The economy of Northern Santa Barbara County is recovering, but at a slower rate than previous post-recession periods, experts told an audience at the North County Economic Summit on May 4.
Several hundred people filed into the Marian Theater on the Allan Hancock College campus for the latest UCSB Economic Forecast Project report and to hear several presenters, including David Altig, senior vice president for the Federal Reserve Bank of Atlanta; UCSB professor Peter Rupert, chairman of the Department of Economics; and John Felmy, an economist with the American Petroleum Institute.
Rupert presented the North County forecast, comparing past recoveries from recessions in 1973, 1981, 1990, and 2001. This time around, he said, a struggling job market, a flat-lining of personal income levels, and a low countywide Gross Domestic Product have resulted in a more sluggish rebound than in prior years.
Rupert said the local unemployment rate continues to drop, but part of the decrease could be attributed to long-term unemployed people giving up the search. Much of the projected job gains over the next several years in the North County, he added, will occur in low-paying jobs, such as labor, food service, and retail.
Altig presented the Federal Reserve Bank’s forecast for the nation, reporting that the Fed predicts unemployment to fall to 7.1 percent over the next three years. He said consumer spending nationwide is still growing faster than disposable income, hurting the prospects of a lengthy upswing.
Rupert said he expects housing prices to continue to fall in the North County over the next 10 weeks, and a new round of home foreclosures could be on the horizon.
Speaking on the future of oil and gas, Felmy said the North County sits on billions of barrels of untapped oil reserves in the Monterey shale formation that haven’t been utilized due to overregulation and excessive taxation. Increased oil production here, he said, could spark an economic recovery locally.
This article appears in May 10-17, 2012.
