Each year since 1978 Chapman University has published an economic forecast. These reports are widely anticipated and regarded as one of the better forecasts known for their detail and, most times, accuracy.
At the bullet points below, I've provided some of the highlights per my review of the report. For those wishing to read the full report, and I encourage you to do so, you can find a copy here. The full report has many charts, graphs and tables which are quite useful.
- The recovery is in its 3rd year and Chapman forecasts the recovery to continue into a 4th year in 2013 with an estimated increase in GDP of 2.1%, roughly similar to 2012.
- Housing continues to be a bright spot. Nationally, housing inventory is low and housing starts have increased significantly. Housing starts increased 25% in 2012 and are forecast to increase again at a 13% clip in 2013. Nationally, prices increased 6% in 2012 and are forecast to increase 3.5% in 2013. In Orange County, Chapman forecasts price appreciation of 4.2% in 2012 and 6.8% in 2013.
- Household Net Worth is forecast to return to its pre-recession high by the end of 2013 which explains the boost in consumer confidence seen in recent months.
- “California and Orange County economies will be facing headwinds in the coming year that may derail the recent pickup in job creation. Higher taxes – sales, income and payroll – are the primary concern.”
- “On the bright side, the Anderson Center’s California Consumer Sentiment Index increased to 94.2 in the third quarter of 2012, a level not seen since the third quarter of 2007.”
- “Another positive development is the rebound in construction spending…construction spending…is projected to grow by 10.0 percent in Orange County in 2013.”
- “Overall, our forecast calls for an increase of 1.8 percent in total payroll employment in Orange County in 2013…Job growth in construction, professional & business services and leisure & hospitality will outperform all the other sectors of the economy in Orange County and California.”
- “The combination of job and real income growth along with historically low mortgage rates bode well for the housing market.”
- “In fact, Orange County’s notices of default is currently the lowest in Southern California and showed the sharpest decline in the third quarter of 2012 and is also at its lowest level since the housing slump.”