California Remains On Slow Path Of Recovery
Tuesday, May 1, 2012
The prediction comes from the Business Forecasting Center at the University of the Pacific in Stockton.
Economist Jeff Michael, who wrote the center's latest quarterly forecast, predicted that "California's going to grow at about a 2.5% rate for 2012 and 2013 and accelerate after that in 2014."
What will drive that acceleration in 2014, Michael said, is housing.
"The residential real estate market has bottomed out with respect to prices and housing starts and construction," explained Michael. "So it really isn't a negative factor on the economy anymore."
"Housing starts" - that's the number of privately-owned new housing units on which construction begins during a given time. Michael said it's currently at 53,000 in California. He predicted it'll hit 165,000 in four years.
Michael also said Southern California and the Central Valley will continue to lag behind the Silicon Valley, which is leading the state's economic recovery.