Employers To Boost Hiring In '11; Banks Tighten Lending
LOS ANGELES (CBS) — Business owners are more bullish on the economy than lenders, with nearly 80 percent of business owners predicting opportunities for growth in the coming year, according to a study released Tuesday.
The Private Capital Markets Study from Pepperdine University's Graziadio School of Business and Management says by contrast, less than 5 percent banks and 3 percent of venture capital funds plan to loosen their lending standards over the next 12 months.
"It's hard to say if private business owners are too optimistic or lenders are too pessimistic, but my sense is it is a combination of both," lead researcher and associate professor of finance John Paglia said.
Of 388 business owners surveyed, 79 percent predicted opportunities for growth, while 52 percent of the venture capitalists surveyed and 17 percent of the banks said they expected to tighten credit, according to the study.
KNX 1070's Ron Kilgore reports
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"Some of the optimism among private businesses may stem from the Obama administration's efforts to establish a $30 billion fund to help spur small business lending," Paglia said. "However if lenders and investors continue to keep their hands tightly clasped around their cash, businesses will have a hard time expanding."
Separately, a study by USC's Lusk Center for Real Estate found that the industrial market should see modest growth in the coming year, while the office market remains depressed.
"The industrial sector is showing stronger signs of recovery across the board," said Tracey Seslen, co-author of the Casden Forecast. "The strong Chinese and Indian economies, combined with the weakened U.S. dollar, have increased demand for U.S. manufactured goods and greatly increased port traffic."
High unemployment is keeping office markets depressed, said report co-author Richard Green.
"Clouding the office forecast is a shift in the traditional workplace.
Today, cubicles are the norm and concepts such as telecommuting, hoteling and office-sharing are becoming more common and having an increasing impact on demand for office space," he said.
Overall, the report, which looks at economic data through the third quarter of 2010, shows a modest recovery in Southern California over the last year.
Office vacancies, however, are expected to increase and rents decrease in the near term, with some stabilization expected in 2012, according to the authors.
Industrial rents are forecast to increase 10.5 percent over the next two ìyears, and the Inland Empire could benefit as companies seek cheaper space, according to the annual Casden Real Estate Economics Forecast.
In Orange County, rents are expected to decline more than 12.9 percent for Class A buildings and 10.3 percent for Class B in 2011.
In spite of the area's overall improvement, the office vacancy rate hovered at 20.7 percent, and renters will continue to negotiate favorable rates.
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