Economy looks good, summit audience is told
LANCASTER — The overall economic picture nationally, statewide and locally for the Antelope Valley is a positive one, despite a few hiccups along the way, economist Mark Schniepp said.
Schniepp, director of the California Economic Forecast, presented his economic forecast Friday during the Antelope Valley Economic Development & Growth Enterprise’s 2024 Spring Business Summit, held at the AV Fair and Event Center.
“All in all, the forecast is relatively optimistic; we’ll see a slow down, things will get much better at the end of the year and going into 2025,” he said.
For the Antelope Valley, that optimism is based on new job creation, increased residential construction and growth in key sectors, including healthcare, manufacturing and professional services.
“That’s the bread and butter for the Antelope Valley,” Schniepp said.
Nationally, the growth seen in the past year-plus will moderate over the next six months, then accelerate, Schniepp said in his forecast, with inflation beginning to improve later in the year.
With the problems of the COVID-19 pandemic largely corrected, the major issues affecting the economy now are inflation and high interest rates, global anxiety and the upcoming presidential election, he said.
Nationally, the economy has avoided the much-predicted recession following the COVID-19 pandemic, “at least so far,” Schniepp said.
The economy saw positive growth through all of 2023 and the first quarter of this year. “That completely went against everybody’s prediction
of recession,” he said. Interest rate hikes seem to have ended, although rates remain high, as are inflationary prices on staples such as gas, food, car insurance and repair and other services, he said.
Still, consumer spending, adjusted for inflation, continues to climb, although it has not completely rebounded to pre-2020 levels. This shows that consumer confidence has turned from its previous pessimism, Schniepp said.
Record highs in the stock market have contributed to that confidence.
In California, the economy also continues to expand, “but we’re seeing a few leaks in the dikes,” he said.
The state has seen less job creation since the pandemic than elsewhere and has unemployment rates higher than nationally.
High housing costs, with very low inventory a factor, continue to be an issue for the state economy and contributes to net population loss through migration, Schniepp said.
While the stock of existing housing is extremely low, the new housing market has risen to the second-highest level seen since the pre-2008 housing bubble, he said.
“We’re building a lot of new houses in California,” he said, leading to increases in construction jobs.
Healthcare, however, is the biggest job creating industry in the state, burgeoning since the pandemic. Other industries seeing meaningful increases are computer electronics, aerospace parts and medical device manufacturing, all high-skilled manufacturing jobs.
The statewide outlook is reflected locally for the Antelope Valley. Unemployment is higher here, at 7.2% in the Los Angeles County portion of the Valley, and 15.1% in the Kern County portion.
The majority of jobs in the area are in the public sector, Schniepp said, although there is a higher number of those self-employed here than in other areas.
Of little surprise to those who have seen the Antelope Valley Freeway at rush hour, about 42% of the employed population faces commutes of 30 minutes or more.
While the Kern County portion has higher unemployment, it is also seeing growth in manufacturing jobs. “It’s been onward and upward, completely defying the trend we are seeing elsewhere in California,” Schniepp said.
Similarly, manufacturing jobs at Air Force Plant 42 in Palmdale and BYD in Lancaster have contributed to the uptick in that category in the Los Angeles County portion of the Valley.
Professional, scientific and technical consulting services are also on the rise, as are transportation and warehousing jobs.
For these and other industries, the issue limiting growth now is the supply of workers, he said.