As we celebrate our 10th anniversary, I am pleased to share the 19th edition of the Sacramento Business Review – the most comprehensive, precise, and intellectually sophisticated analysis of the regional economy. For TEN years, our team has provided thoughtful predictions that have accurately forecasted the economic and business climate. With 18 of Sacramento’s very best financial analysts and researchers combining their skills and talent, the Sacramento Business Review is the most credible source of independent thinking, insights, and research on our economy in the region.
Following synchronized global growth that has picked up steam in the United States, Japan, Europe, and emerging Asia, the greater Sacramento region job growth has outpaced that of California – led by the construction, health care, leisure and hospitality, and business services sectors. After touching a high of 13.5% at the worst part of the great recession, the Sacramento region unemployment rate is now below 4%- and below both statewide and national averages. However, the region is not producing enough graduates in industries with the highest job openings, and clearly needs to realign the educational programs offered at universities to ensure we are producing those skills that are highest in demand.
Small business optimism remains high, especially in light of the recent tax reform, even though total Small Business Administration lending declined somewhat. Business sales and listings remain healthy even though sales prices have declined more recently. Consumer sentiment remains high, but is less optimistic and less positive compared to national averages. The real estate market has been strong and will continue to see another good year in 2018 due to mortgage rates remaining in check following the 10-year treasury yield. Vacancy rates will continue to decline, rents continue to increase, and median home prices continue their ascent, although moderately.
2017 was a spectacular year both for the economy and the stock market by any measure, setting records in many ways. Global pick-up in growth, low inflation, consumer and business confidence, recent tax reform, and improving fundamentals will all provide tailwinds for a solid 2018. As we celebrate a great economy, I still want to remind ourselves that the region desperately needs to do something about developing or attracting higher paid jobs and diversifying the job mix to prepare ourselves for the next recession.
Our 10th anniversary milestone represents the success and commitment of our analysts who do this work entirely as a public service to the region. We plan to continue doing this as long as our team continues to enjoy producing the forecast.
I invite your feedback. Please do not hesitate to let me know how we may improve future issues or if you wish to be a supporting partner. To download your free copy, please visit sacbusinessreview.com.
Sanjay Varshney, Ph.D., CFA
Chief Economist, Sacramento Business Review
email@example.com | (916) 799-6527