The Santa Clarita Valley, California and the country are forecast to experience economic growth in the coming year, according to economists sharing their insights Friday during the Santa Clarity Valley Economic Development Corp.’s Fall Economic Outlook.
SCVEDC President and CEO Holly Schroeder welcomed Mark Vitner, senior economist at Wells Fargo, and Mark Schniepp, director of the California Economic Forecast, to provide “a window into the national, state and local economies” at the virtual event.
“There’s a lot of good news ahead of us,” Vitner said, citing a growing number of vaccinated Americans. “The pullback in COVID cases is real and the ramp-up in economic activity is also just getting started.”
“Growth this spring and summer is going to be somewhere in the ballpark of 9% and that’s the national numbers,” Vitner continued, forecasting consumer spending will play an important role in the anticipated growth. “The California numbers are likely to be stronger than that because California’s economy was locked down harder and is going to loosen up a little bit more.”
Vitner also touched on migration out of California’s urban areas.
“Most of the folks that are leaving Los Angeles or San Francisco are heading to neighboring areas where they can get a little more living space and may be save a little bit of money on their housing costs,” he said. “The Santa Clarita Valley has benefited from that trend.”
Vitner acknowledged the challenges California’s small business have faced through the state’s “harder,” “more chaotic” and “sporadic” COVID orders.
“For a lot of those (business owners) that spent a lot money thinking they were going to reopen and then couldn’t reopen, it put them in a really tough place financially and we’ve had a lot of small businesses close,” he said, also citing the increased cost of raw materials as a factor.
Vitner’s forecast included a return to a full recovery in economic output this year and a full recovery in employment in 2022.
In the SCV, a majority of the 12,000 jobs lost during the pandemic that have not yet returned come from the leisure and hospitality, manufacturing, transportation and warehousing, and other services sectors, according to Schniepp.
“We remain the most restricted state right now,” said Schniepp, criticizing the state’s “Blueprint for a Safer Economy” reopening plan. “The ‘Blueprint’ system we’re subject to will impede economic growth into the summer months.”
“Those jobs should be made up relatively quickly if we can just be enabled to open up the economy,” Schniepp said.
On housing, Schniepp forecast “housing affordability is going to stay about where it is right now.” Home sales increased 20% and home prices increased 8% compared to this time last year, according to Schniepp. He also highlighted a “red-hot” commercial space market and increased space in the industrial real estate market.
SCVEDC is scheduled to hold part two of the 2021 Fall Economic Outlook Forecast Friday, Sept. 17, from 8:30 to 11 a.m. as a hybrid event at the Santa Clarita Valley Performing Arts Center. Registration is open at scvedc.org/outlook.
