Sacramento State experts offer mixed forecast for region in year ahead

By Metro Chamber|January 19, 2016|News Coverage|

Sacramento State economic forecast sees mixed job picture for 2016 Sacramento Business JournalThe year ahead will see continued job growth, but the lack of new private employers tempers the outlook, according to the Sacramento Business Review, an annual economic forecast issued by California State University Sacramento.

Authors are scheduled to present the forecast this afternoon to hundreds of business and civic leaders at the University Ballroom on campus.

As reported last month by the Business Journal, the region reached a full jobs recovery late in 2015, the report notes. Sanjay Varshney, a Sacramento State finance professor and the report’s chief economist, said 2016 will see continued employment growth.

But more will be lower-wage jobs in the retail and leisure and hospitality sectors — not the technology and manufacturing jobs that bring new wealth into a community, he said.

“A deteriorating job mix and absence of private-sector job growth makes (the local economy) fundamentally weaker. When you see a Dollar Tree or a Grocery Outlet replacing Safeway, it’s a change in the job mix,” said Varshney.

For the first time, the Sacramento Business Review includes a look at workforce gender, age and ethnic diversity issues by polling human resource departments in Sacramento. The findings include results of a survey of 100 organizations in the region.

One key point: “Women are significantly under-represented at the top management level” in Sacramento, at just 26 percent of C-suite and ownership positions. At the same time, however, the number compares favorably to 17 percent, the estimate from a recent national survey, the report notes.

Other portions of the report provide economic analysis and predictions about banking, real estate, capital markets and the small business economy. Some key points:

The region’s unemployment rate, while under 6 percent, remains higher than in most other metro areas in the West.

Banks should see loan volume grow by at least 10 percent this year.

Commercial real estate fundamentals are improving, and investment in the downtown core will continue in 2016.

Home prices grew by 8 percent last year, but the market may be cooling.

Confidence among small-business owners is softening.

Source: Sacramento Business Journal

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