RIVERSIDE – The regional economy is making a comeback, but the promise of future growth depends largely on what happens at the federal level, according to an economic report released today.
The 2013 Riverside/San Bernardino Economic Forecast, a joint project of Los Angeles-based Beacon Economics and the UC Riverside School of Business Administration, indicates that the Inland Empire economy is gaining ground thanks largely to a resurgent real estate market.
According to the forecast, which will be formally unveiled and discussed during an 8 a.m. conference at the Riverside Municipal Auditorium, median home prices in the inland region have shot up 28 percent since the second quarter of 2012.
Affordability is driving demand for housing and boosting economic activity region-wide, according to the report.
”This region has a very unique blend of business strengths and affordability that are steadily driving us towards a more diversified economy and that have made us one of the fastest growing areas in California,” said Yunzeng Wang, interim dean of the UCR business school.
According to Wang, the transportation and retail sectors are poised for expansion, and the region’s burgeoning high-tech sector is also gaining ground and could be a major growth driver — provided the national economic picture doesn’t darken again.
Beacon Economics co-founder Chris Thornberg worried about ongoing conflicts at the federal level restraining economic activity.
”The recovery is clearly continuing, but we would be further along were it not for the inability of our national elected leaders to pass a budget and negotiate reasonably with each other over long-term fiscal issues,” Thornberg said.
He said the national economy has ”not grown at the pace it would have” had there not been impediments to spending, referring to showdowns over the so-called ”fiscal cliff,” or debt ceiling.
Congressional budget hawks have battled the Obama administration and its allies in the U.S. House of Representatives and Senate over ballooning budget deficits and a national debt that now exceeds the country’s annual gross domestic product.
The forecast did not anticipate any ”negative impact on the U.S. economy” from the Patient Protection & Affordable Care Act, better known as Obama Care, which the authors characterized as necessary to ”finally fix” problems in the nation’s healthcare system. Critics say the law will have the opposite impact.
Minus a major pullback in consumer spending, the forecast predicted the economy would remain in a growth pattern, albeit a slow one, over the next several years.