With the 11-year bull market slain, unemployment rising to historic highs and sharp forecasted declines in GDP, the economy is on a rocky path, prompting half of Orange County employers to cut their staff, according to Cal State Fullerton economists Anil Puri and Mira Farka of the Woods Center for Economic Analysis and Forecasting.
The news was part of the Orange County Business Expectations Survey, a quarterly poll of local business leaders assessing the strength of the local economy, released last week.
Optimism is at its lowest point since the Great Recession, with a reading of 22.7 for the current quarter, down more than 75% from 92.9 in the first quarter of 2020. Any reading below 50 anticipates a contraction, while a reading above that level signifies an expansion.
The all-time low for the index is 15.2, set in January 2009 during the Great Recession.
“It has been very sudden and very sharp because the coronavirus took us all by surprise, including the business executives,” Puri told the Orange County Business Journal on April 2, upon releasing the survey results. “We expect a very sharp downturn in the county’s economy, based on what the business executives have said.”
Only 3.8% of firms surveyed anticipated increasing their labor force in the near-term, while half expected to cut jobs.
Possible Rebound Later in the Year
Puri and the other Cal State Fullerton economists anticipate a rebound in growth during the second half of 2020, though any expansion will depend on a number of factors, including control of coronavirus, whether the U.S. and other Western nations will be able and willing to reopen, and how quickly they will do so, and whether and how much consumers will be willing to spend.
For More on the Woods Center
The Woods Center provides a midyear and annual economic forecast report, covering the Orange County, California, U.S. and global economies, as well as periodic interim updates, reports and forecasts.