…provided you have patience

Good news! Oxnard's economy should recover nicely. However, it won't happen quickly. That was the message delivered at the 6th Annual Oxnard Economic Forecast on October 8. The research and presentation were coordinated by the UCSB Economic Forecast Project, who has been tracking Oxnard's economic data in recent years.

For professional service providers and those in leisure-related business in the city, rest assured that Oxnard has done better than the rest of Ventura County in those fields. Manufacturing, construction and finance were, not surprisingly, the worst hit industries in the past year.

We all know that consumer spending declined during this recession, but what has had a striking impact is the fact that business spending is down 28% from last year. According to Dr. Christopher Thornberg of Beacon Economics, the three factors most responsible for our hard times were the real estate market (obviously), over-appreciation of United States assets, and consumer spending being out of control.

The residential real estate market has seen some improvement in the past 30 – 60 days. Prices have slightly increased and properties are moving. The commercial real estate market is not following that trend. According to Thornberg, recovery there is a long way off.

In Thornberg's statement of U.S. assets being over-appreciated, he compared the growth of the national Gross Domestic Product, which averages 3% annually, with the growth in stock prices. The two moved along at the same relative rate until 1994 when stock prices soared above the GDP. Dr. Thornberg couldn't pinpoint an event that caused the change, but noted that it was a significant factor in the hard times we are experiencing today.

Consumer spending was extremely robust until the real estate market crash resulted in major job losses. The "Don't ask, Don't tell" mortgages of 3 – 5 years age are still causing havoc. Thornberg noted that 15% of mortgages nationwide are in distress or have already been foreclosed on. For those thinking of refinancing or obtaining a conventional loan, his advice is to act now. He predicts inflation will be rearing its head in a year or year and a half.

Dr. Thornberg is bullish on California, and doesn’t think Oxnard will be an exception. He says the state has grown faster than the U.S. since 1994 in terms of GDP, income, employment and population. On the backend of the recession, he predicts the weaker U.S. dollar will be good for export-heavy California and housing prices will be cheaper.

Of all the forecasts out there comparing the economic charts to letters (such as "V" for a quick turnaround, "U" for a softer landing and uptick, "W" for a double dip after some signs of recovery, or "L" for we're in this at the bottom for a long time), Thornberg says it's an "S" for SLOW!

The Oxnard Economic Outlook was presented by the Chamber in partnership with the Economic Development Corporation of Oxnard. We sincerely thank the City of Oxnard for their Title Sponsorship. In addition, the Oxnard Harbor District and the Ventura County Star were Lead Sponsors. County Commerce Bank, Venoco and Western States Petroleum Association stepped up as Supporting Sponsors. We also thank the Pacific Coast Business Times for their contribution of advertising as well.

Copies of the local data and Beacon Economics California and U.S. forecast are available at the Chamber office for a small fee.