The University of the Pacific's latest Business Forecast shows California to continue growing at a modest rate of 2 to 3 percent for jobs and economic output. The forecast predicts the drought will have only a minimal impact on the economy.
The California unemployment rate has dropped to 7.4 percent, and the Business Forecasting Center at University of the Pacific predicts it will drop below 7 percent next year.
UOP School of Business Director Jeff Michael says the drought is having an impact on employment in the Central Valley, but it's only slight.
"Unemployment rates continue to decline in the Valley and that's just because the general economic recovery is gaining strength."
Michael says 250,000 new construction jobs will be created statewide over the next four years, and the building industry will see 60,000 housing starts next year.
"It still won't be where it was in 2003 or 2004, it be two-thirds of that or even half of in some areas."
Michael says Central Valley cities such as Stockton, Fresno, and Modesto could see unemployment rates drop to single digits by 2016.
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