Economic forecast details slowing growth, hastening downturn

Dr. Jeffrey Michael, director of the Center for Business and Policy Research at University of the Pacific, addresses attendees of the San Joaquin County Hispanic Chamber of Commerce Business Forecast on Jan. 3.

STOCKTON—What does the economy of San Joaquin County have to do with Calaveras County? Quite a lot, actually.

The San Joaquin County Hispanic Chamber of Commerce hosted its ninth annual Business Forecast Conference Jan. 3 at University of the Pacific. A packed room of economic and business experts gathered at the event to discuss the global, national, state and local economies. The outlook? Mixed.

“Stockton is to the foothill communities what the East Bay is to Stockton. There’s a lot of people,” said Dr. Jeffrey Michael, director of the Center for Business and Policy Research at UOP. “Calaveras County is fewer than 10,000 payroll jobs right there. There’s a lot of people commuting into Stockton and San Joaquin County for employment on a daily basis, so they’re very connected to one another. Job prospects here affect a lot of people in Calaveras County.”

That’s especially true in the arena of ecommerce. During his presentation on the state and local economy, Michael pointed to logistics and transportation being the biggest job growth areas. Due to its proximity to the Port of Stockton, railway systems and highways, San Joaquin County is rife with fulfillment center prospects.

With more such fulfillment and distribution hubs on the horizon, those jobs will be a draw for plenty of neighboring regions. Jobs have grown in San Joaquin County 3.1 percent over the past year compared to 1.9 percent statewide.

Dr. Scott Anderson, chief economist for Bank of the West, said the risk of recession across the nation and the globe by 2020 is “substantial.”

“Everything always looks the best before things kind of fall apart,” Anderson said. “But it doesn’t mean it’s going to happen this year.” He did point out, however, that the explosive growth of the past year or so is starting to slow, signaling a trend toward a declining economy. He said 2018 was, “as good as it gets.”

One area that has shown signs of recession is home building. Developers are showing less confidence. That is not the case in San Joaquin County, Michael pointed out. Several developers continue to build new homes throughout the region. The only thing lacking is a skilled workforce, much of which left for other states when the housing bubble burst.

As far as job growth in Calaveras County goes, one area that could see growth is the tech sector, depending on the jobs. According to Michael, tech and other industries can benefit from remote workers if the connectivity is there.

“There are some people that can work that way,” Michael said. “They’re not necessarily tech workers, but they’re knowledge workers of some kind; writers, consultants, researchers that have the ability to not be present in an office all the time. The connectivity is important, not necessarily for tech workers but for knowledge workers.”

According to the October business forecast report released by Michael’s department, nonfarm payroll jobs are expected to grow 1.6 percent in 2019 and slightly less at 1.2 percent in 2020 throughout California. That same report showed that scientific and technical jobs will increase by 60,000.

Unemployment, the forecast showed, will start to increase toward the end of 2019 after hitting a record low of 3.9 percent throughout the state. Unemployment in Calaveras County currently sits at 3.5 percent.

In Calaveras County, the most common jobs held by people are in administration, management, sales, construction and production, according to datausa.io, a statistics-based website. The most common employers in the county are in health care, construction, retail, education, manufacturing and scientific and technical services (which also happens to be one of the highest paid sectors in the county).

Though ag is an important industry in Calaveras, Michael said the traditional commodities aren’t going to be big factors in the overall economy.

“The large agricultural commodity in Calaveras has been cannabis. That’s just a fact,” Michael said. And there’s plenty that the crop generates. “You talk about cash revenues and economic impact and lots of social impact … and plenty of controversy.”

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