N. California and Sacramento-Area Forecasts Reveal Local Issues

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The local economies of far Northern California and the Greater Sacramento Region should continue growing in 2020 and possibly well into 2021 as both areas show potential for continued, steady expansion in employment and business activity.

However, unique issues impacting those regions include a lack of workers and “skills gap” that many local employers continue citing, a slowdown in business and consumer lending, continued recovery from wildfires of the past few years, and a tight housing market.

That’s according to the most recent forecasts published by local academia and other experts during conferences held throughout January. The keynote speakers’ opinions spotlight intriguing viewpoints, trends and projections so your credit union can plan appropriately:

Northern California
The following is a synopsis (click here for the entire forecast report):

  • Northern California employers and jobs have not fled the broader region en masse since the destructive wildfires ravaged certain communities over the past few years.
  • Local Northern California workforce development and business leaders remain on the alert regarding a recession in the future.
  • Recent homebuilding in Northern California, even at a small pace, has been a major indicator of community resilience and recovery post-wildfires.

Greater Sacramento Region
The following is a synopsis (click here for the entire forecast report):

  • The Greater Sacramento region’s economy is expected to remain “healthy” in 2020.
  • The Greater Sacramento region’s consumer sentiment is at its highest level since the inception of the SBR/SAFE Credit Union Consumer Sentiment Survey.
  • Sacramento County’s Small Business Administration (SBA) lending activity in 2019 was good, but loan approvals fell below the two-year moving average (primarily due to a slowdown in certain areas of Sacramento County).
  • The Greater Sacramento region’s real estate market is signaling different dynamics depending on the sector.
  • Greater Sacramento-area credit unions and banks had a “great year” in 2019 from an income perspective, but 2020 looks to be much more challenging with slowing loan growth and buoyant funding costs.
  • The Greater Sacramento regional workforce skills gap is at its widest margin since 2017, with voluntary employee turnover expected to increase even more.

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