Tuesday, January 15, 2008

Economic Roller Coaster

Economic Roller Coaster
Despite The Ongoing Mortgage Crisis, Housing Slump and Declining Dollar, Forecasters Predict Vallejo's Future To Be Surprisingly Sunny.
By RACHEL RASKIN-ZRIHEN/Times-Herald staff writer

Vallejo's economy may be experiencing a slowdown, according to analysts, but should rebound vigorously, with leisure and travel spending being an important factor in the area's economic turnaround. Two of the city's businesses, the Courtyard by Marriot and Six Flags Discovery Kingdom, may play a part in that recovery. (Mike Jory/Times-Herald)

The Vallejo area economy will slow to a crawl until the middle of the year and then rebound, according to a university economic forecasting center.
Personal income and wage growth will be especially strong in Solano County, said Chuck Williams, dean of the University of the Pacific's Eberhardt School of Business.

"Of the 11 regions in Northern California and the Central Valley that we track, we have Vallejo No. 2 in personal income growth and in the percentage of change for average wage growth," Williams said. "That's a very strong rate of growth."

San Jose leads in personal income and average wage growth.

The Vallejo area is tied for second place with Sacramento in projected housing starts. Napa is expected to outpace the rest of the region in this area, Williams said.

The growth is expected to follow a lean first half of 2008, he said.

"We see slower growth in the first two quarters of '08, followed by strong growth the last half of the year and through 2009," he added.

Williams said the increased housing starts will likely accompany a turnaround in the current real estate market slump.

"The housing ship will right itself," he said. "In some areas, like San Joaquin County, for instance, we're already seeing increased housing sales."

The most recent forecast also predicts the economic rebound will be led by an increase in jobs, especially in professional and business services, leisure and hospitality, and education and health services.

That makes sense to Vallejo Chamber of Commerce president Rick Wells.

"I can see health care and related industries being central to our economy, with the new Kaiser (Permanente Medical Center, Vallejo) facility, the expansion of Sutter (Solano Medical Center) and what's expected to happen on Mare Island. That's marked growth in health care."

Touro University, in partnership with Siemen's Medical Solutions, plans to build a state-of-the-art combined particle therapy cancer treatment center and associated facilities, as part of its university village on Mare Island's north end. One of what will likely be only two such facilities in North America, the approximately $500 million project could bring people from across the nation and even the Western Hemisphere to Vallejo.

An uptick in leisure and hospitality also makes sense, Wells said.

"Leisure and travel spending is also an important component of our economy," he said.

• E-mail Rachel Raskin-Zrihen at RachelZ@thnewsnet.com or call 553-6824.

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