UCLA study: Slow going through the end of the year
The Anderson Forecast, a widely watched outlook for both California and the nation, predicted “normal growth" for the U.S. economy through 2013, with "normal" defined as 3% GDP growth but unemployment stuck at high rates.
The June 2011 report, published by economists at the UCLA Anderson School of Management, called for slow growth through the end of the year in California, as the state attempts to re-generate the 1.3 million jobs lost in the recession.
UCLA senior economist Jerry Nickelsburg cited two key elements impeding California's recovery. The first lies in the national forecast, which calls for slower growth in consumer spending. The second is a shift occurring in the residential construction sector.
The shift in residential construction is rooted in demographics and geography, Nickelsburg said. The demographic shift, confirmed by the 2010 census, suggests a significant shift in demand toward condominiums and apartments. As a result, future construction will move toward multi-family units. This will hurt inland California because workers are less likely to move inland into an apartment and commute toward the coast. Fewer construction workers are required to build multi-family units, according to the forecast, and the inland areas of California are more dependent on construction to fuel their regional economies than coastal areas.
“Taken together, these shifts are going to be a significant drag on inland California economies that in turn becomes a drag on the state's economy as a whole,” the report said.
The forecast calls for 1.7% employment growth in 2011 in California, 2.4% in 2012 and 3.1% in 2013.