As North Bay recovers, panelists say innovation will drive it forward

ROHNERT PARK -- In his annual economic forecast at the Sonoma State University Economic Outlook Conference, Dr. Robert Eyler, director of the university’s Center for Regional Economic Analysis, said that the six North Bay counties of Marin, Sonoma, Napa, Solano, Mendocino and Lake could expect “broad growth” across various sectors through 2014.

However, continuing legislative debate about taxation and regulation has caused uncertainty to persist in the business community, tempering long-term plans and making predictions difficult beyond 2015.

[caption id="attachment_69819" align="alignleft" width="250"] Rob Eyler[/caption]

In his annual report, Dr. Eyler presented six economic indicators that, as a combined index, illustrated the likely economic direction of the six North Bay counties. While none has recovered from the recessionary decline of 2008, all experienced a regional upward trend that was represented most strongly for Sonoma and Lake counties.

"While the U.S. economy has flattened out, the local economy is speeding up," he said.

Current conditions represent recovery to prerecession employment, not including the housing boom and what Dr. Eyler called a continued "hole in construction."

Business investment has recovered to over 80 percent of what it was in 2005 after plunging in 2009, but has decoupled from stronger recovery in consumption, government spending and exports, he said. Further economic and legislative clarity is required to drive that uptick, he said.

Some of that uncertainty is born from issues beyond the United States, including government debt in Europe. Middle East political issues could drive the price of a gallon of gas beyond $5 by August of this year, he said.

The volume of cash at lenders has skyrocketed during three distinct periods since July 2008, which Dr. Eyler attributed to multiple rounds of quantitative easing by the Federal Reserve and its enduring effort to keep interest rates at record lows.

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