The prognosis: Expect a disappointingly slow, but steady, recovery, led by the San Francisco Bay Area’s high-tech sector.

That was the conclusion offered by Garrick Brown, an economic researcher at Cassidy Turley who spoke before the Woodland Chamber of Commerce during the group’s monthly luncheon on Thursday.

Brown, who specializes in commercial real estate, told the crowd, “If you track commercial real estate, you know exactly what’s going on where.”

What’s going on is a “retread” of last summer, he said, characterized by an apparent paralysis and “freeze on the economy.”

Brown, speaking before about three dozen people at the Yolo Fliers Club, went on to describe the factors involved, and pointed to some hopeful signs along the way.

The main causes for the current economic slowdown, Brown said, are energy costs, this summer’s heat wave, problems with the European economy and the slow growth of “emerging economies.”

As for energy, “Gas seems to like being $4 (a gallon). It just does,” Brown said.

He went on to speak about how the heatwave and drought in the Midwest has led to price increases in commodities.

That in turn affects prices in stores and restaurants, hurting both retailers and consumers.

The other factors are global in scope, affecting exporters, travelers and “banks and their willingness to lend,”

he said.

U.S. debt also remains an issue, he noted, as does political uncertainty and dysfunction.

As a result of all these problems, Brown said, the current fiscal quarter was the worst since the recovery began.

Positive signs

“We’re at bottom, we’re not getting any worse. But are we really getting better?” Brown asked.

His answer was mixed.

On the one hand, Brown believes “pent-up demand” will lead to new real estate growth, especially in single-family homes and rentals. He noted that in San Francisco these days, a tiny 600-square-foot apartment can go for $2,600 a month — a number that drew shocked gasps from attendees.

Also, Brown said, 3.1 million jobs have been created since January 2011 — including 21,800 locally — with almost every sector growing.

On the other hand, the only sector not growing is government jobs, which Brown said is in “full-brown retraction mode.”

And that happens to be the biggest sector in Sacramento, with 27 percent of the workforce in the public sector. As a result, the region is lagging behind others across the nation.

“We are recovering, but it’s turtle’s pace,” Brown said.

Going forward

Brown said he isn’t worried about the most dire economic forecasts, thanks to government stimulus and the Fed keeping interest rates low.

“The market has generally responded very well to that,” he said.

Instead, he said, “We’re essentially looking at more of the same” — steady, but very slow, economic growth.

He encouraged business leaders to diversify the local economy as much as possible, and noted that the Bay Area’s sustained growth — San Jose and San Francisco are currently the top two local economies in the country — could work to our advantage.

One reason why is that as real estate prices continue to rise there, people move out to Sacramento and Yolo counties for more affordable living.

“We have become the escape valve for the Bay Area,” Brown said.

That’s especially relevant given the youth of the high-tech workforce, with most of the engineers at Google, Apple and Facebook in their 20s and 30s. As they grow older, he predicted, many will get married, have kids and move to the suburbs.

“There’s going to be a point where they want good schools, safe streets and square footage,” Brown said.

And that’s where Woodland can take advantage — so long as the city is able to provide attractive places for Bay Area emigres to settle down.

Follow Don Frances at twitter.com/donjfran

Article source: http://www.dailydemocrat.com/news/ci_21502445/researcher-woodland-chamber-expect-slow-but-steady-economic