STOCKTON – California will experience faster economic growth in 2014 and 2015, according to the latest projection from the Business Forecasting Center at the University of the Pacific. The Center forecasts real gross state product will grow 3.3% in 2014, and accelerate to 3.9% in 2015 as the housing recovery begins to fuel new construction and job growth. The nearly 4% growth rate in 2015 will be the highest California has experienced since 2005.
Job growth is anticipated to stay steady at 2%, but the composition of job growth will shift towards middle-class jobs as the construction industry recovers and state and local government employment changes from job loss to modest growth. In contrast, growth in the lower-paying hospitality sector should decline in 2014, and retail job growth will remain sluggish.
In the regional outlook, the Sacramento forecast has been upgraded due to improving data, the stimulus of downtown arena development, the housing market surge and the improved state budget that is boosting local paychecks. After years of lagging behind, Sacramento is now projected to lead the region in 2015 with 2.8% annual job growth.
The Stockton metro area is expected to lead job growth over the next year. The projected 3.4% growth is fueled by hiring at the new prison healthcare facility, Amazon’s new Tracy fulfillment center, the improving real estate market, and increased construction in areas near the Altamont Pass.
In addition to detailed five year economic projections California and ten metro areas, the forecast includes essays discussing the latest developments in the Stockton bankruptcy case, the surging housing market and the financial problems plaguing the high-speed rail and delta water tunnels mega-projects. The Business Forecasting Center at the University of the Pacific was founded in 2004. Housed in the Eberhardt School of Business, the Center produces quarterly economic forecasts of California and 10 metropolitan areas in Northern and Central California, in depth studies of regional issues, and offers custom economic research services to public and private sector clients. For more information, visit http://forecast.pacific.edu/.