Monday, November 28, 2005
Economic picture good for Solano County
Article Last Updated: 11/25/2005 07:54 AM
Economic picture good for Solano
By Rachel Raskin-Zrihen/Times-Herald, Vallejo
A temporary economic dip will likely mean deep discounts at some stores during the holiday shopping season which traditionally starts today, a university economist says.
Meanwhile, a Solano County expert sees everything coming up roses locally, particularly over the longer term.
Dr. Sean Snaith of the University of the Pacific's Business Forecasting Center, which released its fourth-quarter U.S. economic forecast Tuesday, said several conditions conspired in recent months to slam the brakes on the national economy.
Barring more of the same, however, Snaith predicts the slowdown is temporary, but its timing may benefit holiday shoppers as retailers slash prices to lure spending-wary consumers.
Considering the Fed's raising of interest rates several times lately, two devastating hurricanes and skyrocketing energy and gas prices, that the economy isn't in worse shape proves it's bullet-proof nationally and regionally, Snaith said.
"There have been dramatic fireworks, but the roller coaster ride is subsiding. It's making a soft landing back on solid ground,"he said.
Despite the shocks to what Snaith calls the nation's Kevlar economy, its overall growth rate for 2005 is expected to be 3.5 percent, he said.
Mike Ammann, president of the Solano County Economic Development Corp., said that while there's no escaping the higher energy costs this winter, Solano County is poised for significant growth in the next three to five years.
"We're in better shape in Solano County than pretty much anyone else in the Bay Area," Ammann said. "We have a stable unemployment rate at about 5 percent and a more diversified economy. We no longer face uncertainties like the closure of Travis Air Force Base. And, housing continues to be built."
Ammann also cited Triad Communities' downtown and waterfront projects in Vallejo and the Solano County Fairgrounds project probably kicking off in 2006.
"If you look up and down Interstate 80 in Solano County," Ammann said, "you see major development breaking ground in the next few years."
Ammann cites Genentech's $750 million expansion and its 500 added jobs in Vacaville, the improvement or expansion of most of the area's hospitals, Travis' nearly completed C-17 facility, renovations in Vacaville, Benicia, Dixon, Suisun, Fairfield and Vallejo and other projects, all either under way or ready to start.
Solano Community College, for example, has campuses coming out of the ground in Vallejo and Vacaville, Ammann said. In Solano, the next three to five years is planned, announced and pretty much going to happen.
But there's still the short-term 2005 holiday shopping season to weather. With record high energy prices predicted this winter, the consumer is getting squeezed at the pump, at the thermostat and at the light switch, Snaith said.
"This is going to put a squeeze on budgets and may cause people to trim their family's holiday spending."
Snaith said that anticipating this, middle- and lower-end retailers will slash some prices, likely starting today.
"Expect retailers to come up with real aggressive discounts to get people into the stores and shopping early. They're not going to wait to see how things go," Snaith said.
Even with drastically reduced prices, Snaith said, retailers should expect a flat holiday shopping season, which traditionally begins the day after Thanksgiving.
The bad news for retailers is that "Black Friday" - the day most retailers go into the black for the year - won't be as good as they may have hoped for, as consumers struggle with high energy bills, Snaith said. But as the post-hurricane impact starts to diminish and as the end of the year approaches, things should start to turn back around.
Snaith describes hurricanes Katrina and Rita, which ripped through the Gulf states in August and September, as a traumatizing shock to the national economy. The federal rebuilding efforts, however, should act as a fiscal stimulant in the first part of 2006, he said.
"We should see continued steady, level economic growth beginning with the new year," Snaith said.
• Higher energy costs will result in the weakest growth in real fourth quarter spending by consumers since 2002, with the worst hit to consumer durables, particularly big-ticket items.
• Much of the retail sector is expected to pursue aggressive pricing strategies early this holiday season.
• Energy prices have fallen from the post-hurricane peak but will remain the cause of the weakest quarter of real Gross National Product growth in 2005.
• GNP growth should surge the first part of 2006 as reconstruction spending ramps up in the Gulf states.
• Housing starts will begin declining at a measured pace as the residential real estate market cools.
• Investment spending and hiring growth will continue to grow more slowly over the next several years in response to diminishing demand for products and increasing cost of capital.
• Spending at the federal level will grow at the slowest rate since 2000, but state and local expenditures will expand to their best growth rate since 2002.
• The dollar should continue depreciating for the next three years.
• Prices should remain under control but core inflation will continue growing at a contained rate for the next few years.
• Unemployment should remain low, consistent with stable prices, for the foreseeable future.
Posted by Solano EDC at 10:25 AM
- ► 2007 (799)
- ► 2006 (662)
- Filling In
- Making it Big
- Copart Acquires Central Penn Sales
- More C-17s could be headed to Travis AFB
- Rockville Trails Estate, water district part ways
- Fairfield responds to jump in crime
- California Coffers Swelling Again After Struggles
- Economic picture good for Solano County
- Apartment construction keeps pace, rents stay down...
- Dixon Trustees Unanimously Approve New School
- Travis Air Force Base Gets Millions in Funds
- Bill Would Fund Solano Transportation Projects
- Ready and Rented
- Reading, Writing and Religion...
- Helping Solano County Business Flourish
- Results of Annual Apartment Rent Survey Conducted ...
- Top Solano leaders target coordination on key issu...
- Lennar Gets Extension on M.I. Deal
- Travis Prepares to Accept C-17s
- County Program Extends Health Care to Homeless
- Dixon Trustees May Accept Bid for New High School
- With New School Coming, AmCan Weighs Amenities
- Capitol Corridor to Serve Proposed Fairfield-Vacav...
- Vaca Public Works 'Agency of the Year'
- Jockeying for Jobs
- Flying high: Vallejo's Six Flags reports larger pr...
- Perils of converting old bases
- Editorial: Port of Sacramento - The Sacramento Bee...
- CBS 5: Port Of Oakland Gets $48 Million For Improv...
- Bioscience firm creates safflower rich in healthy ...
- Bay Region's biotechs spend $4B a year on research...
- House approves water project bill with more than $...
- Vallejo Receives Two Big Charter Grants
- A Wealth of Walnuts
- A New Hope for the Homeless
- Shea donates to fire and police effort in Rio Vist...
- Large Scale Biology Corp reports third quarter res...
- Copart, Inc. (NASDAQ: CPRT - News) today announced...
- Development Dues
- Delegation From Philippines Visits Vallejo to Stud...
- Hearthstone Turns its Eye to Vallejo's Hiddenbrook...
- Caltrans wants AmCan to widen Highway 29 to Napa
- Ranchotel owner offers to share land with K-9 faci...
- Solano County seeks panel members to help update G...
- City of Fairfield Green Valley may get upscale bis...
- It's supersmooth in Dixon Rare welcome for Wal-Mar...
- Solano Still Rules
- Solano County Seeking its Foothold on the Wine Ind...
- Project in Works to Bring Italian Cuisine to Valle...
- Mare Island Indicates Possibilities
- ▼ November (50)
- ► 2004 (125)