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Friday, Jun 2, 2023

Economic Summit Predicts Continued Job Growth, Falling Housing Prices

The economic climate in the San Fernando Valley remains robust, despite falling housing prices, a shrinking skilled-labor pool and low industrial vacancy rates, according to economists who spoke at the 2007 San Fernando Valley Economic Summit at the Universal Sheraton May 17. Job and retail growth in the San Fernando Valley will stay strong, with new jobs expecting to grow by 1.5 percent in the region, according to Dan Blake, director of the Economic Research Center at California State University, Northridge. The university and the Economic Alliance of the San Fernando Valley co-hosted the summit. “It’s good news mostly across the board,” said Blake. “For home prices, relief is here. For renters, relief isn’t there yet. They’re still feeling the heat.” According to Blake, there were 693,000 wage and salary jobs in the Valley in 2005. Currently, there are 30,000 more jobs than there are residents to fill them. The new jobs are mostly being filled by people commuting to the Valley from other areas. “The Valley is no longer a bedroom community,” Blake said. Wage and salary growth in the private sector is expected to increase 3 percent to 4 percent a year, and retail sales are expected to grow 1.7 percent, according to Blake. The information industry, which includes the entertainment sector, will grow by about 4 percent each year through 2009. Manufacturing, which was hit the worst by an economic downturn earlier this decade, is expected to drop 0.9 percent this year and continue its downward spiral through 2009. Construction is expected to drop 4.5 percent this year. Despite 7,500 fewer births in the area each year, the number of Valley residents is continuing to grow due to a high influx of immigrants. Those trends are expected to continue, Blake said. But there aren’t enough homes to house the expanding population, with a shortage of 15,000 homes each year, he said. “Housing prices have started to matter in terms of in-migration,” Blake said. The economist predicts jobs growth in the Valley to decrease slightly to 1.4 percent in 2008, with 10,000 jobs being created each year. “This is a Valley of small businesses,” he said, with 90 percent of businesses having less than 25 employees. According to a survey that polled key industries in the Valley, 23 percent have considered moving out of the San Fernando Valley because they “see no advantage to staying here,” Blake said, adding that bureaucracy and high housing prices are affecting businesses. According to the economist, the lack of industrial space will also have an impact on employment. In the Valley, office vacancies are at 6.8 percent vs. 13 percent nationally. Jonathan A. Weiss, senior investment associate with Marcus & Millichap Real Estate Investment Services, echoed Blake’s positive economic forecast. Although many people are claiming the United States is in the grip of a recession, the economy is still fairly strong, Weiss said, with 1.8 million new jobs having been created in the U.S. Retail property demand in Los Angeles County will continue to be the strongest in the nation, especially in the San Fernando Valley, Weiss said.

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