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Economists: County may face rocky times
Panelists cite changes in population, fuel costs, housing
Nevada County faces the same rocky economic times felt by the rest of the state and nation, economists said Wednesday.
If their predictions hold true, too many retirees needing services and too few working families forming an economic base would compound the county's problems, they said at the Economic Forecast Conference in Grass Valley.
"The trends basically suggest that economists are a little less optimistic this year," said Gary Zimmerman, senior economist for the Federal Reserve Bank of San Francisco, who spoke at the conference.
As many as 160 business and county officials got the news in a packed conference room at the Holiday Inn Express during the event organized by the Nevada County Economic Resource Council Foundation.
The housing slowdown being felt in Nevada County mirrors a 30-percent decline in new housing activity shared by the state and nation, Zimmerman said. Housing appreciation levels have dropped statewide, while mortgage rates are expected to rise.
That makes it difficult for people to refinance their homes, Zimmerman said. Home refinancing fueled other economic sectors, such as automotive and retail sales, he said.
Fuel costs also play a big role in the way Americans spend their cash, impacting everything from tourism to manufacturing in Nevada County - and energy costs also are expected to rise, Zimmerman said.
Economists forecast that comfortable inflation levels won't be reached until the end of 2008 or 2009, Zimmerman said.
"There could be some rocky times ahead," said Dr. David Gallo, economist and dean of the College of Business at California State University, Chico.
Between 2006 and 2015, economists predict there will be fewer school-age children; that the county work-force population aged 20 to 59 will rise by 1.33 percent; and that the number of people older than 60 will rise by 6.33 percent.
More seniors settling in the county would create a higher demand for public transportation, housing and medical services, Gallo said.
"You're not going to find enough seniors who can afford a MacMansion," Gallo said. Instead, seniors living on limited budgets will need smaller, more manageable homes than the estates many retirees buy now.
An aging population means a smaller labor pool and possible school closures as the county's population of children shrinks, Gallo said.
Since 1997, all growth has come from people migrating to the county. The future economy will rest heavily on the cost and availability of housing, as well as water and sewer capacities, Gallo said.
"That kind of session is an eye opener," said District 4 County Supervisor Hank Weston. The next general plan must address the demands of an aging population and ways the county can retain younger working families, he said.
"We're going to have to look at different strategies to deal with the demographics," Weston said.
ooo
To contact Staff Writer Laura Brown, e-mail laurab@theunion.com or call 477-4231.
On the Web
• Nevada County Economic Resource Council,
www.ncerc.org
• The Federal Reserve Bank of San Francisco, www.frbsf.org
• Center for Economic Development and Small Business
Development Center, www.csuchico.edu/cedp
If their predictions hold true, too many retirees needing services and too few working families forming an economic base would compound the county's problems, they said at the Economic Forecast Conference in Grass Valley.
"The trends basically suggest that economists are a little less optimistic this year," said Gary Zimmerman, senior economist for the Federal Reserve Bank of San Francisco, who spoke at the conference.
As many as 160 business and county officials got the news in a packed conference room at the Holiday Inn Express during the event organized by the Nevada County Economic Resource Council Foundation.
The housing slowdown being felt in Nevada County mirrors a 30-percent decline in new housing activity shared by the state and nation, Zimmerman said. Housing appreciation levels have dropped statewide, while mortgage rates are expected to rise.
That makes it difficult for people to refinance their homes, Zimmerman said. Home refinancing fueled other economic sectors, such as automotive and retail sales, he said.
Fuel costs also play a big role in the way Americans spend their cash, impacting everything from tourism to manufacturing in Nevada County - and energy costs also are expected to rise, Zimmerman said.
Economists forecast that comfortable inflation levels won't be reached until the end of 2008 or 2009, Zimmerman said.
"There could be some rocky times ahead," said Dr. David Gallo, economist and dean of the College of Business at California State University, Chico.
Between 2006 and 2015, economists predict there will be fewer school-age children; that the county work-force population aged 20 to 59 will rise by 1.33 percent; and that the number of people older than 60 will rise by 6.33 percent.
More seniors settling in the county would create a higher demand for public transportation, housing and medical services, Gallo said.
"You're not going to find enough seniors who can afford a MacMansion," Gallo said. Instead, seniors living on limited budgets will need smaller, more manageable homes than the estates many retirees buy now.
An aging population means a smaller labor pool and possible school closures as the county's population of children shrinks, Gallo said.
Since 1997, all growth has come from people migrating to the county. The future economy will rest heavily on the cost and availability of housing, as well as water and sewer capacities, Gallo said.
"That kind of session is an eye opener," said District 4 County Supervisor Hank Weston. The next general plan must address the demands of an aging population and ways the county can retain younger working families, he said.
"We're going to have to look at different strategies to deal with the demographics," Weston said.
ooo
To contact Staff Writer Laura Brown, e-mail laurab@theunion.com or call 477-4231.
On the Web
• Nevada County Economic Resource Council,
www.ncerc.org
• The Federal Reserve Bank of San Francisco, www.frbsf.org
• Center for Economic Development and Small Business
Development Center, www.csuchico.edu/cedp
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