DEC. 6, 2002
CONTACT: Mike Stepanovich, 661/664-2456; mstepanovich@csub.edu

Kern County received mixed economic news in the third quarter, according to a survey in the latest issue of the Kern Economic Journal, published by the Center for Economic Education and Research at California State University, Bakersfield.

Local business managers are much less optimistic about local economic conditions than they were in the second quarter, the Journal reported. The Business Outlook Index declined 13 points in the second quarter.

Likewise, Kern County consumers were not as confident as they were the previous quarter. The Kern Consumer Sentiment Survey dipped seven points, signaling a declining optimism among Kern County consumers.

But the local economy also experienced some bright spots. In a story detailing local economic indicators, the Journal reported that:
Kern County's jobless rate dropped into single digits, falling from 10.9 percent in the second quarter to 9.8 percent in the third quarter.
Kern County's economy grew at an annual rate of 2.1 percent.
The county's median price of a single-family home is 35 percent of the state's median price. So even though the median price for a home in Kern County rose 7.1 percent, Bakersfield remains one of the most affordable places to live in California.

The decline in consumer confidence didn't alarm Mark Evans, an economics professor and interim dean of CSUB's Extended University Division, who conducts the quarterly survey. "The modest decline ... does not appear to be problematic," he said. "Households spent less on discretionary big-ticket items, but this allowed them to improve their balance sheets. The decline in expectations was not toward pessimism, but from expecting improvement to expecting the current conditions to continue."

The Business Outlook Survey is somewhat troubling, said Abbas Grammy, CSUB economics professor and publisher of the Kern Economic Journal. After two optimistic quarters, local business managers hedged their bets. "The majority of the business managers perceived that financial conditions of their companies remained the same this quarter," Grammy said. "They also projected no improvements next quarter."

Factors contributing to the softening business outlook include:
The labor dispute at West Coast ports.
Lower farm prices and higher energy costs.
Volatility of the stock market.
Corporate downsizing and layoffs.
Lack of qualified labor.

But there were also some reasons for optimism, Grammy said, including:
Low interest rates.
Construction boom.
Local job creation efforts.

The Kern Economic Journal is a quarterly publication focusing on local economic trends and developments. The journal provides the community with economic information produced by the center. "What we provide is local economic news," Grammy said. "This helps local business people make better decisions. We study local economic trends to determine how the local economy is progressing."

The latest issue also includes:

A story on the economic impact of the Kern Economic Development Corp.

A story on the economic impact of the Bakersfield Association of Retarded Citizens.

A story on the economic impact of child care in Kern County.

A subscription to the Kern Economic Journal costs $50 per year, and $75 per year for both hard copy and online, including access to the archives. For a free initial copy or more information about any of the studies published in the journal, please call 661/664-2466, or e-mail Grammy at agrammy@csub.edu. You can also visit the journal's website at www.csub.edu/kej.