The 2023 South County Economic Summit took place at the Granada Theatre in downtown Santa Barbara on May 24, 2023. The event is part of the UCSB Economic Forecast Project, which provides insight into Santa Barbara County’s economy every year. Director Peter Rupert gave the local update.
“The unemployment rate is pretty much as low as it’s ever been in history. The unemployment rate in Santa Barbara, same story, so the labor market is super strong,” Rupert said.
He said the local economy is growing, though not quite at the pre-pandemic pace, and some markets are doing better than others.
“And now, leisure and hospitality is kind of back to where it should be. Retail continues to decline,” he said.
Rupert said retail was in decline even before the pandemic, and it’s not clear why. Some people point to online sales as the culprit. But he said that explanation doesn’t hold up since retail is thriving just down the road in Ventura.
Ted Egan, chief economist for the City and County of San Francisco, was a guest speaker. His talk titled “A cautionary tale for California cities,” addressed how post-pandemic changes like remote work affects the economy — especially in the tech industry. He said the challenges facing San Francisco are relevant to cities across the state.
“The tech workers aren’t using up offices and the impact of remote work in our office market is really the crux of San Francisco’s troubles at the moment,” he said.
Egan said employment in the tech sector is still strong in San Francisco, it’s just less visible when workers are remote. He said empty office buildings exist in most big cities now, but San Francisco tops the list.
“Remote work, rising office vacancy, lower demand for offices – it’s a national phenomenon, but it’s very powerful in San Francisco and San Jose because the tech industry is the industry that’s really adopting this more than any place else,” he said.
Egan said in-office tech jobs were also driving the high demand for housing, and now, prices have come down – slightly.
“Before the pandemic, the average single-family home in San Francisco was six times the US average, now it’s four times the US average. Four is still a big number but that is a significant correction,” he said.
Christopher Waller, from the Federal Reserve Board of Governors, provided a national perspective. He said he expects the economy to continue to grow this year, and said his top priority is the same as last year – to reduce inflation.
The Federal Reserve Board has already raised mortgage rates multiple times to curb inflation, but Waller said it’s still too high.
You can find out more by going online to the UCSB Economic Forecast Project.
