Two years into an expected five-year economic recovery, the close of 2011 brought positive economic indicators – and hopes of a faster-than-expected resurgence.
But the statewide economic recovery will flag in 2012, according to the University of the Pacific Business Forecasting Center.
The center's most recent economic forecast, released this week, projects housing market weakness, decreasing export demand, and shrinking government spending to prevent the recovery from gaining momentum. Real gross state product is expected to grow 2 percent in 2012, similar to the first two years of the recovery.
The strongest statewide growth will begin in 2014 and beyond, the center finds, as housing and construction begin a return to former levels of profitability.
While growth may be on par with recent years statewide, 2012 is projected to mark the long awaited return of Central Valley jobs, according to the forecast.
“After a flat 2011, we should finally see modest, positive job growth from Sacramento to Fresno in 2012,” said Jeff Michael, director of the Business Forecasting Center.
The Stanislaus County unemployment rate is projected to drop from 16.8 percent in 2011 to 16.1 percent in 2012. The figure is expected to improve further in coming years, to 15.4 percent in 2013, 14.0 percent in 2014, and 12.6 percent in 2015.
The local recovery is not projected to keep pace with the statewide recovery; currently, California has an 11.9 percent unemployment rate, and by 2015 that figure is projected to drop to 8.3 percent. The San Jose and San Francisco areas will drive that declining joblessness rate, according to forecasting, while the Oakland area will see much more modest job growth.
Construction jobs are expected to drive the recovery over the next five years, with 244,000 jobs to be created. More than 150,000 new housing starts are projected in 2015 alone, 40 percent of those being multi-family dwellings.
Health services and professional science and technology jobs are also projected to grow sharply; 139,300 new health services jobs are expected in the next five years, and 35,800 new professional science and technology jobs are anticipated in the next year alone. And in 2011 the manufacturing segment posted its first annual increase in jobs in a decade – a trend expected to continue.
Government employment, including school employment, is slowing the recovery. More than 11,000 government jobs disappeared in 2011, and nearly 1,500 are expected to vanish in 2012.
In all, California has recovered 329,000 jobs since a winter 2010 low point, according to the center. But that recovery represents just one of every four jobs lost since a summer 2007 high. California jobs are not expected to return to pre-recession peak numbers until the first quarter of 2016, though the state will then be home to 3.3 million more people than in 2007.
Though the return of jobs may be slow, real personal income is projected to exceed its 2007 peak in 2012, due to higher wage jobs and a strong recovery in non-wage income.
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