TURLOCK, Calif. — May 23, 2013 — Positive signs throughout the San Joaquin Valley's economic landscape point toward continued recovery, according to a report by Gökçe Soydemir, the Foster Farms endowed professor of business economics at California State University (CSU), Stanislaus.
Soydemir today released a midyear update to his second annual Business Forecast Report, which was published in November. In the update, Soydemir predicts continued economic recovery buildup in the Valley through the middle of 2015, with employment projected to grow steadily over the next two years. Among the highlights from Soydemir's findings (view the full report):
- Employment growth in all sectors except government showed recovery in the first half of 2013, with construction and manufacturing jobs showing the most growth. All sectors are expected to grow over the next two years. Additionally, total employment has grown with varying speeds in every San Joaquin Valley county over the past year.
- Housing prices continue to improve, with an expected increase of at least 5 percent annually over the next two years. These improvements are leading to an increase in consumer wealth and confidence, which should positively impact overall spending on goods and services.
- Federal budget sequestration is not likely to be immediately felt in the Valley but may inevitably put a drag on economic recovery in the long run. The sequestration effects are also countered by measures taken by the Federal Reserve — measures that will continue until the national unemployment rate falls below 6.5 percent (likely around 12 percent for the Valley, a level Soydemir projects will be reached in the first half of 2014).
- Bank assets that are past due displayed their sharpest decline since the end of the recession in January 2009, an indication that the health of consumers' balance sheets continues to improve.
The Business Forecast Report, available for free online, provides projections for the Valley's labor market; regional housing conditions; prices and inflation; and depositary institutions and capital markets. Soydemir looks for data that signal "turning points" and offer clues to future performance.
Soydemir 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. The 2012 forecast had an overall accuracy of more than 97 percent based on actual data collected in March, according to the midyear update.
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.