Orange County is expected to outpace the state and nation in 2017 in job growth, Chapman University economics experts predicted Friday.
Job growth in 2017 is expected to reach 2.5 percent in Orange County, higher than 2.1 percent for California and 1.8 percent nationally, Jim Doti, Chapman’s Donald Bren Distinguished Chair of Business and Economics and past president of the university, told business leaders at the school’s annual economic forecast gathering.
From 2012 through this year, the average annual increase in jobs was 2.7 percent in the county and state, according to the university’s report.
The state’s jobs growth was fueled by manufacturing positions in Silicon Valley. In Orange County, the job surge was driven by the information services sector.
The soft spot for Orange County is housing, according to the forecast.
“An area of concern for Orange County’s future is the continuing decline in housing affordability,” according to the report. “We see this affordability gap widening in 2017.”
The forecasters say housing prices may be a “bubble.”
“We do not, however, expect that inflating bubble to burst in 2017,” according to the report. “Even though mortgage rates are increasing, the tight supply of unsold housing, coupled with strong rental demand, will keep prices appreciating.”
The only affordable housing for lower-income residents is through rentals, the report said.
“Rental units as a percentage of total housing unit permits increased from 60.4 percent in 2012 to 66.9 percent in 2016,” according to the report.
“Strength in apartment construction will continue to buoy residential permit value next year. We project that total Orange County residential permit valuation will surpass $3 billion for the first time ever in 2017.”
Construction jobs should go up 6 percent next year, far outpacing the 2.4 percent rate for the state, the report said. That rate, however is much lower than this year’s 12.7 percent increase.
Income growth is also a potential problem in the county, the forecaster said.
From 2010 through 2015, the county’s per capita personal income grew 16.1 percent, from $49,700 annually to $57,700. The state’s increase of 25.2 percent, from $43,200 to $54,100 was much more robust.
“Orange County’s underperformance in creating high-paying information services jobs and more rapid increases in low-paying jobs in the leisure and hospitality sector help explain this difference,” in the county and state income growth percentage, the report said. “The county’s strong performance in construction served to narrow the income growth differential.”
–City News Service