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Job losses are slowing, housing prices are (hopefully) bottoming out and Nevada County is heading for a slow economic recovery, economists told a group of community leaders Tuesday.
Indicators for a rebounding economy are present here, said David Gallo, an economist from the Center for Economic Development at California State University, Chico. He spoke to a gathering of approximately 150 people at the Grass Valley Veterans Building. The annual economic report was sponsored by Citizens Bank and the Nevada County Economic Resources Council.
Job losses county-wide peaked in the fiscal year of 2008-09, when 3,110 county residents lost their jobs, Gallo said. From June 2009 to March of this year, 70 county residents lost jobs, he added.
The county's unemployment rate remains at about 12.3 percent - even as the rate drops elsewhere in Northern California - but that may not be that bad, Gallo said.
“The good thing about the unemployment rate rising is that people aren't leaving the area,” Gallo said. In much of Northern California out-of-work residents are moving elsewhere, he said. When the county's economy comes back it won't be hampered by a need to draw labor to the area because the workforce remains mostly intact, Gallo said.
Housing prices and new construction both took the brunt of the recession since it began in 2007. Median prices dropped to about $312,000 from its peak of just under $500,000 is 2006; while building permits dropped 83 percent from their peak in 2006, the economist stated. The housing industry downfall took an estimated 10 percent from the county's overall income, as construction jobs evaporated and homeowners no longer gained equity, Gallo said.
But housing prices and job losses in the construction field have hopefully bottomed out, he said. Increases can be expected in housing volume and prices over the next few years. The local economy can be expected to grow at about 4 percent in the next year, Gallo said.
A week local and national labor market, continued foreclosures and loan delinquencies, poor commercial real estate values and conservative household spending will make the recovery from the current recession slow, said Gary Zimmerman, a senior economist with the Federal Reserve Bank in San Francisco.
Due to massive job losses and the extended nature of unemployment — 44 percent of the unemployed have been without work for more than six months, much longer than in previous recessions — the recovery will be slow, Zimmerman said. The economy won't reach its full potential again until about 2013, Zimmerman said. Unemployment is expected to dip down to about 6.5 percent by 2012, he added.
To contact Staff Writer Kyle Magin, e-mail kmagin@theunion.com or call (530) 477-4239.
Indicators for a rebounding economy are present here, said David Gallo, an economist from the Center for Economic Development at California State University, Chico. He spoke to a gathering of approximately 150 people at the Grass Valley Veterans Building. The annual economic report was sponsored by Citizens Bank and the Nevada County Economic Resources Council.
Job losses county-wide peaked in the fiscal year of 2008-09, when 3,110 county residents lost their jobs, Gallo said. From June 2009 to March of this year, 70 county residents lost jobs, he added.
The county's unemployment rate remains at about 12.3 percent - even as the rate drops elsewhere in Northern California - but that may not be that bad, Gallo said.
“The good thing about the unemployment rate rising is that people aren't leaving the area,” Gallo said. In much of Northern California out-of-work residents are moving elsewhere, he said. When the county's economy comes back it won't be hampered by a need to draw labor to the area because the workforce remains mostly intact, Gallo said.
Housing prices and new construction both took the brunt of the recession since it began in 2007. Median prices dropped to about $312,000 from its peak of just under $500,000 is 2006; while building permits dropped 83 percent from their peak in 2006, the economist stated. The housing industry downfall took an estimated 10 percent from the county's overall income, as construction jobs evaporated and homeowners no longer gained equity, Gallo said.
But housing prices and job losses in the construction field have hopefully bottomed out, he said. Increases can be expected in housing volume and prices over the next few years. The local economy can be expected to grow at about 4 percent in the next year, Gallo said.
A week local and national labor market, continued foreclosures and loan delinquencies, poor commercial real estate values and conservative household spending will make the recovery from the current recession slow, said Gary Zimmerman, a senior economist with the Federal Reserve Bank in San Francisco.
Due to massive job losses and the extended nature of unemployment — 44 percent of the unemployed have been without work for more than six months, much longer than in previous recessions — the recovery will be slow, Zimmerman said. The economy won't reach its full potential again until about 2013, Zimmerman said. Unemployment is expected to dip down to about 6.5 percent by 2012, he added.
To contact Staff Writer Kyle Magin, e-mail kmagin@theunion.com or call (530) 477-4239.
