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California leading nation in Q2 growth

Expert says recovery is real in Santa Clarita

Posted: June 6, 2013 2:00 a.m.
Updated: June 6, 2013 2:00 a.m.

Voldi Way, left, and John Beck of WayForward in their Valencia studio in 2012. WayForward is a local tech company that creates video games. It has continued to grow through the recession and reached more than 100 employees last year.

 

When Santa Clarita’s April jobless rate dropped to the lowest rate in five years — the city’s improving economic picture mirrored statewide forecasts by economic experts on Wednesday.

Santa Clarita’s April unemployment rate dropped to 5.7 percent. It had peaked at 8.3 percent in July 2010.

“Santa Clarita is seeing a faster recovery, as evidenced by our lowering unemployment rate and our increasing retail sales activity, which have rebounded from the worst of the recession more robustly than many other California communities,” said City Manager Ken Striplin.

California is leading the nation in recovery, according to the UCLA Anderson Forecast’s second quarter 2013 economic outlook report.

“We are seeing businesses continue to invest in Santa Clarita and that momentum is keeping Santa Clarita ahead of the curve of this recovery,” Striplin said.

Despite good news for the Golden State, however, the U.S. economy is not recovering at the levels needed for a robust recovery, said Ed Leamer, UCLA Anderson Forecast Director.

Citing low GDP growth rate, Lerner said that while the economy is improving, the 3 percent growth rate is not enough.

The nation would need to hit between a 4 and 6 percent growth rate to truly recover from the recession, he said.
As the economy continues to improve, however, California will “benefit from a disproportionate share of the improvement,” the experts said.

The state’s job growth has remained in the top 10 states and in April the only state where employment grew faster was Utah, said Jerry Nickelsburg, senior economist.

While job growth in California has been widespread across industries, sectors accounting for more than half the job growth in the state lie in the state’s technology and “knowledge-laden” sectors, Nickelsburg said.

“The recovery is real in Santa Clarita,” said Jonas Peterson, president and CEO for the Santa Clarita Valley Economic Development Corporation.

Although the organization has only existed for three years, it managed to attract some new companies to the SCV during the recession and reports activity is stepping up.

“We’re seeing our highest level of deal flow ever at the economic development corporation and are anticipating a couple more significant announcements from new businesses next quarter,” Peterson said.

As in past recessions, where the housing sector has led the recovery, the same trend is seen in today’s construction sector, he said.

“As job gains accumulate, household formation rates increase and the demand for housing, finally, is generating new residential construction,” Nickelsburg wrote in his report.

Locally, Santa Clarita’s city manager said in May that he believes much of the city’s improving job rate is tied to improvement in the real estate market.

“We think this is attributable to a strengthening local economy and more activity in real estate,” Striplin had said.
Considering the population and economic growth in Los Angeles, the region has a relatively low supply of homes compared to other cities, said William Yu, economist with UCLA Anderson forecast group.

Based on his research, Yu believes a “reduction in unnecessary regulation barriers” and an improved public transportation system are key to creating a greater supply of homes.

The “genuinely good news is that we are in the early stages of a real recovery in housing,” Leamer said.
“Housing starts, which fell to a historic low of 550,000 in 2009, will climb back to the normal 1.5 million by 2015,” he said.

Home prices are rising and housing starts have approximately doubled from their depression lows of a few years ago, reported David Shulman, senior economist with UCLA Anderson Forecast and UCLA Ziman Center for Real Estate.

 

 

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