By Rachell Newburn
Following is a high-level overview of the Central Coast Economic Forecast event in November 2017, which hosted over 500 business leaders. Particular attention is paid to the economies of SLO County, the state of California, as well as a national overview and how this forecast will affect business growth. Speakers include:
- Robert Kleinhenz, Ph.D., Economist and Executive Director of Research, Beacon Economics, LLC. Robert spoke to the economy of SLO County.
- Caroline Beteta, President and CEO, Visit California. Caroline spoke to the economy of California.
- Chris Thornberg, Founding Partner, Beacon Economics Director, UC Riverside Center for Forecasting and Development. Chris spoke to the national economy
Below is an overview of what I learned at the event, including some of my insight into how this information may affect the business operations at Collaboration from our own perspective and that of our clients.
SLO County Economic Forecast
SLO County currently has the lowest unemployment rate of any county in the Central Coast, at 3.6%, below the state average of 4%. Full employment has been reached as a region, meaning that businesses may have difficulty in finding a qualified employee for an open position. Ultimately, this makes it difficult for the region’s economy to grow further. On the other hand, the formation of new businesses is continuing to grow in SLO County. The good news is that this means Collaboration’s ideal clients are growing, with the majority of growth taking place in the manufacturing sector.
SLO County is hitting its upper limit of its economy due to the limit on jobs. It is essential for businesses to seek growth opportunities and find new ways to expand, which in turn will increase the economy. As Diablo Canyon nuclear plant faces closure within the next 10 years, approximately 1,500 jobs will be eliminated. Other industries must grow to pick up the slack, yet this does not mean a halt in the economy. Growth opportunities are forecasted for professional and technology services sectors.
Regional: California Economic Forecast
California is the #1 travel destination in America, with 23% of travelers visiting the state. The goal of Visit California is to create a desire for the California experience. After all, tourism drives businesses. Employment also hinges on tourism, with approximately 1 million Californians employed in the tourism industry. Tourism invests in infrastructure by attracting and retaining valuable businesses. As the state focuses on building transportation networks, there’s a potential for even more travelers (both business and pleasure) to come and spend their money in California.
National Economic Forecast
A great disconnect exists between the debates in the political sphere and the economic realities. In fact, the GDP is growing at a logical pace, there is no sign of a looming recession, incomes are rising, inflation is slow, and profits are high. While things are going well economically speaking, the true long-term challenges rest in state and local budgets, under-investment in infrastructure, looming labor shortages, and a broken tax system (among other factors).
The nation, much like SLO County, is running out of workers, NOT jobs. U.S. consumers are spending more, which drives the economy, but they should be saving more. On a national level, we should be concerned with the number of workers available, the tax structure, wealth inequality, unfunded government liabilities, a lack of public investment, slowing lending, and the supply of California housing.
We need to have the right conversation about the right things and embrace the art of compromising.
For business in SLO County, across the state, and across the nation, it’s important to keep your finger on the pulse of the opportunities and setbacks of the economy in which your business operates. As you work to fulfill empty job positions at your company, expect to see an influx of applications. Continue to market toward high-quality individuals who can help you achieve your company’s goals to improve your bottom line.