Despite some encouraging trends, the economic recovery will progress at a painfully slow pace this year, a UCLA economist told Sonoma County business leaders Friday.
"We're not going to get a full recovery," said Jerry Nickelsburg, senior economist with UCLA's Anderson Forecast. "We're still going to have slow growth and economic stress."
Nickelsburg spoke at Sonoma County's annual State of the County conference at the DoubleTree Hotel in Rohnert Park.
Data show the U.S. recession ended in 2009, but many of its effects linger on, he said. The economy is in a two-sided recovery, with some sectors improving while others languish, Nickelsburg said.
"There's a recovery and a non-recovery going on," he said.
Still, there's little chance of a double-dip recession, unless Europe's economic turmoil spreads to the United States, Nickelsburg said.
U.S. exports, auto sales and business investment are on the rise. But overall consumer demand, housing and employment are stuck in the doldrums, Nickelsburg said.
California payrolls should grow just 1.2 percent this year, followed by a 2 percent jump in 2013, he said. Statewide unemployment will average around 11.6 percent this year and fall to 10.5 percent in 2013.
Sonoma County reflects the mixed bag of economic trends, he said. While unemployment is lower than the state average, the county has a high rate of foreclosures and isn't adding jobs as fast as some other parts of California.
The county's wine industry stands to gain from the state's surge in exports, he said. Construction jobs will remain scarce, with multi-family projects returning but little demand for new single-family homes.
U.S. consumers are saving but not spending, except when it comes to new cars, Nickelsburg said. With domestic consumption driving 70 percent of the economy, "it's that slack demand that is causing us to grow so slowly," he said.
The housing slump is a big reason for the weak recovery.
"We're missing that component of consumer demand," Nickelsburg said.
At the federal level, look for deficits to continue and little impact from government stimulus programs.
"None of that is going to help," he said.
Millions of jobs in construction, manufacturing and retail disappeared during the recession, and they aren't coming back, Nickelsburg said. It will take years for most of those workers to get back into the labor force, he said.
Sonoma County leaders said they expect improved business conditions for 2012. County housing is more affordable than its been in years, said Ben Stone, who heads the county's Economic Development Board.
The county ranks high for innovation and competitiveness, he said. A survey found 58 percent of employers plan to add workers this year.
The county is streamlining its permit process and taking other steps to improve the business climate, Stone said.
There are public works projects worth $500 million in the pipeline for 2012, said Shirlee Zane, who chairs the county Board of Supervisors. They include airport expansion, SMART commuter rail, park development and Sutter Health's new Santa Rosa hospital.
They'll provide jobs and improve Sonoma County's quality of life, Zane said.
"Government can be part of the solution when we creatively partner with the private sector," she said.