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Goleta Weathers the Worst of Economic Forces — So Far

The 2009 Goleta Valley Economic Forecast finds the city's economy is growing, albeit slowly.

Goleta’s population has been declining, and job growth has been flat. Nevertheless, productivity in the Goleta Valley has been increasing. The reason?

“The job composition has changed,” Dr. Bill Watkins, an economist with the UCSB Economic Forecast Project. He presented the 2009 Goleta Valley Economic Forecast on Friday morning at Fairview Cinema Twin to the Goleta Valley Chamber of Commerce. It was the 14th annual forecast.

Watkins said Goleta’s economy is growing slowly despite the battering California’s economy has taken. Some of that is because of a diversified economy, which includes well-paying jobs in the manufacturing sector and the re-emergence of jobs in oil exploration.

Retail sales and bed tax, however, have been “disappointing,” Watkins said.

Goleta residents, he said, should expect more of the same for 2009. It’s good news, he said, given the overall state of the economy.

“Where everybody else is looking at negative numbers, we’re looking at numbers just over 1 percent; that’s pretty good for right now,” he said. While Goleta has taken hits in the housing industry, the effects haven’t been as fierce as in other communities.

The oil industry, he predicted, will grow substantially in the next year because of the high oil prices. On the other hand, the resulting high gas prices may force people who commute to the area to reconsider their jobs, making it difficult for businesses to train and recruit.

High oil prices, meanwhile, have created somewhat of a boom in the county, according to the report. Santa Maria is experiencing most of the effects of this boom. Thus, Santa Barbara County is also avoiding a recession, with a projected 0.8 percent increase in the Real Gross County Product by the end of this year.

California, according to the report, is “likely in a recession.” Given the state’s exposure to the housing crisis and the ongoing budget crisis, the report predicts a decline of a little more than 1 percent in 2008, leading to a decline in a predicted 100,000 jobs by the start of 2009. The population, likewise, is declining.

Despite the doom and gloom of the economy, the U.S. economy is not in a recession, according to the report. The combination of rising foreclosures, falling house prices and high fuel costs have left Americans with less and altered consumer spending habits, but the Gross Domestic Product grew 3.3 percent in the second quarter.

“We always hear about the overburdened consumer,” Watkins said. In fact, he said, the increase in debt is not high, and the rate of credit card delinquency is not high, he said.

What could possibly become a burden, he said, is banks’ tightening of their lending standards. More than 80 percent of banks are making it harder to get a loan.

“That’s a problem because the way small businesses grow, the way we create jobs and keep the general economy moving is through bank loans,” he said.

Noozhawk staff writer Sonia Fernandez can be reached at [email protected]

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