Ventura County sees decline in economic output

The growing housing affordability crisis and an inability to attract and retain talent continue to thwart growth in Ventura County, which has seen a decline in economic output for two years straight, a new study shows.

The report, prepared for the Southern California Association of Governments (SCAG), shows that Ventura County’s Gross Domestic Product fell by 0.4 percent in 2017, following a 0.9 percent drop in 2016. And while jobs overall are growing, key employment sectors all come with caveats.

“Whether you look to jobs or GDP, the state of the Ventura County economy is weak,” said the report’s author, Michael Fienup of the Center for Economic Research & Forecasting. “We hesitate to use the word recession, but we don’t know what else to call two consecutive years of economic contraction.”

The discouraging outlook for Ventura County is in stark contrast to that of most of the six-county SCAG region, according to in-depth analyses by top economists to be released December 6 as part of the Ninth Annual Southern California Economic Summit at the L.A. Hotel Downtown. The Summit, co-sponsored by SCAG and the Southern California Leadership Council (SCLC), will feature wide-ranging discussions on the region’s future, including its growing role in the innovation economy and the impact of emerging technology in the area of transportation. More than 400 business and elected leaders are expected to attend.

“Southern California is one of the fastest-growing population and economic centers in the world, and the decisions we make now will impact us for generations to come. The Economic Summit is a great opportunity for stakeholders throughout our region to better understand the opportunities and challenges that are in front of us, and set the stage for what we believe is an extremely promising future,” said SCAG President Alan D. Wapner.

Oxnard City Councilmember Carmen Ramirez said Ventura County’s economic outlook won’t improve until its challenges are addressed.

“Housing affordability is a huge impediment to attracting both businesses and employees. We need to find a way to build more homes while avoiding sprawl and make it possible for workers and their families to live here,” Ramirez said.

The problem, according to Fienup’s study, can be traced to “the most stringent growth restrictions of any county in the United States.” Without enough new construction, home prices well exceed wage growth. Largely due to this, Ventura County experienced a negative net migration of 3,700 people last year alone.

“Without substantial, almost unimaginable improvements in housing affordability, Ventura County’s future is one of an increasingly bimodal economy – an economy of haves and have nots,” Fienup wrote.

All of this has had a profound impact on the job market as well. One of the biggest employment sectors, leisure and hospitality, typically attracts employees from outside the county due to its low wages.

“Jobs in leisure and hospitality are up more than 20 percent over the past 10 years. Meanwhile, (better-paying) jobs in manufacturing, which account for more than 23 percent of the county’s total economic output, continue to slide with little hope of relief on the horizon,” the report stated.

Even a decline in the unemployment rate – from its 2012 high of 9.9 percent to 3.6 percent today – can be traced to negative migration and a reduction in the county’s workforce.