Orange County isn’t expected to start adding jobs until 2011, according to a midyear economic forecast update released by Chapman University Thursday.
Economists at the university in Orange now expect a 1.2% drop in employment for nearly 18,000 jobs lost in 2010, a sharp pullback from the 1,000 job gain it predicted in December.
Job losses are expected to give way to hiring in 2011 with a “weak but sustained” economic recovery, according to Chapman. The report projects 1.5% job growth, or 21,000 new workers, by the end of next year.
“The unemployment rate will be sticky downward,” said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman. “It’s gonna go down, but very, very slowly.”
New workers in education and health services are expected to lead the rise in job growth with a 2.6%, or 2,000 jobs, increase in 2010 and an additional 4,000 jobs added in 2011, according to the report.
The trade, transportation and utilities sector—which is expected to lose nearly 3,000 jobs in 2010—is forecast to see a 2011 rebound with 5,000 added workers.
“Do not concentrate on the unemployment rate—we tell that to everyone,” Adibi said. “All politicians want to do is create jobs. That’s not going to happen any time soon.”
The soft recovery is part due in large part to the “lethargic turnaround” in the construction sector, according to the report.
More than 7,500 construction jobs are expected to be lost in 2010, with 2011 not looking any better.
Housing is expected to recover faster than the commercial real estate market, with a predicted 17.5% increase in housing permits in 2011.
Already, home prices are showing signs of stabilization after a freefall from peak levels in March 2007. The median price of a single-family home has steadily increased 14.2% since January and now stands at $430,000.
But Adibi warns that these numbers are somewhat misleading, as they fluctuate based on what types of homes are being sold.
“These numbers are bogus. Unfortunately this is what we have to forecast, because these are median prices,” he said. “It varies a lot depending on what type of homes are sold.”
Low lease rates and high vacancy in commercial real estate is keeping developers from building. That is expected to keep pushing total construction spending down through the third quarter of 2011, according to Chapman.
“Under this scenario is anyone going to build office space? No. Retail? No,” Adibi said.
