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January 16, 2002

New 'CSUS Forecast' predicts
Capital Region will avoid recession

Full study (.pdf)

The Capital Region should dodge the big employment declines now plaguing much of the country, say researchers with California State University, Sacramento and the California Institute for County Government.

Matt Newman talks to a reporter about the new CSUS Forecast at a campus press conference.Instead, they predict, the region will enjoy slight employment growth of about 1 percent during 2002. While that's a far cry from the strong 4 to 6 percent growth seen at the beginning of the last two years, it's an enviable position when compared to most other areas.

The job outlook is contained in the first "CSUS Forecast" for the region, which was released at a campus news conference today.

"The national recession won't be felt here nearly as strongly as it will be felt in other parts of the country or the state," says Matt Newman, director of the California Institute for County Government. "Essentially, it looks like we're going to avoid the worst of the recession in this region."

Construction employment growth is still positive in the region, the forecast says, and there is continued growth in new building permit applications for residential and non-residential development. The forecast also calls government employment a "stabilizing influence" on the region's economy. It says government employment in the region grew at a consistent 5 percent pace in recent years, though state budget troubles may threaten that trend. Regional manufacturing employment, which has been declining since early last year, remains a weak point. It has been on the negative side since August.

Employment Growth in the Sacromento ChartThe forecast says the Capital Region is well-positioned to benefit from an expected recovery sometime this year. It predicts low interest rates and low inflation - coupled with anticipated recoveries in the Bay Area, the state and the country - will lead to even stronger job growth here.

The new CSUS Forecast of the region's job outlook uses an econometric model of the six-county Capital Region with more than two dozen variables. It was developed by the California Institute for County Government with support from the CSUS Regional Development Initiative.

CSUS economics professor Suzanne O'Keefe and Robert Fountain, special assistant for regional development at CSUS, served as project advisors. Shawn Blosser of Databasix provided assistance with model development and programming.

Researchers plan to continue providing the forecast every quarter, and to make more extensive updates to the model each year.

Additional information is available by contacting Matthew Newman at (916) 324-0796, sending an e-mail to info@cicg.org, or by visiting the institute's website at www.cicg.org.

Additional media assistance is available by contacting the CSUS public affairs office at (916) 278-6156.


Full study (.pdf)


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