Campus: CSU Bakersfield -- February 19, 2003
The Bears Are Out Of Hibernation And They've Taken
A Bite Out Of The Local Economy, According To Survey Published By CSU
The bears are out of hibernation in Kern County and they've taken a
bite out of the local economy, according to a survey in the latest issue
of the Kern Economic Journal, published by California State University,
Local business managers are now pessimistic about local economic conditions,
the Journal reported. The Business Outlook Index declined 17 points
from 112 in the third quarter to 95 in the fourth quarter.
Likewise, Kern County consumers' confidence continues to slip. The Kern
Consumer Sentiment Survey fell another 15 points in the fourth quarter
to 103, its lowest point in a year.
And after three quarters of steady decreases, the Kern County unemployment
rate rose in the fourth quarter from 9.8 percent to 10.4 percent. Bakersfield's
jobless rate rose from 7.9 percent in the third quarter to 8.5 percent
in the fourth quarter.
Despite the gloomy economic news, a few bright spots were evident. In
a story detailing local economic indicators, the Journal reported that:
- Personal income in both Kern County and Bakersfield continued its
steady rise. Personal income per capita also continues to rise.
- While economic growth slowed from 1.8 percent to 1.5 percent in
Kern County, it accelerated from 1.2 percent to 1.9 percent in Bakersfield.
- Bakersfield remains one of the most affordable places to live in
A key factor in the decline in consumer confidence caught the attention
of Mark Evans, an economics professor and interim dean of CSUB's Extended
University Division, who conducts the quarterly survey. The percentage
of households "indicating they were better off than a year ago
plummeted from nearly 50 percent to 20 percent," Evans said. "The
percent indicating they were worse off nearly tripled from 8 percent
to 21 percent. This is a troubling development."
The Business Outlook Survey is cause for concern, said Abbas Grammy,
CSUB economics professor and publisher of the Kern Economic Journal.
"For the first time in three years business managers have become
pessimistic about the local business outlook," he said. "Several
local, regional, national and international factors have contributed
to forming these negative perceptions."
Factors contributing to the gloomy business outlook include:
- The state's massive budget deficits, and cuts targeting education,
local government and non-profit organizations.
- The threat of war against Iraq causing uncertainty in the stock
- Outsourcing of production to Asian countries resulting in a greater
flow of cheap imports.
- Lack of qualified labor.
But there were also some glimmers of hope, Grammy said, including:
- Low interest rates.
- Taxable sales in Kern County and Bakersfield held steady and showed
increases through the fourth quarter 2002.
- The price of local crude oil remains high.
The latest issue also includes a detailed look at Kern County's housing
market. A story by CSUB economics student Damon Murillo examines local
housing demand, and a story by CSUB economics student H. Michael Kunz
focuses on the effect of urban development on housing prices.
The Kern Economic Journal is a quarterly publication focusing on local
economic trends and developments. The journal provides the community
with economic information produced by the CSUB Economics Department.
"What we provide is local economic news," Grammy said. "This
helps local business people make better decisions. We study local economic
trends to determine how the local economy is progressing."
A subscription to the Kern Economic Journal costs $50 per year, and
$75 per year for both hard copy and online, including access to the
archives. For a free initial copy or more information about any of the
studies published in the journal, please call (661) 664-2466, or e-mail
Grammy at email@example.com. You can also visit the journal's website
CONTACT: Mike Stepanovich, 661/664-2456; firstname.lastname@example.org