Are we at the tail end of a recession that didn’t really hit the Santa Clarita Valley, or are we in the midst of a recovery that nobody’s going to notice?
Economists and business leaders sent mixed signals at Wednesday evening’s economic forum— and maybe that’s the most interesting message of all.
The annual forums, co-hosted annually by The Newhall Land and Farming Co. and Valencia Bank & Trust, typically generate nothing but glowing reports about the area’s commercial and industrial market. It grew by leaps and bounds throughout the latter half of the 1990s, beginning with Princess Cruises’ world headquarters and continuing today with one new biomedical company after another.
That’s why it is apropos to take stock of the message delivered by Stuart A. Gabriel, director of real estate for the University of Southern California’s Lusk Center,.
“The (Santa Clarita) Valley is exposed to the slowing economy,” he said, urging our local captains of industry to heed the warning signs of shaky consumer confidence figures and competition in the commercial and industrial real estate sector.
The point was clear: Valencia’s commercial real estate market is still strong— and that’s where most of the valley’s business growth occurs— but it’s beginning to slow down.
We’ve heard the same precautions in recent weeks from officials with the nation’s biggest commercial real estate firm, CB Richard Ellis, which handles most of the commercial real-estate sales for The Newhall Land and Farming Co.
But how slow is slow? Mike Haviland, economic development manager for the city of Santa Clarita, made note of the area’s low unemployment rate— roughly half that of the rest of the county— and pointed out the strength of Santa Clarita’s hotel industry— it’s been leading the Southland in occupancy in recent months.
The home resale market has never been stronger, and even during the winter, when prices and volume generally dip, our home-for-sale market has been tipping all historic scales.
One pertinent indicator of the valley’s overall economic health is the condition of the valley’s locally headquartered bank. If business is good, business operators will be borrowing money for expansion, and if they’re borrowing money, the bank will report a profit.
Well, the local bank, Valencia Bank & Trust, reported all-time-high profits, revenues and loan volume for 2001— even though the Federal Reserve Board cut short-term interest rates 11 times last year, which theoretically eats into a bank’s profit margin.
Perhaps the underlying message on the economy is, we’re strong, but don’t take anything for granted. Pay close attention to what the competition is doing and don’t assume that what you were doing yesterday will be good enough tomorrow.
When you think about it, it’s the same message whether you’re trying to fill an industrial park or running a hot-dog stand