Chapman University’s Outlook for Orange County’s Economy Positive for 2018
Chapman University, the nationally recognized Economic Forecast Conference utilizes the faculty and student developed Chapman Econometric Model to analyze the California economy and greater global economic trends to provide national and local businesses and organizations with the information they need to make more effective planning and investment decisions.
Thanks to encouraging jobs trends Chapman economists project a local hiring spree approximately triple the original estimate for employment increases. Here are a few highlights of what Chapman economists are saying about the local economy.
Orange County job growth has averaged 38,500 positions a year from 2012 to 2017. If Chapman’s new outlook is correct, roughly 42,000 jobs will be added in 2018. That would mean bosses added 272,000 jobs in seven years, just 9,000 fewer than the 1995-2001 boom era.
It is unsure if the new federal income tax schemes may hurt Orange County home prices, but with limited supplies of homes to buy Chapman forecasts local housing appreciation will finish 2018 at 5.2 percent.
Local manufacturing has been rather lackluster, but Chapman says it’s a split picture: Big losses of lower-paid work, primarily in apparel and food, with growth in certain better-paying niches making durable goods. Two Orange County factory sectors have ended: Aerospace products and parts (typical annual salary of $125,476) and medical supplies and equipment ($80,964). Cold segments: Textile-product mills ($45,000) and fruit and vegetable preserving ($54,300).
Statewide, Chapman sees a sluggish manufacturing sector more than offset by new information services jobs and “the cyclical and volatile construction sector.” California’s employment growth is forecast to finish 2018 at 1.5 percent. The top annual wage earning industries in Orange County in 2017 were Information ( $101,088) and Financial Activities ($96,512) with the lowest annual earning was in the Leisure and Hospitality industry.
California’s biggest risk in Chapman’s eyes are threats to curtail North American trade relations. Chapman says Mexican imports, while seen by some critics as an economic weakness, are actually a jobs machine for California employers. If President Donald Trump dramatically restricts regional trade pacts, Chapman estimates California will lose 280,000 trade-related jobs over five years.
Nationally, Chapman sees little chance of U.S. economic growth hitting the much-coveted 3 percent annual expansion rate with gross domestic product growth forecast to run at 2.2 percent for 2018. Although cumulative growth during the current expansion has been only 14.4 percent, it is now the second longest on record.