Strong Growth Projected for California

WASHINGTON — California will rack up double-digit growth in jobs, income and population in the next 10 years, outpacing the nation’s economic expansion, a California economic institute reported Tuesday.

California in the year 2005 will have 38.2 million people, a 10-year gain of 18.5%, according to the Center for Continuing Study of the California Economy. Those Californians will be working at 17.4 million jobs, a 19% increase, the study said, and enjoy total income of $1.1 trillion, a 35% gain.

“It is hard to think of a high-growth sector in which California is not an industry leader,” said Stephen Levy, director of the Palo Alto-based center.

After a slowdown in the early 1990s, “California has regained a leadership position in most of the nation’s future growth industries,” he said.

While the three A’s--aircraft, apparel and agriculture--made up the major share of the state’s economic base in the past, the wave of new growth will flow from advances in technology, foreign trade, tourism and entertainment, and professional services, the report said.

“California already has the economic base that other regions and nations are striving to create,” according to the report, which was issued at a briefing for the state’s congressional delegation by the California Institute, a Washington think tank specializing in issues affecting the state.

The report projects growth figures for key sectors of the state economy that are double the expected U.S. rate.

The projection for new jobs in the state, a 19.4% increase in a decade, compares with an expected gain of 10.7% nationally. Regional advances will vary, with expected job gains of 18.9% for the Los Angeles area, 15.2% for the San Francisco region, 24.9% for San Diego and 23.3% for the Sacramento area.

Because of the diversity of its industries, “California can prosper without high defense procurement spending,” the report said. “California’s economy has absorbed substantial cuts in defense-related manufacturing and has reemerged as a manufacturing leader,” it noted.

The good news is clouded by the state’s lack of preparation to handle the influx of people and the surge of business activity, the report warned.

“A large backlog remains in school construction, road maintenance and expansion and the other infrastructure needs of a growing economy and population,” it said.

In a preview of future worries, the problems of the 1970s and 1980s “are reemerging in the hot [Silicon] Valley economy,” the report said, with concerns surfacing again over “traffic congestion, rapidly rising rents and housing prices, and the pressures of rapid growth on the environment.”

Changes are coming without a blueprint, the report warned, noting that the state “does not have a long-term public investment strategy--no list of priorities and no plan for funding.”

With federal aid drying up and with tight state budgets, more tasks and burdens are shifting to local governments. But their ability to cope is constrained, the report said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

California Growth

A look at the expected growth in four key areas of the California economy in the next decade, compared with the growth expected for the nation:

Jobs

1996: 14.6 million

2005: 17.4 million

Percentage change (California): 19.4%

Percentage change (U.S.): 10.7%

*

Income

1996: $808 billion

2005: $1.1 trillion

Percentage change (California): 35.3

Percentage change (U.S.): 23.2

*

Households

1996: 11 million

2005: 13 million

Percentage change (California): 18.4

Percentage change (U.S.): 10.6

*

Population

1996: 32.2 million

2005: 38.2 million

Percentage change (California): 18.5

Percentage change (U.S.): 9.1

Source: Center for Continuing Study of the California Economy