Unemployment will dip as the labor force grows, construction will increase and California’s population growth will remain below 1 percent, according to a recent economic forecast.
The Center for Business and Policy Research at University of the Pacific’s Eberhardt School of Business recently released its “2017-2020 California and Metro Forecast,” detailing the future of state and local economic trends.
According to the forecast, California’s economic growth has slowed, but is expected to continue to expand steadily at 2.5 to 3.0 percent. Payrolls will also grow at about 1.5 percent over the coming two years.
Hot topics such as healthcare and the twin tunnel project (California Waterfix) were not shied away from in the forecast.
“The Trump administration has not been as disruptive to the healthcare system or international economy as initially feared, both of which are positive developments for California,” the report states. It also states that the president’s tax reform package would likely meet with the same resistance as healthcare reform “due to vested interests and concerns about the federal debt.”
The Center for Business and Policy Research reaffirms in the publication why the so-called Waterfix would be terrible for the Central Valley environment and economy.
“The cost of the water that would be supplied by the Delta is far beyond what could be supported by agriculture, and the need to generate cash for bond payments estimated at $1-2 billion per year would forces substantial transfers of water from agriculture to higher-paying urban areas in Southern California,” the forecast states.
If the region was selected by online shopping giant Amazon for its second headquarter location, it could add as many as 50,000 jobs, as reported in the forecast.
Legal recreational cannabis could boost the statewide economy in 2018, producing an estimated 100,000 jobs, according to the forecast.
Among the highlights of the forecast are:
- Real gross state product forecasted to grown 2.9 percent over the next year, with low risk of recession.
- Statewide unemployment, which sits at about 5 percent, is forecasted to stabilize just below that percentage for the next three years.
- The labor force is predicted to grow 1 percent annually until 2020.
- Healthcare will add about 40,000 new jobs over the next year.
- Growth in the professional scientific and technical services sector will slow to 22,000 jobs over the next year.
- Construction activity will continue to grow at a rate 4 percent over the next three year, adding some 35,000 new jobs.