The two-county region has slipped into a recession, from which it is unlikely to recover for at least two years, according to a prominent local economist.

"I've been studying the Inland economy for 44 years and this is the worst economy I've ever seen here," Husing said after speaking to more than 800 people April 8 at the Ontario Convention Center. "The good news is that this recession won't last long."

Husing was the keynote speaker and led a 90-minute panel discussion on the local outlook during the 10th annual Inland Empire Economic Briefing, staged by The Business Press.

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Economist John Husing of Economics & Politics Inc. says the Inland Empire has fallen into recession.

For the past 10 years Husing has been an unabashed optimist regarding the local economy, calling the region's supply of affordable housing and industrial land a recipe for perpetual expansion.

But Husing struck a gloomy tone during his address to business leaders and public officials, saying the local economy slipped when its housing market declined and that its recovery is tied to the recovery of the U.S. economy.

"We are in a recession, no question about it," Husing said. "When it comes to housing -here versus the coast - we're still a bargain, even with all of the problems we're having. Prices are still lower here.

"But the subprime mess and the global credit crisis have to be fixed if our local economy is going to improve. And we're going to need help from the federal government to make that happen."

The two-county region lost 14,000 jobs in the last year, a contrast to 2004, when Riverside and San Bernardino counties added 61,000 jobs, according to the state Employment Development Department.

During 2008 the Inland Empire is expected to lose nearly 18,000 jobs, Husing told his audience.

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Photo S By Michael J. Elderman

More than 800 people attended the 10th Annual Economic Briefing at the Ontario Convention Center on April 8.

Husing blamed the local economic slowdown on the housing market slide, and said the Inland housing market slipped because too many speculative buyers - people who bought homes as an investment and not as a place to live - ntered the Inland market and artificially inflated single-family home prices.

"The speculators drove up the prices to crazy levels, and that shut down the whole housing market," Husing said. "Housing is one of our biggest manufacturing sectors. Now, with the subprime mess, the financial institutions can't loan anyone money. Those are the two things we have to fix."

The slowdown at the ports of Los Angeles and Long Beach is hurting the region as well, Husing said.

"Whether you like it or not, the Inland Empire is a port community," he said. "People aren't importing as much because the value of the dollar has dropped and retailers here are predicting recession, and that is hurting us."

Steve Johnson, director of Metrostudy, a Riverside-based real estate consulting firm, agreed that 2009 will be a down year and that the two-county region won't start to rebuild until 2010.

The region's financial success depends on its housing market, he said.

"We've gone from 60,000 housing starts in a year to 29,000 housing starts," Johnson told the audience.

"Our housing industry has gone to its knees, and it's going to take us a while to put that machine back together again," he said.