The Central Valley’s progress out of the Great Recession is going to be a sluggish process that will take a few years, according to a recently released economic forecast from the University of the Pacific.
The quarterly regional economic forecast from UOP’s Business Forecasting Center is predicting a long haul toward recovery for the Central Valley — one that likely won’t be reached until 2015.
The Business Forecasting Center is predicting personal income in the Modesto Metropolitan Statistical Area, which includes all of Stanislaus County, to grow at a small but steady pace over the next few years. Personal income is expected to grow by 1.6 percent by the close of 2011. Growth will increase to 2 percent in 2012, increasing to 2.1 percent in 2013 and 3.6 percent in 2014, according to the economic forecast.
However, the high unemployment rate will be sticking with the Central Valley through the year to come. The Business Forecasting Center is envisioning job loses to continue for the area until late 2012. The unemployment rate in Stanislaus County for October was 15.2 percent, the second lowest rate of the year so far.
The Business Forecasting Center is predicting a slight rise in the area’s labor force in 2012 due to a small population increase. Coupled with low job growth, this could mean higher unemployment levels. The Business Forecasting Center is predicting the unemployment rate to rise up to 17.2 percent in 2012 and “stay well above 14 percent throughout 2015.”
The center does expect to see some job growth in a few sectors. According to their economic report, payrolls in some sectors will increase over their 2010 levels.
Manufacturing jobs will increase 4.3 percent year-on-year; the Professional and Business Services sector will add 2.6 percent of jobs; and the Leisure and Hospitality sector jobs will increase by 1 percent year-on-year.
Manufacturing has added an approximate 3,400 jobs from October 2010 to 2011, according to the Economic Development Department. Professional and Business Services have added 400 and Leisure and Hospitality has added 100, during the same time frame, according to the EDD.
“These sectors will continue to show strong employment gains, leading the recovery through 2015,” the report states.
Total nonfarm employment in 2012 will increase 0.3 percent over the 2011 level, and will increase 1.5 percent year-on-year.
The forecast for the Central Valley is a magnification of what is expected for California as a whole. The Business Forecasting Center is predicting the state’s job growth to remain at a 1 percent to 1.5 percent annual pace through 2013.
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