The NEW 2020 Economic Outlook Forecast
The economic shutdown due to the COVID-19 pandemic coincided almost perfectly with the Santa Clarita Valley Economic Development Corporation’s previously scheduled, and ultimately canceled, Economic Outlook Forecast on March 12. In the six months that have ensued, SCVEDC's economist, Dr. Mark Schniepp of California Economic Forecast has been keeping a close eye on the rapidly evolving economic impacts of the shutdown on a national, state and local level. On September 17, 2020, Schniepp presented a revised Economic Outlook Forecast at our rescheduled virtual conference. Though an economic recovery is underway, he predicts it will proceed slowly for the rest of the year and that full recovery will be out of reach until a vaccine or cure for COVID-19 is widely available.
However, there are some signs that the labor market is coming back to life as U.S. unemployment dropped to 9.1% last month. California unemployment rates are still higher due to the reversal of summer openings and ongoing closures of non-essential businesses. California remains the most locked down state in the country. Last month’s unemployment rate was 11.4% for the state and 15.3% for the city of Santa Clarita. Nationwide, about half of those who lost their jobs are back to work, compared to 30% in California. There are still many unknowns that will factor into how well our economy recovers: Will there be more layoffs? Will Congress approve more stimulus?
In the Santa Clarita Valley, there has been some job growth. Of the 11,000 jobs lost, over 3,600 have been recovered. Job losses have been uneven with most drastic impacts to travel, entertainment, and food and beverage industries. Dr. Schniepp predicts that the remainder of jobs lost will be recovered over the next two years. New development construction of both commercial and residential properties has carried on throughout the shutdown, which will continue to spur the economic recovery in our region.
According to Dr. Schniepp, the national economic recovery will progress, but at a slower pace than the last few months. He predicts more layoffs in industries most impacted by ongoing travel restrictions like airlines and hotels, and he further believes that the lack of schools opening will halt additional economic recovery in other industries for the rest of 2020. In California, Schniepp predicts that the economy will remain about “half open” for the rest of the year and schools will remain closed through fall. When a vaccine becomes available in late 2020 to mid 2021, the economy will begin to open more quickly, and Schniepp predicts that the pandemic will end sometime in the summer of 2021.
To watch the entire Virtual Economic Forecast, download speaker presentation slides, or access Dr. Schniepp’s updated Economic Outlook Book, please visit www.scvedc.org/outlook.
The Santa Clarita Valley Economic Development Corporation is a unique private / public partnership representing the united effort of regional industry and government leaders. The SCVEDC utilizes an integrated approach to attracting, retaining and expanding a diversity of businesses in the Santa Clarita Valley, especially those in key industry clusters, by offering competitive business services and other resources. 661.288.4400 | firstname.lastname@example.org