By Kenneth Harwood
Economist, Solvang Chamber of Commerce
Solvang’s economy should continue to grow in 2019, with real spending by residents and visitors paralleling that of the United States.
Real spending is the current or nominal rate of spending less the rate of inflation. The rate of growth in real spending by consumers in 2019 is expected to be higher than in 2017 or 2018.
Favorable effects of lower prices for gasoline, and slowly rising interest rates, should help to balance possible negative effects of barriers to international trade, and a slowing world economy.
We enter 2019 with strong economic confidence among consumers in the U.S., and spending by consumers accounts for nearly 70 percent of economic activity in this country.
Estimates of consumer spending are by The Conference Board, a nonprofit membership and economic research organization, as of November 2018. Often the forecasts by The Conference Board are closer to actuality than forecasts by the U. S. Federal Reserve Board.
California Association of Realtors expects the number of single-family homes resold in the state to fall 3.3 percent in 2019, while median price is to rise 3.1 percent to $593,450.
Visitors to Solvang and the Santa Ynez Valley are expected to pay 3 percent more for hotel rooms in 2019 than in 2018. CBRE Hotels also forecasts occupancy rate to be 73.8 percent in 2019, up from 72.0 percent in 2018.
Economic activity in the wine industry of the U. S. should continue to improve in 2019, bolstered by strong economic confidence of consumers. Premium red blends are popular among wine club members who receive direct shipments from wineries. The most usual price for such a bottle in October 2018 was $175, according to Wines and Vines metrics.
Please see The Conference Board’s website for the economic forecast, and for a metric of consumer confidence. See the website of California Association of Realtors for the housing market outlook. Go to the website of Visit Santa Barbara for the 2019 travel outlook. Wine industry analytics are on the website of Wines and Vines.
Kenneth Harwood is the economist for the Solvang Chamber of Commerce.
