continue, even as housing prices continue to drop. In Q4 of 2022, housing prices took a 13% dip.

With inflation and interest rates high and little change expected for the future, Soydemir anticipates that those with reliable employment will continue to hold onto their properties, especially as construction slows down with loans not being extended, high prices of materials and there being 5,000 fewer workers than there were prior to the 2020 pandemic.

So, what should people do with these statistics and predictions?

Ault believes that it will certainly be harder for new businesses to startup or new development to get underway. Considering the potential lack of room for growth in what many people expect to be a recession, he explained that people should keep things simple, such as using more cash, constrain from large purchases and resist accumulating new debt.

Mitra had similar advice, stating that individuals should not look to add any debt with loans. On the same topic of loans, Soydemir advised that individuals switch from a flexible rate loan to a fixed rate loan to further decrease any risk or unpredictability.

As a college professor, Soydemir took a slightly different approach than Ault and Mitra regarding taking on new loans. Considering the fact that a strong majority of workers in the Central Valley are unskilled, he believes that it’s time for some people to make a change and obtain a skill through higher education, which for some would require taking on a student loan.

Turlock Mayor Amy Bublak, who served as the event’s host, acknowledged the difficulty of trying to predict an economic forecast, especially with the unique trends that were presented.

“One of the reasons that we keep having things like this is because we understand that businesses run our cities,” she said. “We really appreciate you and we want you to be as educated on these subjects as possible so that you can do the best you can navigating these times as well.”