The forecast highlights the results of an econometric model that analyzes the relationship between a number of different indicators and job growth in the six-county Sacramento Region (El Dorado, Placer, Sacramento, Sutter, Yolo, and Yuba Counties). Job growth, or the year-over-year growth rate in Nonfarm employment, is one of the best and most closely monitored measures of regional economic performance. A forecast of this measure provides the business and economic development communities an outlook for the Region's economy 12 months into the future.

SRRI developed the forecast to serve as a forward-looking resource for the Sacramento Region's business and economic development communities. It is currently the only locally-produced regional economic forecast for the Sacramento Region.

JOB GROWTH OUTLOOK

Job growth in the six-county Sacramento Region will continue to deteriorate over the next 12 months, reaching rates lower than it has seen in the past 20 years. Over the past 12 months, the Region posted annual average job growth of -3.2 percent—the forecast for the next 12 months shows an average of -6.0 percent, close to twice as weak as the previous period. This employment growth rate equates to an annual average loss of over 54,000 jobs. For the forecast period of April 2009 to March 2010, year-over-year employment growth rates are expected to range between -5.2 percent to -6.7 percent. The Region’s job growth will dip slightly and then remain somewhat stable through the second and third quarters of 2009 before falling again in the fourth quarter of 2009 and floating at a notably low level through the first quarter of 2010. Absent some external factor that cannot be accounted for in examining the dynamics driving regional economic behavior, the forecast offers no hope for significant recovery in the Sacramento Region during the next 12 months.

Sacramento Region Business Forecast
Sacramento Region Job Growth Outlook
April 2009-March 2010


Sacramento Regional Research Institute, April 2009
Data Sources: Historical from California Employment Development Department Forecast from SRRI Sacramento Region Business Forecast model
Note: Job growth reflects year-over-year Nonfarm employment growth rates.

Sacramento Region Average Job Growth Outlook
Sorted by Sector Size


Sacramento Regional Research Institute, April 2009
Data Source: Historical from California Employment Development Department Forecast from SRRI Sacramento Region Business Forecast model
Note: Job growth reflects year-over-year employment growth rates.

All of the Sacramento Region’s 11 major sectors, with the exception of Educational & Health Services, will see slower job growth in the next 12 months compared to growth in the past 12 months. Only two sectors are expected to see positive annual average job growth in the coming 12 months including Educational & Health Services and the very small Natural Resources & Mining sector. The remaining 9 sectors will all experience further annual job losses in the forecast period. The majority of the major sectors will see their best performance, with less severe rates of job losses, during the third quarter of 2009. The weakest performance for the majority of the major sectors is expected in the first quarter of 2010. It is interesting to note that the Construction sector is not expected to enter a recovery period in the coming 12 months; rather, job growth is forecast to decline even further in all four quarters. Another sector affected substantially by the housing slump as well as the recent turmoil in the financial markets, Financial Activities, is also forecast to see performance drop off further in each successive quarter.