Economist Sees Steady Gains Ahead for County

Ventura County’s economic engine, fueled by rock-solid confidence within the local business community, will continue its steady purr, adding more jobs and further diversity, an economist said Thursday.

“The Ventura County economy, and I don’t mean this in a derogatory way, is boring,” UC Santa Barbara economist Mark Schniepp told a group of about 100 business and community leaders gathered at the Orchid Professional Building in Camarillo. “Nothing explosive is happening. It’s just moving up at a steady and relatively healthy rate.”

In a two-hour seminar, Schniepp detailed the finer points of the county’s economic health and trends in the university’s Economic Forecast Project’s midyear economic update.

Although the study, which tracked virtually every economic indicator since the beginning of the year, did not deliver any earth-shattering news, it did illustrate that the county’s once-lagging economy has picked up momentum.

According to the study, optimism among area businesses has climbed to an all-time high, with 54% of those surveyed expecting to expand in the next six months.

“That’s a very good sign for the county because it can expect more hiring in the coming year,” Schniepp said, adding that these figures mark the end of a frightening period of company downsizing.

In addition, retail sales increased 4% in the first seven months of 1997, while home prices increased by 2.7% in the seven months that ended Aug. 31. Nonfarm employment, which the experts say is the lifeblood of a hard-charging economy, grew 2.7% while incomes increased by more than 5%.

And those indicators, Schniepp said, illustrate a robust local economy poised to make significant future gains.

“It’s a Goldilocks economy,” Schniepp said, borrowing a phrase from other economists. “It’s not too hot and it’s not too cold.”

Among the other trends cited in the UC Santa Barbara forecast:

* A continued shift away from dependence on the defense industry and increased diversification in the developing job market.

Although job growth had slowed in recent years, it has shown signs of picking up in the first half of 1997. Since January, 6,571 nonfarm jobs have been created, compared with only 3,833 jobs in all of 1996. The unemployment rate has also fallen a percentage point to about 3%.

The greatest job market increases, the study determined, were in the broadly defined area of miscellaneous services, which include repair and hotel jobs and some service jobs.

* The once-glacial residential housing market will continue to thaw as inventories continue to be tight.

With sales up 5% over last year, the study determined that the median home price for Ventura County edged up slightly from slightly more than $209,000 to $211,837. While the prices are nowhere near the $250,000 median level logged in the mid-1980s, Schniepp said he expects home values to continue to rise.

“I feel that what has gone on this year is absolutely mind-boggling,” said Chris McClintock, past president of the Conejo Valley Assn. of Realtors. “There are buyers waiting in line for a home.”

Both McClintock and Schniepp said the variety of home financing options available, coupled with relatively affordable home prices, is fueling the run on housing.

* Commercial real estate, like its residential counterpart, is also scarce as more and more companies relocate to the county or expand their operations. According to Jerry Pelton, senior vice president of CB Commercial Real Estate, the market is tough for buyers because of the scarcity of available buildings.

“Ventura County is experiencing the most dynamic market in a very long time,” Pelton said. “All the essential elements for a vital, long-term market have fallen into place.”

* Consumer spending in Ventura County, which has been growing in the past few years, should remain strong. With consumer confidence at a 30-year high and a 5.3% increase in per capita income in 1997, Schniepp said he expects spending to continue its steady march upward.

While cargo volumes at the county’s ports fell by about 16%, Schniepp said there was no need to worry because current figures are much larger than they had been 10 years ago.

“Everything is balanced in Ventura County and the future looks very good,” Schniepp told the audience. “There’s nothing that says that won’t last. We won’t get a recession because we simply don’t deserve one.”