Fritz Grupe, Jeffrey Michael, Scott Anderson and Bob Gutierrez answer questions at the Business Forecast Conference.
STOCKTON — San Joaquin County will see its fourth consecutive year of 3-percent job growth in 2016, according to the business forecast by University of the Pacific economist Jeffrey Michael.
“This is the best outlook in a decade for this county,” Michael told business leaders who attended the Business Forecast Conference hosted by the San Joaquin County Hispanic Chamber of Commerce.
In fact, over the past two months, the Stockton area ranked fourth in the state with job growth at 2.9 percent, Michael said.
In addition, Michael said wages in the county went up by 3.8 percent between June 2014 and June 2015, thanks in part to hiring in the construction, government and manufacturing sectors, which tend to supply what are regarded as middle class jobs.
San Joaquin County recovered its pre-recession level of jobs last summer, a milestone that came as a pleasant surprise to forecasters.
“It’s been more than we projected,” Michael said.
About 200 business leaders gathered for the annual conference at the University of the Pacific Tuesday morning. They also heard from Bank of the West’s Chief Economist Scott Anderson, who briefed the group on the global economy. Bob Gutierrez from Food 4 Less laid out the new laws that take effect this year. Grupe Companies CEO Fritz Grupe gave his take on issues affecting businesses in the Northern San Joaquin Valley.
Additional highlights from Michael’s presentation:
- Projection for job growth in San Joaquin County is 3.4 (2015), 3.7 percent (2016) and 2.5 percent (2017)
- Sectors with the most job growth in the county are in education and health services, transportation and warehousing, and hospitality
- New home construction was disappointing in 2014, according to Michael but it’s expected to improve this year and construction activity over the next couple years is forecast to double compared to 2015
- Job losses have been in the construction, finance, real estate and manufacturing sectors.
Globally, the outlook is mixed, Bank of the West’s Anderson said. Emerging economies are suffering from the drop in oil prices, and U.S. manufacturing is slowing.
“The world economy is really just muddling along,” Anderson said.
While the strong U.S. dollar isn’t helping American manufacturers export their products, there are still bright spots in the economy, according to Anderson. With 2.6 million jobs created in the last year, the United States is close to full employment.
U.S. gross domestic product growth has been steady and is forecast to be 2.4 percent in 2016, Anderson said.
In addition, personal income growth is running above 4 percent. Spending had been rising, but Anderson said it was has slowed recently as households are apparently saving the windfall they got from lower fuel prices. He believes consumer spending will grow 2.9 percent
“The U.S. economy is in much better place fundamentally than this time last year,” Anderson said.
As far as interest rates, Anderson said he is not as optimistic as the Federal Reserve but not as pessimistic as the markets. He believes there will be three more increases, starting in the second quarter of this year but that they will be gradual.
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