Orange County’s economy looks good as it heads into 2014.
That’s more than a safe bet or bland prognostication this year. It’s a leap forward for OC, which finally appears poised to muster a belief that things are just plain good—with no caveats, asterisks or other qualifiers for the outlook.
A couple of big-picture indicators that argue the case: Home sales and prices are generally trending upward, with the median price up 24% to about $560,000, even with a recent cooling trend. The unemployment rate, meantime, is at a five-year low of 5.6%, compared with an average of 9.5% in 2009, the trough of the recession.
It’s still no easy feat to fully embrace a better economy, especially after several years of recession, a period of tepid expansion, and a more recent trend of good news getting chastened by a near-constant stream of conditions beyond local control: a possible meltdown of the European banking system, presidential or mid-year elections that can put a chill on the economy, political bickering that now seems to take our federal government to the brink of a shutdown or beyond—again.
All of those factors play into the biggest challenge that will have to be overcome if OC’s economy can put a firm claim on good and get back to dreaming of great: the habit of uncertainty that has—for good reason—set in over the past five years.
Outside Factors
There are legitimate reasons for businesses to keep their planning and projections on the cautious side. Orange County is indeed subject to numerous outside forces. The state and federal governments can affect business; the banking system of Europe and a generational shift in a rogue nation-state such as North Korea can affect everything from business confidence in the abstract to tangible trading opportunities.
There are also big indicators that could trickle down to pinch OC’s economy just as it settles in on the notion of being just plain good once again. Word from shopping malls around the country indicates we could see a disappointing holiday sales season; Ford Motor Co. has already hedged its bets on profits for 2014; and the Federal Reserve’s recent moves indicate interest rates could rise, putting a damper on home sales.
Two Views
All of that hits Orange County from 30,000 feet up, as well as ground level, since we have significant numbers of apparel makers and retail chains based here, not to mention the U.S. operations of several auto brands and a raft of homebuilders.
Those aren’t the only segments of OC’s economy that merit a closer look, and you’ll find reports on various other sectors on the inside pages of this issue. It’s an impressive spread of industries for the local market, and you can take your own measure and consider where the local economy sits as we head into 2014.
We’re a long way from the recession, any way you look at the local economy.
We’re dealing with something altogether different now in OC, where the economy has been moving in the right direction for at least two years.
That’s good—and if you can believe that, it might just be great next year.
