The San Fernando Valley economy is projected to grow up to 4.5 percent this year, higher than the national average, according to a forecast issued on Friday.
Bill Roberts, head of the San Fernando Valley Economic Research Center at Cal State Northridge, said major contributing factors to the growth are the entertainment, construction and health care industries being particularly strong.
“Construction is poised for a comeback. If you drive around the Valley you will see a lot more construction than two or three years ago,” said Roberts, who gave his forecast at the Valley Industry & Commerce Association’s annual Business Forecast Conference at the Burbank Airport Marriott.
Roberts based the forecast on 18 economic variables and the stocks of 22 largest public companies in the Valley and 18 largest public companies in Los Angeles County.
The Valley’s 4 percent to 4.5 percent growth rate was higher than that projected for Los Angeles County, at 3.1 percent, and that of the nation, also at 3.1 percent. The state as a whole was projected to grow less than 1 percent.
“The drought is going to take a significant toll on what’s going on in California,” Roberts said.
He also noted that the Valley’s real estate market is experiencing sluggish sales, though median home prices are gradually increasing. The 1,400 home sales in July and 1,300 home sales in August falls considerably below the late 1990s, when more than 2,000 homes could be sold in a month.
“Until we see population growth we will not see a boost in real estate growth,” he added.
Between 2009 and 2012, the Valley population grew 0.41 percent, less than half of the 0.98 percent state growth in the same period, Roberts said.
Also speaking at the forecast conference were Gary Schlossberg, senior economist with Wells Capital Management, in San Francisco, on the national economy, and Jeffrey Kravetz, regional investment director, in the Phoenix office of the private client reserve at U.S. Bank, on the California economy.