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April 17, 2003

Forecast: State budget troubles have region struggling

Full study

In March, for the first time in two years, California’s economy as a whole outshined the Sacramento region’s as state budget woes continued to take a toll on local job growth, according to the quarterly CSUS Forecast from the California Institute for County Government at California State University, Sacramento.

The report says the Sacramento area’s job growth was .88 percent, down from 1.9 percent a year ago, while the state’s was 1.52 percent, significantly up from -0.58 percent a year ago. In fact, the state’s job growth is also well ahead of the nation’s, which was -0.19 percent in March.

The report says slow job growth nationally as well as reduced state spending in the area are to blame for the region’s economic troubles. It also says prospects for improvement in coming months are dim because of expected layoffs of state workers and possible state tax increases. It predicts there will not be a return to strong job growth in the region anytime in the next 12 months.

Growth in each of the region’s three main sectors – construction, manufacturing and government – was off slightly from February to March. Manufacturing job growth remained negative.

The forecast accounts for revised figures from the Employment Development Department which, contrary to previous reports of declines, show modest job growth in the Sacramento region last year.

The quarterly 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.

More information is available from Matthew Newman, director of the California Institute for County Government, at (916) 324-0796, or at the institute’s website at Additional media assistance is available by contacting CSUS public affairs at (916) 278-6156.


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