The Orange County economy will continue to shrink through the end of the year, according to Chapman University’s annual economic forecast update on Tuesday.
The burst of the housing bubble has turned into deeper economic problems of less spending and job losses, said Chapman economist Esmael Adibi at the annual event held at the Hilton Orange County in Costa Mesa.
Job losses for Orange County are expected to approach 18,000 for a 1.2% decline this year.
Orange County’s heavy concentration on lending and construction jobs should lead it to the largest drop in the state.
Statewide job losses are expected to total 30,000 for a 0.2% loss.
Strong exports have helped offset a decline in construction spending. But things won’t turn around until next year, Chapman predicted.
In 2009 the county should add 14,000 jobs, a 1% increase, Adibi said.
Chapman also sees housing prices falling 16.1% for the year, and another 9% in 2009.
By the end of next year prices will find a bottom down about 30% from the market’s high in 2006, he said.
Prices will revert back to being more affordable by median income before a bottom is found, he said.
On the national level, Chapman’s President Jim Doti said the economy is in the early stages of recession, which means back-to-back quarters of economic contraction.
The forecast calls for quarterly declines in spending through most of this year before rebounding in 2009.
