Dr. Jim Doti, president emeritus of Chapman University and Dr. Raymond Sfeir, Director of the A. Gary Anderson Center for Economic Research, presented the 2019 Economic Forecast Update on June 19. The event took place at the Marybelle and Sebastian P. Musco Center for the Arts on the Chapman University campus in Orange and was well received by a group of approximately 800 highly engaged onlookers.
Chapman’s US economic update pointed to the impact of the U.S. trade war with China, which could represent a GDP drop of $40 billion in 2019 and even double in 2020 if tensions continue unresolved. For California, the GDP reduction could represent a loss of 43,000 jobs for every $1 billion of losses in trade.
Nevertheless, the updated forecast maintained a positive view on growth, predicting a 2.4% economic expansion in the U.S for this year. This represents a 0.5% reduction from the 2.9% in 2018 but is still following the trend of the longest expansion in US history. The strong growth for the country seems to be much tougher in California, which is losing its momentum.
The Update found that the jobs-related data for Orange County shows a 1.3% growth this year, falling behind the state of California’s 1.5% numbers. This is mainly a consequence of the absence of growth in Orange County’s information-related jobs.
In the first quarter of 2019, Orange County’s fastest growing sector, construction employment, dropped to negative growth. This was due to the rise in mortgage rates causing a decline in residential permits and a 15% drop in home sales. Nevertheless, the second quarter of 2019 showed a sudden decline in mortgage rates, again benefiting the County’s housing affordability and bringing the residential construction jobs back to the levels of the prior year.