IRVINE, CA-While growth of both the US and Orange County economies is expected to continue this year, the rate of growth will slow, but Orange County will continue to outperform the US as a whole, Jerry Nickelsburg, professor of economics at UCLA’s Anderson School of Management and senior economist with UCLA Anderson Forecast, tells GlobeSt.com. Nickelsburg was one of several speakers at the 2013 Orange County Economic Outlook, which took place here recently at the University Club, UCI.
During the presentation, Allen Matkins/UCLA Commercial Real Estate Orange County Survey results were discussed. As GlobeSt.com reported earlier this week, in response to those results, Nickelsburg told GlobSt.com, “What we’re seeing is vacancy rates are coming down and office-using employment is one of the growth areas. As unemployment decreases, office users will soak up more space and bring vacancy rates down, and that’s going to spur construction of new space.”
Although Orange County’s unemployment rate is below that of the US overall, Nickelsburg tells GlobeSt.com “that’s a little bit misleading because unemployment is measured by where people live, not where they work. The unemployment rate would be higher if you included people in other areas who commuted to Orange County for work.”
Nevertheless, we are seeing a boom in Orange County jobs, and California was number 3 in the nation in rate of job growth during 2012, tied with North Carolina and behind Florida and Nebraska, Nickelsburg says. “Part of that comes out of the job creation that occurred in Orange County.”
In discussing the housing recovery’s sustainability, Nickelsburg says we’re seeing a shift to multifamily housing, which makes sense since commercial vacancies are decreasing in the area. “Orange County is filling up in some sense, so you would expect more multifamily housing. The demographics are good, although household information has been very subdued in the last few years. But [grown] kids are moving out, people who are doubled up are getting their own places and this will build on itself. We will some positive movement in construction employment, and we expect that to continue.”
Nickelsburg says the technology-laden sectors are leading the recovery and have been doing so since its beginning. “Also, since the dollar is weak, there are more international tourists coming to the US, and this influences Orange County because of Disneyland and other tourist attractions here.”
The outlook is that a general slowdown in growth rate is in the cards for the US, and Orange County is an important part of that. “We want to be careful with the words,” says Nickelsburg. “Growth is expected to continue, but not accelerate in 2013. It’s still growth, but it’s going to be a slow-growth year because we have adjustments with federal and state budgets, new taxes and the like. This will slow economic growth, and it will take some time to work its way through the system.”
Gradual improvement in the economy is expected as we move into 2014 and 2015, and Nickelsburg says “we expect Orange County will be outperforming the US throughout that forecast.”