Sacramento Business Review predicts subdued economic growth
08/01/2012 12:00 AM
08/01/2012 8:03 AM
Sacramento's job market just recorded its strongest month since 2006. Housing prices are steadily creeping up after a historic slide.
But forecasters at the Sacramento Business Review are far from convinced that the region's economy is finally starting to hum.
The latest edition of the review, produced by Sacramento State's College of Business Administration and the Chartered Financial Analyst Society of Sacramento, predicts another few months of so-so economic gains.
"We continue to expect local economic and employment growth to be subdued over the rest of 2012 and into early 2013," said the forecast, which is to be released today.
Sanjay Varshney, the university's business dean and a forecast co-author, said in an interview Tuesday that the region's economy bottomed out last year but still isn't performing as it should.
Although payrolls grew by 9,400 jobs in Sacramento in June, the best in six years, "the job growth we're seeing is not sufficient," Varshney said. "It's still not at the level that you would want to see at this point in time."
The forecast calls for unemployment to remain "in this low double-digit range for the rest of the year."
Varshney said business executives are holding off on hiring, in part because of uncertainty about the presidential election. Another cloud is the state budget, which continues to put a strain on Sacramento's single largest employer.
"Things are definitely better, but the question is, how much better?" he added.
As for another big sector of the economy, he acknowledged that home-sale prices have improved moderately in recent months. But he said he isn't sure that the overall real estate market has "found a floor."
"In general, we don't have a very strong or very stable real estate sector," he said.
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