Economic report shows progress

More jobs expected to be added this year

jsmith@mercedsunstar.comFebruary 13, 2013 

A rebounding job market will boost Merced County's economy in the near future, according to the latest figures from the University of the Pacific Business Forecasting Center.

"Merced has been gradually adding jobs, not in a big way but slowly," said Jeffrey Michael, director of the Business Forecasting Center. "It's progress."

This year, county employers are expected to add about 2,400 nonfarm jobs, data from the center's forecast, released Tuesday, showed. Merced County lost roughly 2,500 jobs between 2007 and 2011.

The expected increase would bring Merced County back to its prerecession levels, with about 58,500 jobs, according to the center's quarterly report. That's something Stanislaus and San Joaquin counties aren't expected to do until 2017.

"Despite the incredibly high unemployment, the extent of job loss has not been as great," Michael said. "A lot of that is due to UC Merced, which has been adding jobs throughout the downturn."

The unemployment rate will drop to 16.3 in 2013 from 17.4 last year, the center predicts. That number is expected to remain at more than 12 percent through 2017.

The jobs increase will be driven by employment in government, education, retail and construction, Michael said. At the same time, the county could see about 300 jobs lost in its information sector, which is mainly composed of telecommunications and media.

The modest gains are expected to reflect a wider trend of economic improvement in the Northern San Joaquin Valley, according to the forecasting center.

The future of Merced will depend largely on the success of surrounding regions, Michael said. Almost 13 percent of workers in the county are employed in the Bay Area.

"Only about half of Merced County workers work in Merced County," Michael said. "Most are headed north to Modesto or the Bay Area."

"It means the unemployment rates are affected by the counties around you," he added. "You're definitely going to get spill over affects as the economy improves to the north."

The center's mostly positive forecast for Merced County follows an upbeat report earlier this month that showed home prices in the region are on the rise after taking a beating during the recession.

The median home price in the city of Merced was $119,000 in 2012, an increase of 8 percent over 2011, according to DataQuick, a real estate research firm. Those numbers, Michael said, are still low but improving and should continue to rise.

Even with its lower cost of living, Michael said, Merced County has yet to see an influx of people wanting to relocate to the area.

The price of a single three-bedroom house in San Jose is six times the cost of a similar sized house in Merced County, he said.

"When we saw these price differentials in the past we saw a large increase in in-migration," he said. "Now the price deferential is higher than it's ever been. I don't see it yet, but certainly one of the key ingredients has re-established itself."

Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or

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