ECONOMIC FORECAST
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Chapman: The worst of the recession is over
A mild recovery is on the horizon, according to annual midyear economic update.
By Tina BorgattaPublished: June 17, 2009 11:51 AM
Median home prices are close to bottoming out. Banks are easing up on lending standards. The stock market has seen an 18 percent rise over the last three months. And there are signs indicating that the government’s stimulus plan is reigniting – albeit slowly – consumer confidence.
It all signals that the worst of the recession is behind us. That’s the gist of what Chapman President Jim Doti and Economist Esmael Adibi told the 700 business professionals who attended their midyear economic forecast today at the Hilton in Costa Mesa.
Some challenges remain, however. And our economic recovery will be a slow one, they said.
We probably won’t see positive job growth until the third or fourth quarter of next year. And while the residential market is showing some signs of recovery, the commercial real estate sector likely won’t rebound for another three or four years.
In addition, a shift in consumer saving habits has kept spending – historically a critical factor in economic recovery – at bay.
“Something different is happening this time – the rebuilding of consumer balance sheets,” Doti said. “The saving rate has gone up from zero, and it was there for a long time, up to a rapid rate of 6 percent.”
But that’s not surprising, given the length and depth of this economic downslide, which many are now calling The Great Recession. Doti described its onslaught and prolonged decline as “a vicious cycle that kept getting worse and worse and worse.”
We all know the cause by now. It started with the collapse of the mortgage industry in 2007. Construction stopped, home prices fell, unemployment began to rise. The gloom began to creep into professional services sectors, and the architectural, legal and accounting industries joined in the suffering. Employment growth has even slowed in education and health services – areas that many predicted would weather the storm without too much damage.
And, as ground zero in the mortgage industry catastrophe, Orange County was the first to feel the pain. The region has been in recession for two years now, Adibi said, and the jobless rate has been the worst in recent history, exceeding the 1991 and 2001 recessions.
But, Adibi noted, Orange County has fared relatively well compared to other regions in the state. Orange and San Francisco counties fared better than any of the other eight metropolitan areas in California.
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Related headlines
'OC METRO Minute,' June 17: Chapman University's midyear economic forecast
'OC METRO Minute,' June 16: Chapman gears up for economic forecast
Consumer confidence hits highest mark in more than a year
Readers Feedback:
I don't believe Doti or Adibi. They say recovery will be from stimulus money and raising taxes. I doubt it will be sustainable.
Comment at 6/17/2009
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It all signals that the worst of the recession is behind us. That’s the gist of what Chapman President Jim Doti and Economist Esmael Adibi told the 700 business professionals who attended their midyear economic forecast today at the Hilton in Costa Mesa. Some challenges remain, however. And our economic recovery will be a slow one, they said. We probably won’t see positive job growth until the third or fourth quarter of next year. And while the residential market is showing some signs of recovery, the commercial real estate sector likely won’t rebound for another three or four years. In addition, a shift in consumer saving habits has kept spending – historically a critical factor in economic recovery – at bay. “Something different is happening this time – the rebuilding of consumer balance sheets,” Doti said. “The saving rate has gone up from zero, and it was there for a long time, up to a rapid rate of 6 percent.” But that’s not surprising, given the length and depth of this economic downslide, which many are now calling The Great Recession. Doti described its onslaught and prolonged decline as “a vicious cycle that kept getting worse and worse and worse.” We all know the cause by now. It started with the collapse of the mortgage industry in 2007. Construction stopped, home prices fell, unemployment began to rise. The gloom began to creep into professional services sectors, and the architectural, legal and accounting industries joined in the suffering. Employment growth has even slowed in education and health services – areas that many predicted would weather the storm without too much damage. And, as ground zero in the mortgage industry catastrophe, Orange County was the first to feel the pain. The region has been in recession for two years now, Adibi said, and the jobless rate has been the worst in recent history, exceeding the 1991 and 2001 recessions. But, Adibi noted, Orange County has fared relatively well compared to other regions in the state. Orange and San Francisco counties fared better than any of the other eight metropolitan areas in California. NEXT PAGE >> Related headlines 'OC METRO Minute,' June 17: Chapman University's midyear economic forecast 'OC METRO Minute,' June 16: Chapman gears up for economic forecast Consumer confidence hits highest mark in more than a year |
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Readers Feedback:
I don't believe Doti or Adibi. They say recovery will be from stimulus money and raising taxes. I doubt it will be sustainable.
| Comment at 6/17/2009 |
