Report Shows Sacramento’s Economy Slowing Down

SACRAMENTO -- An economic slowdown could be on the horizon for the Sacramento region, according to a new economic report from Sacramento State.

The report's author, Sacramento State economy professor Sanjay Varshney, said the post-recession recovery could be entering its later stages.

“If the data stays persistent, what I mean by that is if truly the weakness sets in, this might be the first signs of a recession down the road,” Varshney said.

Varshney organizes the bi-annual economic forecast report with a team of 17 economists and researchers.

The most recent midyear report showed one critical industry slowing down in the Central Valley.

“We saw the goods producing sector, the non-service sector, actually go negative,” Varshney said.

Also troubling, Varshney said construction jobs, one of the biggest drivers of the labor market in the region, for the first time in 7 years went negative.

“When the construction sector goes negative for the first time in 7 years, it does get our attention,” the professor said.

Already, he said, Sacramento is at a disadvantage to the rest of the country because the workforce is not very diverse.

While many have promised to grow Sacramento’s technology industry, including a recent effort to bring Amazon’s new headquarters to the area, Varshney said few have delivered. With so many tech firms leaving the Bay Area, Varshney said the region is getting overlooked as many are relocating to Reno.

There is one bright spot, Varshney said health care jobs are growing. He also said the housing market could remain strong during the slowdown.

However, Varshney said it's crucial for the workforce to diversify in order for the economy to remain strong.

“I think we really, truly need get our act together and start doing a lot more to try and come more competitive," he said. "Where as right now I think we’re talking about it but it hasn’t really translated into a marketing plan.”