It’s all good news in terms of jobs, real estate and income levels for Los Angeles County – but for Ventura County, not so much.
That was the two sides of the local economy outlined by Santa Barbara-based economist Mark Schniepp, director of the California Economic Forecast, at his 2016 Entrepreneur Economic Forecast Conference held Thursday in Westlake Village. The event was sponsored by Calabasas commercial real estate brokerage Marcus & Millichap Inc.
Schniepp presented his analysis of the local Ventura County economy, and for the first time in the project’s 19-year history, expanded coverage to include certain L.A. County submarkets of the San Fernando, Santa Clarita and San Gabriel valleys and Central and West Los Angeles.
While job growth, construction, real estate occupancy rates and population growth are sharply rising in L.A. County, Southern California and even statewide, that’s not the situation in Ventura County.
“Ventura County is the lagging child of Southern California,” Schniepp said.
While the county has created jobs, is at nearly full employment and the unemployment rate has been falling, the economic growth is low in comparison to neighboring counties, he said.
Ventura County rebounded from the Great Recession in 2008 and 2009 with a nearly 5 percent growth in gross regional product, but it has since fallen to barely 1 percent in 2014 and below L.A. metro area levels, according to Schniepp’s data. Since then, gross regional product has been rising but is still below 2 percent – and way below that of the L.A. metro area.
“This year, all Southern California counties are on a path to eclipse Ventura County in the value of total gross output,” Schniepp wrote in his report.
The county has experienced several corporate downsizings and defections, Schniepp said, citing large layoffs at biotech giant Amgen Inc. in Thousand Oaks, and others that have left the area or shuttered, such as Ventura’s photography school, Brooks Institute. As a result, office vacancy rates at 18.5 percent are still “extraordinarily high” in the county, but improving.
Another factor he attributes to the county’s situation is SOAR, or Save Open Space and Agricultural Resources, a voter-approved, development-control mechanism, which is up for renewal in November. Renewal would result in even slower growth and high prices for homes compared to Los Angeles, Schniepp said.
“Housing activity (in Ventura County) will be austere,” he said, and household sizes will increase. There will also be “less job growth and less income growth.” compared to L.A. County and the state.
A principal issue over the last two years has been an abnormal decline in the Ventura County’s workforce age population. Those aged 25 to 64 years old have been leaving the area since 2011 – in tandem with companies that have been shrinking and leaving.
Comparatively, in L.A. County, “job creation has been spectacular,” Schniepp said.
The economist also spoke to what he says has been concerns over another pending recession, which has stemmed from economic growth of only about 1.6 percent.
That isn’t likely anytime soon, he said, based on the positive state of common economic indicators. Corporate profits have picked up in recent quarters; sales of automobiles and other vehicles continue to soar because people feel good about their income, and the same is true for home sales. Plus, debt levels for those purchases “are extremely tame,” Schniepp said.
“We really don’t have many imbalances or ballooning concerns,” he said.