Any hopes of starting the New Year with a more optimistic outlook were crushed Monday by experts presenting next year’s economic forecast.
The UCLA Anderson Forecast's outlook revealed slow growth for California in 2012 that will likely extend into 2017.
Local economists say we can expect the same slowness here.
In San Diego, unemployment will likely dip down slightly next year, but it will still hover at around 9 percent, said economics professor Alan Gin, who compiles San Diego’s index of leading economic indicators.
About 9.7 percent of the labor force is unemployed in San Diego as of the end of September, Gin said.
“It’s a little bit of movement but the situation is still pretty bad,” Gin said. The job growth barely keeps up with the growing labor market.
Following along with the unemployment rate, home prices may weaken as well. Median home prices in San Diego will decline an additional 4 percent next year, the report states.
Yet, with incentives such as the Obama Administration’s tax credit for first time homebuyers, housing should pick up next year. Already since April 2009, prices for homes have increased, Gin said.
Two sectors of San Diego’s job market are rising above the rest of the country: leisure and entertainment and professional and business services. Since San Diego is both a vacation spot and a hub for technological advances, these sectors will thrive. On the other hand, manufacturing will decline in San Diego even as it rebounds in the rest of the country.
Compared to the rest of the state, San Diego’s unemployment rate is low. Inland California cities will continue to see the highest unemployment rates in the state. This is because there is an excess of housing and a “contraction in government employment.”
The disparity between Coastal and Inland economies is so large, author Jerry Nickelsburg called the regions “two Californias” in his chapter of the report.
The San Joaquin Valley saw net job loss of -1.1 percent in the last four months, compared to the Bay Area, San Diego and Orange County’s averaged annualized growth of over 1.7 percent, according to the report.
The report concluded on the cheery note that the U.S. is not facing another recession, as many have predicted. GDP will grow between 2.5 percent and 3 percent by the middle of 2012, and about 150,000 jobs will be created per month, the report states.