In 2008, Orange County was one of the epicenters for job loss. The market was saturated in mortgage companies, and the industry was hit hard by the financial crisis. This time around, the market is more diversified and has gained stability. As a result, the market is not expected to see substantial job loss as it did in the last downturn.
"The Orange County economy has significantly diversified since the Financial Crisis, which has put it on more stable ground," Jared Dienstag, research manager at JLL, tells GlobeSt.com. "It is not expected that Orange County will once again be at the epicenter of an economic downturn thanks to the strong diversification of the local economy."
To date, Orange County has seen the most significant layoffs in the restaurant, retail and hospitality sectors, according to research from JLL; however, job losses from other sectors accounted for half of unemployment in the region. The region's robust tourist market certainly exposes Orange County to the current crisis, but not on the same scale that mortgage companies did in 2008. "Without a doubt Orange County has a progressive retail market and one of the largest tourist sectors' in the United States. Locally, the closure of amusement parks does not just impact employees at the parks, but also businesses that feed off park visitors," says Dienstag. "Fortunately, it is not a matter of if the amusement parks will reopen, but when they will reopen."
Nearly half of all current layoffs are considered temporary, which will also help the market to recover. And, unemployment claims have started to wan. "Up to this point, the number of layoffs peaked in mid-April, so as we get a better handle on COVID-19 which should enable more businesses to reopen at greater capacity, then more people can get back to work," says Dienstag.
While the market is better equipped for this recession, job loss and the fears of another financial crisis are at the top of mind. Dienstag, however, says that there are significant differences between the two market dislocations. "Even though it has been over ten years since the Financial Crisis, it is still very much in the minds of Orange County businesses and residents because Orange County was among one of the hardest hit markets," says Dienstag. "The Great Recession was brought on because of the collapse of the subprime mortgage industry and Orange County was home to one of the largest concentrations of these companies. That recession, unlike the current economic downturn, immediately caused permanent job losses and companies to quickly go out of business."
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Kelsi Maree Borland
