UCLA economic forecast looks bright for Orange County

Keeping in step with California’s growing economy, analysts expect Orange County’s job market to continue to improve the next two years, though at a slower pace than this year.

Two UCLA economists gave their forecasts for the state and county Friday morning at the Fairmont Hotel in Newport Beach during an event put on by the Newport Beach Chamber of Commerce.

California was pummeled during the housing bust and recession that began in 2007 but has been outperforming the nation in growth of jobs and gross domestic product for the past few years, experts said.

The state’s economy is growing so robustly that businesses in California are expected to reach what is considered full employment — defined by the Federal Reserve as a jobless rate of 5% or less — within the next six months, according to Jerry Nickelsburg, an adjunct professor of economics at UCLA and an economist for the UCLA Anderson Forecast.

Orange County appears to have already met that goal, with an unemployment rate of 4.1% in April, down from 5% earlier this year, according to data in the UCLA Anderson report.

However, that rate of growth is not sustainable forever, Nickelsburg said.

The UCLA forecast estimates that statewide employment will grow by 2.7% this year and slow to 2.2% growth in 2016 and 1.4% in 2017.

Orange County is expected to follow a similar trend.

The top industries for job growth in Orange County are professional and business services, hospitality, and education and health services, with jobs in information systems lagging, said William Yu, a UCLA Anderson Forecast economist.

Orange County’s number of paid workers, which has been rising steadily since 2011, is increasing by about 3,100 per month, Yu said.

At the same time, home prices in Orange County — in step with the rest of the state — will become less affordable over the next two years because the amount of building will not meet demand, experts said.

However, Yu said, the housing market will continue to attract buyers from overseas, especially China.