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Central Coast Economic Forecast predicts economy will be close to full recovery by second half of 2021

Posted at 4:10 PM, Nov 18, 2020
and last updated 2020-11-18 22:30:27-05

The Central Coast Economic Forecast was hosted virtually this year and most of the discussion revolved around the economic impacts brought on by the pandemic at a state and local level.

Christopher Thornberg, Dr. Taner Osman, and Adam Fowler of Beacon Economics led the discussion.

Thornberg, the founder of Beacon Economics, said near the start of the pandemic marked the deepest and shortest recession in history.

Thornberg labeled the fall and rise of the economy in four levels: Recession, Recovery Stage 1, Recovery Stage 2, and Recovery Stage 3. He said that if there is control gained over slowing the spread of COVID-19, the economy will zoom back to normal by the second half of 2021.

"The economy is already in recovery," Thornberg said. "Worst quarter in economic history followed by the best. We are still a ways away from getting back to complete normality but with good news on the vaccine front, that path is pretty much set in stone."

As for the cost of housing, Thornberg says the lack of housing supply continues to impact the affordability of homes in San Luis Obispo County, which has caused many Californians to move out of state.

Dr. Taner Osman, the Director of Regional Analysis for Beacon Economics, said prior to the pandemic, San Luis Obispo County's economy was doing well and had sustained job growth. However, by April and May of 2020, one in five jobs and then one in six jobs had been lost in the local economy.

There was a bright side in the past few months as transient occupancy taxes in August surpassed 2019 totals. Still, the tourism and service industries have been significantly impacted by COVID-19.

"Hotels and restaurants, there was a 42% contraction with respect to business activity, and fuel and service stations saw about a 44% contraction," Osman said. "This makes a lot of sense. We're driving less, we're working from home, there's less demand for gas. The good news is that if we look at more recent data that was provided to us by credit card companies, we can see in San Luis Obispo, spending activity has picked up."

Both Thornberg and Osman agree that by the second half of 2021, improvements to the economy will likely continue.