The Business Journal hosted an economic forecast Nov. 16 that was surprising: The economists said the San Fernando Valley economy stood above most others.
“The San Fernando Valley’s growth rate is strong no matter which geography you choose as a comparison,” said Matthew Fienup, the executive director of the Center for Economic Research and Forecasting at California Lutheran University who delivered the economic forecast.
The economists determined the Valley’s gross domestic product last year increased by 2.6 percent. That’s much better than the 2.1 percent increase for Los Angeles County and vastly better than the astounding decrease of 2.7 percent in Ventura County.
That’s reassuring to Valley denizens, but to be candid, the local economy doesn’t feel that great. Our office is in the Valley, and business activity around us seems decent but not brisk. It’s as if we’re sauntering, not jogging.
Maybe this is the reason: 2.6 percent growth is still not that fast. Nationally, average real GDP growth in the postwar period right up to the great recession was greater than 3 percent a year. Those of us who experienced the 4- and 5-percent economy in the 1980s and ’90s (a few hiccups notwithstanding) recall how dynamic and bountiful it felt. Yet we haven’t seen 3 percent growth nationwide since 2005; it was 1.84 percent last year.
Here’s my takeaway: since we’ve had a slow-growth national and regional economy for the better part of 12 years, we’ve become inured to the sluggish pace. The anemic seems normal. That makes the Valley’s 2.6 percent growth (and it is expected to increase by that much or a little more over each of the next two years) appear good by comparison. We’ve spent such a long time in an economic winter that 2.6 percent growth seems fast. It’s kind of like a 50-degree day in Michigan in late February; it may feel warm to those who suffered through sub-zero weeks, but it’s still chilly to those of us who remember summer.
The economic analysis represents the first time the Business Journal partnered with Cal Lutheran’s economics team, commonly called CERF. (A summary of the forecast begins on page 17 of this issue.) By the way, the National Association for Business Economics last year awarded second place in its annual most-accurate-forecast competition to two economists at CERF, so they have bragging rights.
Here are a few other aspects of CERF’s report that stood out to me: