California may be poised to lead the nation's economic rebound, but that recovery is going to happen more gradually than once predicted, a UCLA economist told Sonoma County leaders on Wednesday.
Strength in trade, technology and tourism are all helping drive growth in the state in 2011 and 2012, said Jerry Nickelsburg, senior economist with UCLA's Anderson Forecast.
And while that growth may outpace the rest of the nation, the economy is still likely to crawl along with a modest 3 percent rate over the next two years, instead of the more robust 6 percent rate some were hoping for, Nickelsburg said.
"That's the disappointing part of the forecast," he said.
The high jobless rate and a weak housing market continue to be the largest obstacles to any quick recovery, Nickelsburg told about 500 business and government leaders at the Sonoma County Economic Development Board's annual "State of the County" forum at the Doubletree Hotel in Rohnert Park.
The state's unemployment rate, at 12.4 percent, and the county rate, at 10.1 percent, still surpass the national jobless rate, now at 9.4 percent.
And housing starts, which are forecast to climb this year before nearly reaching pre-recession levels next year, still must do so from historic lows over the past two years.
The near-halt in construction figured into one of the morning's biggest statistical jaw-droppers: Construction workers and non-education government workers accounted for 50 to 60 percent of the job losses in Sonoma County during the past three years, according to Nickelsburg.
The pattern mirrored other areas in the state and across the nation, he said. And most of those government and building jobs are not coming back any time soon, he said.
Instead, hospitality, food production, information technology and high-tech manufacturing sectors are predicted to account for most of the new jobs in Sonoma County over the next two years, Nickelsburg said.
"There's a shift away from government and construction. We expect that to continue," he said.
The private sector's confidence in any economic rebound and government decisions on health care policy and spending will determine how widely businesses resume their hiring, he said.
"The real key is when does business have the confidence to start hiring," Nickelsburg said.
Employment gains are expected to push the state jobless rate down to 11.4 percent this year and to 10.3 percent next year, he said.
Statewide, personal income is also forecast to rise by 1.6 percent this year and 3.6 percent in 2012, he said.
Joint public and private sector investments in Sonoma County's economy will be a key to producing any of those job and income gains, Board of Supervisors Chairman Efren Carrillo told the audience in his address.
He called the county's 10.1 percent unemployment rate "unacceptable" and said a new $100,000 effort overseen by the Sonoma County Innovation Action Council would focus on developing additional employment opportunities for local workers.
Programs to help at-risk youth, especially those in the Latino community, deserve renewed attention, Carrillo said, while the county government's ongoing budget woes and its efforts to curtail energy use and greenhouse gas emissions will continue to be top priorities.
"The past couple of years have been rough, to say the least," he said. "We have much to be proud of, but much more work is left to be done."