Forecasting the economic future of the Central Valley

June 1, 2013

 

By LINDA NOWAK
Business Journal columnist

Forecasting the future of business in the San Joaquin Valley can be challenging. Technological change can shift the demand for various products.

Geographic preferences and legislation could lead to business relocations. Global uncertainty continues as many countries struggle to gain a footing in the economic downturn of the last several years. Although some indicators point to a slow, steady increase in economic growth, this growth can still be tenuous at best.

The U.S. unemployment rate has fallen to 7.5 percent; however, one in every five new workers is being hired as a temporary employee, indicating that companies are still unsure about the future. The key to sustaining any growth will be in identifying advancing industries and taking innovative steps to ensure their long-term economic health. We are competing in a global economy and much of our responsibility in the College of Business Administration at CSU Stanislaus is to prepare our students to be flexible, analytical and responsive to changes in the business environment.

For those of us searching for clear signs that our region’s economy is recovering, there is hope. Gokce Soydemir, the Foster Farms Endowed Professor in Business Economics at CSU Stanislaus, has just completed his midyear Business Forecast Report. He analyzed data from eight counties: Fresno, Merced, Madera, Kings, Kern, San Joaquin, Stanislaus and Tulare. His research indicated that the Central Valley’s employment outlook continued to improve in the first half of 2013.

In 2012, employment in the Valley grew 1.92 percent, twice the rate of the previous year. All categories of employment, including construction, education and health, manufacturing, leisure and hospitality, trade, transportation and utilities, retail, wholesale information services, and financial sectors continued to create jobs in the Valley. And the encouraging news is that modest employment growth is expected to continue in 2013 and 2014. Construction employment experienced the strongest recovery and grew at a rate of 9.6 percent in 2012. It is expected to increase at a rate of 10.4 percent in 2013 and 11.0 percent in 2014.

The only category in which job growth remained stagnant was in government related jobs, but this situation is expected to improve slightly in 2013. Central Valley housing permits reached their lowest in 2011, and in 2012 they increased at a rate of 16.77 percent. Single-family building permits are expected to grow at a rate of 13.96 percent in 2013 and 15.34 percent in 2014. And as interest rates continue to remain historically low and demand for housing increases, home prices are expected to increase at a rate of 4.75 percent in 2013 and 7.25 percent in 2014.

Our region’s educational institutions are vital to the economic recovery of the San Joaquin Valley. The College of Business Administration at CSU Stanislaus continues to evolve its curriculum to ensure that its students are getting the proper skills needed to compete in the workplace. We are seeing strong demand for degrees in accounting, finance, human resource management, information technology, marketing and operations management.

Graduates with strong technical skills, written and oral communication skills, critical thinking skills, and leadership skills are highly valued. Competition for jobs still remains very high, and we encourage our students to attend our networking and career nights to meet local employers. Internships become even more important, giving students the chance to obtain on-thejob training before they graduate.

Recent feedback from our local employers has indicated that not only are specific technical skills important, but people skills are critical. In this competitive business environment, excellent customer service is key. And employers want strong writing skills, even in the field of accounting.

Master of Business Administration (MBA) and Executive MBA programs have become even more important for career progression, teaching higher-level analytical, communication and leadership skills in a very interactive classroom environment. Students are able to immediately apply their newly acquired skills in their jobs. CSU Stanislaus offers three ways to earn a MBA degree: evenings, Saturdays and online. For more information, contact Claudia Manzo at MBAProgram@csustan.edu.

The Central Valley’s employment projections are looking very positive. But it is not just about the numbers — it is about all of us focusing on training a skilled workforce for the competitive environment in which we find ourselves.

We are now competing with companies halfway across the globe. Our businesses must be able to meet that challenge.

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