Here's a switch: Merced County's employment outlook is brighter than most of Northern California.
At least that's what a leading economic forecaster is predicting. An analysis by Massachusetts-based IHS Global Insight contends Merced will get back all the jobs it has lost by fall 2012.
San Joaquin County won't return to its pre-recession employment peak until spring 2013, and Stanislaus County's job market won't recover until spring 2014.
"We do have Merced coming out stronger in the long term," said James Diffley, IHS managing director of U.S. regional services.
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Diffley said his company's analytic model suggests Merced's economy will grow faster than most of its northern neighbors, partly because of its University of California campus and population growth.
But some of IHS Global Insight's statistics for the region seem suspect.
Example: Its housing construction statistics are incorrect and it apparently doesn't track foreclosures.
The company based its forecasts, in part, on statistics showing home building was beginning to expand again. It estimated that 95 Merced homes started construction this January, February and March. In reality, six new home permits were issued during those months, and home construction levels have declined about 99 percent since 2006.
Global Insight's statistics don't include foreclosure data. Merced has one of the nation's highest mortgage default rates, with an estimated 15 percent of all mortgages 90 days or more delinquent. Nearly 5 percent of Merced houses are owned by banks, which haven't been able to resell them since foreclosing. That's seven times higher than the national rate for bank-owned houses.
Better data for the state
"For California as a whole, we get good current data," said Diffley, who acknowledged his company's county-by-county data may not be as adequate. "The economic indicators are far different in the San Joaquin Valley, and we're not appreciating that."
Economists who routinely focus on the Northern San Joaquin Valley see things a little differently than Global Insight.
"My assessment would be that San Joaquin has the brightest economic prospects of these three counties over the next few years, although it is more accurate to say least dim," said Jeffrey A. Michael, director of the Business Forecasting Center at Stockton's University of the Pacific.
"At this point, both Merced and Stanislaus look to have equally miserable 2009s, and I wouldn't say one looks better than the other in 2010," Michael said. "To the extent that Stanislaus has already lost more employment ground than Merced, I would agree with Global Insight's assessment that it will take longer for Stanislaus to return to peak employment."
But Merced's economy is more closely tied to agriculture, which Michael said is having a difficult year.
Global Insight's projections looked only at nonfarm sectors, so it didn't take job losses because of dairy closings or drought into consideration.
"It is true that employment declined more in Stanislaus and San Joaquin than Merced through most of 2007 and 2008. As a result, Stanislaus is currently the furthest below peak employment and thus has the most ground to make up," Michael said. "The return to peak employment date is more backward looking than forward looking."
Bee staff writer J.N. Sbranti can be reached at email@example.com or 578-2196.