Center for Strategic Economic Research
The Sacramento Region Business Forecast highlights the results of econometric models that analyze the relationship between indicators of economic performance, job growth, and unemployment rates 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. Total Nonfarm employment is made up of 11 major industry sectors that group the Regionís establishments together based on similarity in business processes used to produce goods or services. The unemployment rate measures the extent to which residents are able to find employment opportunities, specifically capturing those individuals who are part of the labor force and are not working, but are able, available, and actively looking for work. A forecast of job growth, major sector performance, and unemployment rates provides the business and economic development communities an outlook for the Regionís economy 12 months into the future.

The Center for Strategic Economic Research (CSER) developed the forecast to serve as a forward-looking resource for the Sacramento Regionís business and economic development communities. It is currently the only locally-produced regional economic forecast for the six-county Sacramento Region.

THIRD QUARTER 2013 UPDATE

Annual job growth in the six-county Sacramento Region will slow over the next 12 months according to the third quarter 2013 update to the Sacramento Region Business Forecast. On average, over the November 2013 and October 2014 forecast period, the Region will see 0.8 percent annual job growth, which reflects a gain of roughly 6,600 jobs. Over the past 12 months, the Region posted annual job growth averaging 1.1 percent, adding just over 9,800 jobs. The forecast shows positive job growth remaining steady through the end of the year before dipping through the third quarter of 2014 and moving back up again in the fourth quarter.

Sacramento Region Annual Job Growth Outlook
November 2013 to October 2014 Forecast


Data Sources: Historical from CA Employment Development Department; Forecast from CSER Business Forecast model


Major Sector Annual Average Job Growth Outlook
Q4-13 to Q3-14 Forecast, Sorted by Sector Size


Data Sources: Historical from CA Employment Development Department; Forecast from CSER Business Forecast model

The forecast shows positive job growth in five of the Sacramento Regionís eleven major sectors over the next 12 months. In comparison, during the last 12 months, the Region saw positive job growth in six sectors. Half of the Regionís major sectors are expected to see improved or similar performance relative to the previous year. As the economy picks back up, the third quarter of 2014 is anticipated to be the healthiest for most sectors while weaker performance is expected over the fourth quarter of 2013 and the first quarter of 2014 across the board. Of note, the forecast shows the Manufacturing sector shifting to negative job growth in the next 12 months, mimicking trends in the state and nation and continuing the pattern shown at the beginning of the fourth quarter of 2013. Although negative job growth is anticipated in six sectors in the coming year, for the most part, rates of decline will be slower than in the past 12 months. With the expected 6,600-job gain across the November 2013 to October 2014 forecast period, total Nonfarm employment in the Region will reach more than 882,000, which is similar to employment levels seen in 2003 and 2004. These gains will continue to build up from losses over the severe regional recessionóby October 2014, the employment base will be only about 71,000 lower than the peak from the summer of 2007.