Solvang Looks at 2016

Nov 23, 2015

Solvang Looks at 2016 

Solvang Looks at 2016
Kenneth Harwood
Economist
Solvang Chamber of Commerce
Solvang’s economy should continue to grow in 2016.
Real spending by residents and visitors should parallel that of the United States once again. Real spending is current or nominal spending less the current rate of inflation. Here are expected changes in rates of real spending by all consumers in the country.
Year Change in real spending
2014 +2.7%
2015 +3.2%
2016 +2.7%
The rate of growth real spending next year is expected to be less than the rate this year, and the same as last year’s rate. Rate of growth is actual for last year and estimated for this year and next year.
Favorable effects of lower gasoline prices, historically low interest rates, and business conditions abroad appear to be slightly less prominent next year.
Spending by consumers accounts for nearly seventy percent of reported economic activity in the U. S.
Estimates of consumer spending are by the Conference Board as of November, 2015. The Conference Board is a nonprofit membership and economic research organization. Often the forecasts by The Conference Board are nearer to actuality than forecasts by the Federal Reserve Board of the U. S. government.
Number of single family homes resold in California is to rise 6.3 percent next year, after rising the same at the same rate this year, as estimated by California Association of Realtors. Median price is expected to rise 3.2 percent, after rising 6.5 percent this year and 9.8 percent  last year.
Visitors’ spending in California is to grow 5.5 percent next year, having grown 2.7 percent this year. Visit California, the state travel and tourism commission, provided the estimates. Spending by domestic visitors is forecasted to rise 4.9 percent next year, while spending by international visitors rises 7.7 percent. Visitor spending is to continue to rise faster than national consumer spending. International visitors tend to stay longer and spend more than domestic visitors.
Economic activity in the wine industry of the U. S. should continue to improve in 2016, given present trends. Economic data are from Wines and Vines magazine. Off-premise sales rose 6 percent in the twelve months ending with October of this year, while direct to consumer sales rose 10 percent, and the winery job index rose 20 percent. These rates of growth were greater than the estimated rate of growth of consumer spending in the United States.
Please see The Conference Board’s economic forecast on the Board’s Website. See the Website of California Association of Realtors for the housing market outlook. See the Website of California Tourism Industry, research page, reports and presentations, for the tourism outlook of October, 2015. Wine industry metrics are on the Website of Wines and Vines.

Posted in Dr. Ken Hardwood, Featured Articles.