The economic forecast for the Sacramento region is better than that of 2009 but it is still precarious, and job losses are expected to continue at least through most of 2010 according to the Sacramento Business Review.
“Although economists have already declared the official end of the national recession, we believe that the Sacramento region will lag behind the rest of the country in emerging from the recession,” Varshney says.
The Review, now in its second year, has hit the mark in its previous economic forecasts including a prediction in early 2009 that Sacramento’s unemployment rate would approach 13 percent by the end of that year.
“The unemployment rate for the Sacramento region has steadily climbed to 12.4 percent (as of November 2009) with a loss of nearly 83,000 wage and salary jobs since June 2007 and a loss of 43,800 jobs over the last 12 months,” Varshney says.
The dean says Sacramento has likely already seen the worst of the job losses and believes the regional economy is starting to show early signs of recovering. The bad news, he says, is that the recovery, particularly as it relates to the employment picture, will likely be very gradual over the next two years.
”We forecast that the unemployment rate in the Sacramento region will reach 13.5 percent in early 2010 with an improvement in the employment picture unlikely until later in the year,” he says. ”Even then, we expect the unemployment rate in the region to remain elevated through 2012.”
The Review also reports on emerging trends and forecasts in the areas of capital markets including the stock market, corporate performance, and real estate that includes housing.
”While virtually all of Sacramento’s banks have thus far survived the residential mortgage crisis, some may not be so fortunate in 2010 now that problems have migrated toward commercial real estate loans,” he says. “We continue to see formidable headwinds to the local economic and employment recovery, including moderate growth expectations, tight credit, excess capacity and consumers still looking to deleverage and rebuild wealth.”
The new issue of the Review is available online at http://www.sacbusinessreview.com. A printed version will be available at the College of Business Administration.