Economist Chris Thornberg said tourism and consumer spending are driving San Luis Obispo County’s recovery. But don’t expect large jobs gains for at least the next two years.
Speaking at the Central Coast Economic Forecast in Paso Robles on June 7, the Beacon Economics founding partner said he expects the county’s total employment to be up less than 2 percent over the next two years. Taxable sales are expected to pop 4 percent during that time, continuing the bounceback in consumer spending felt around the country.
SLO County home prices are expected to climb 6 percent over the next two years, Thornberg said, signaling that the real estate meltdown is truly over. But he also cautioned against rising home prices, saying that California’s high cost of living is making it a tough place for young professionals to live.
More expensive housing means that it is in turn “more expensive to run a business and a government,” he said, as workers have to be paid much more. “If you want people to own a home in California, stop making the banks into the bad guys and focus on making housing in the state more affordable,” he said.
California is experiencing job growth, especially around the San Francisco Bay Area and Silicon Valley, he said, where office jobs have bounced back significantly. But well-paying manufacturing jobs are suffering, in large part due to the state’s onerous environmental and work place rules. “I understand we want to have a clean environment here in California, but we also want to have these manufacturing jobs,” he said.
Much of the job growth in San Luis Obispo County, for example, has been in relatively low-paying farm sector jobs.
That means affordability is an issue. The priciest city in Texas is Austin, he said, where the median price of a home is about $190,000. In San Jose, it’s $549,000; in the San Francisco-Oakland corridor, $462,000. In San Luis Obispo County, the average price of a home is $458,000.
Those price differences make it hard for Californian cities such as SLO to compete for head-of-household jobs, he said.
Area business leaders agreed. Retaining talented young workers remains one of his biggest challenges, said Ty Safreno, founder of San Luis Obispo-based robotics company Trust Automation. Safreno sat on a panel alongside Kevin Meyer of Specialty Silicone Fabricators and Tom Jones of Pacific Gas & Electric.
“There’s an issue with San Luis Obispo County retaining young people,” Safreno said. “You get talented people moving on, for love and for other things,” he said, noting that young engineers at the firm sometimes choose to leave SLO County for larger metro areas where significant others are more likely to find jobs as well.
Meyer said his firm, which is moving in to a new 120,000-square-foot facility next to the Paso Robles Airport, is in a “nice a business that’s immune to a lot of economic issues” and that has grown its approximately 220-person work force through the recession. Even so, he agreed that retaining workers can be difficult. “There’s not much of a business ecosystem in the area,” he said.
On the national level, the U.S. economy faces headwinds in the form of fiscal reform and a trade deficit. Recent slowdowns in GDP and industrial growth are cause for concern, Thornberg said, although he is “still an optimist.” The Eurozone debt crisis is also having spill-over effects, most noticeably as exports to European nations has stalled.
The Central Coast Economic Forecast was held at the Paso Robles Event Center and hosted this year by the Atascadero and Paso Robles chambers of commerce.