The San Joaquin Valley economy continues to trend upward following the Great Recession that began in 2008 — with employment reaching an all-time high in the third quarter of 2013 and the economy expected to exceed pre-recession levels by 2016 — according to a report by Gökçe Soydemir, the CSU Stanislaus Foster Farms Endowed Professor of Business Economics.
Soydemir recently released a midyear update to his third annual Business Forecast Report, which was originally published in December. Among the highlights from Soydemir’s findings in the update, available for free online, are:
- Total employment in the Valley registered slightly above 1.6 million in 2013, with construction employment growing the fastest and retail trade employment showing the most remarkable growth. Soydemir said the total employment growing by 1.63 percent was typical long-term behavior, making steady increases likely over the next two years.
- Home values continue to climb sharply, increasing by more than 18 percent in 2013. While significant increases are expected to continue — with a projection of 20 percent annually through the first half of 2016 — they are likely to settle into a steadier rate of growth in the years to follow. Housing permits also grew significantly in 2013, and foreclosures dropped to pre-recession levels and are projected to remain low.
- While employment in the Valley has shown strong growth, the same cannot be said for wages. After posting increases of 2.02 and 1.55 percent in 2011 and 2012, respectively, average weekly wages in the Valley dropped by 0.04 percent in 2013. Projections for the next two years point to small increases of about 0.15 percent per year.
- Bank deposits continued to grow at a steady rate of 4.64 percent in 2013, similar to the growth rates of 2011 and 2012. While still below the 10-year benchmark rate of 7 percent, the 2013 growth was significant enough to extend loans and leases to finance continuing economic recovery in the Valley.
- Incoming numbers as of the first quarter of 2014 have not reflected the impact of drought to a significant degree. However, the impact is already being felt in higher meat and dairy prices at the grocery store. With conditions already bad, another year of drought may derail farm-related business indicators.
The Business Forecast Report provides projections for the Valley’s labor market; regional housing conditions; prices and inflation; banks and other depositary institutions; and capital markets. Soydemir looks for data that signal “turning points” and offer clues to future performance. He and his team use a unique forecasting model that produces lower and upper statistical confidence bands; actual results are expected to fall within this range.
Soydemir joined CSU Stanislaus as the Foster Farms Endowed Professor of Business Economics in 2011. He brings strong expertise and experience in business analysis and forecasting and has published extensively on applied econometrics, regional economics, financial forecasting, market analysis and international finance.