Our “crystal ball” feature helps decipher numerous forecasts that ponder the future ups and downs of the economy.
Buzz: An ongoing reopening and recovering of the California economy will translate to Orange County adding 100,000 jobs in the second half of this year — leaving the region at 98% of its pre-pandemic employment when 2021 is done.
Source: My trusty spreadsheet’s analysis of the semiannual economic forecast by Chapman University’s A. Gary Anderson Center for Economic Research.
Orange County’s job count jumping by 100,000 between the second quarter and year’s end to 1.64 million, Chapman says. State jobs records show that’s far above last year’s second-half increase (61,000) and nearly six times bigger than the average finish of a year this century (18,000) before the pandemic.
But if Chapman’s correct, when 2022 starts the local economy will be 42,000 workers short — or 98% — of 2020’s first quarter employment when we didn’t know coronavirus. During the lockdown period of the early pandemic era, Orange County was down 275,000 jobs.
Much of the projected hiring spree to come — as well as the pandemic era’s jobs shortfall — can be tied to leisure and hospitality industries that were battered by mandates designed to slow the spread of coronavirus and the public’s reluctance to travel.
Chapman’s forecast calls for these “fun” businesses that typically pay low wages to add 39,000 workers in the second half to 193,000. But that will still be 30,000 short — or 87% of pre-virus levels.
Professional services — primarily good-paying, white-collar work — is expected to grow by 16,000 jobs in the next six months to 330,000 — that’s 4,000 above or 101% of pre-virus levels.
And a hot housing market will help construction add 4,000 workers to 112,000 — 7,000 above pre-virus levels.
Chapman wrote: “This rapid recovery is in stark contrast to the steep decline over a three-year period that took place during the Great Recession of 2007-09.”
Other key job niches …
Manufacturing: Adds 9,000 in second half to 159,000 at year’s end — 1,000 above or 101% of pre-virus levels.
Financial services: Up 7,000 to 124,000 — 5,000 above or 104% of pre-virus levels.
Retail: Up 4,000 to 146,000 but still 2,000 short — or 99% of pre-virus levels.
Education and health industries: Up 4,000 to 231,000, but still 6,000 short — or 97% of pre-virus levels.
Government: Up 1,000 to 154,000 but still 13,000 short — or 92% of pre-virus levels.
The rebound has been a divided upswing — heavily favoring better-paid workers who could do their jobs remotely.
Consider that despite a not-so-full jobs recovery, personal income is forecast to grow 7% for all of 2021 to 114% of pre-virus 2019 levels. Many folks — but not all — are doing will, financially speaking.
And a big reason for a wealth factor driving the rebound: The median selling price of an existing Orange County single-family home is forecast to jump 15.5% this year to $1.03 million after rising 8.6% in 2020.
Chapman wrote: “With housing affordability already decreasing rapidly as the median home price in OC barrels over $1 million, we anticipate downward pressure on housing appreciation over the next two years.”
Spending will rebound with reopenings and more hirings. That should provide a firm foundation for the upswing.
Note: Chapman forecasts taxable sales countywide to jump 12% this year to just above 2019 levels.
Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at firstname.lastname@example.org
Source: Orange County Register