|May 26, 2005
Mike Stepanovich, 661/664-2456 or
Kern County’s economy continued to improve in the first quarter of 2005 as most indices showed solid gains, according to the latest issue of the Kern Economic Journal, published by California State University, Bakersfield.
“Business and households have become more optimistic about local economic conditions,” said Abbas Grammy, CSUB applied economics professor and publisher of the journal. “The economy added $150 million of personal income and expanded at an annual rate of 4.3 percent.”
Researchers who study the county’s economy said that while the Kern County economy continues to grow, a concern is the continuing decline in housing affordability. The median housing price soared in the first quarter to $195,200, which dropped the county’s affordability index to 37 percent. This means that less than two out of five Kern County residents can afford to purchase a home. The median housing price increased 4.5 percent in the first quarter alone. Since the first quarter of 2004 the county’s median price has appreciated $53,530, or 39 percent.
The Business Outlook Index continued to recoup some of the losses it suffered between the third and fourth quarters 2004. The index increased from 126.4 in the fourth quarter 2004 to 127.8 in the first quarter 2005. “These numbers indicate that business managers are more optimistic about local business conditions,” Grammy said. While it was still down from the 138.9 recorded in the second quarter 2004, it was higher than the first quarter 2004. “This is positive news for Kern County,” he said.
The Bakersfield Consumer Sentiment Index broke the record set the previous quarter, indicating that consumers are bullish on the local economy. The index reached a value of 146, topping the previous record of 144. “The index has recorded an extraordinarily high value for the second consecutive quarter,” said Mark Evans, CSUB economics professor. “The high reading results from solid outcomes in recent months combined with optimistic expectations for the coming year. There were very few pessimists in our survey.”
Other trends reported in the Journal that reflect Kern’s economy:
- Personal income and labor productivity in the county continue to rise, Grammy reported.
- Non-farm employment grew at a faster rate than the previous quarter. When adjusted for seasonality, nonfarm employment increased at a 3.7 percent annual rate.
- Crude oil prices continue at record and near record highs. The average price of San Joaquin Valley heavy crude, the area’s benchmark oil, declined 22 cents per barrel from the fourth quarter 2004 to $35.13. However, the average price of a barrel of local crude is nearly $6 higher than a year ago.
The latest issue of the Kern Economic Journal also includes a detailed look at the feasibility of CSUB’s athletic program moving to NCAA Division I, and Kern County’s economic development strategy.
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 CSUB Economics Department. "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."
A subscription to the Kern Economic Journal costs $60 per year for the print issue, $80 for the electronic issue, including archives; and $100 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) 654-2466, or e-mail Grammy at firstname.lastname@example.org. You can also visit the journal's website at www.csub.edu/kej.