NAPA COUNTY, CA — Napa County’s economy is unlikely to return to its pre-pandemic growth rate in the next two years as the county grapples with global economic instability and the lingering effects of the COVID-19 pandemic, a Sonoma State University economist said Tuesday.
The economic environment in Napa County is unlikely to match pre-pandemic levels until after the 2024 election at the earliest, according to Sonoma State economics professor Robert Eyler, who presented an economic outlook to the county’s Board of Supervisors.
Ongoing global and domestic economic issues like inflation are unlikely to fully go away before 2024, Eyler said, while travel and tourism to the county have rebounded somewhat but continue to lag behind pre-pandemic levels.
Business travel to Napa County in particular is not projected to reach and exceed pre-pandemic levels until 2025 at the earliest, while leisure travel may recover as soon as this year.
“The business side is what’s killing California in terms of getting back to pre-pandemic levels of visitors,” Eyler said. “We just have not had the business demand to come to California.”
Eyler suggested that the coming two years ahead of the 2024 presential election will be marked with sociopolitical strife like continued inflation and fights over debt and spending among federal legislators that is likely to hamper the U.S. economy for “probably at least the next 18 months.”
The county’s wine industry is also expected to continue its plodding rebound, as the demand for premium and luxury wines is expected to slow as worsening economic conditions and a potential recession continue to loom.
Napa County’s long-term future will likely be determined in part by how San Francisco’s economy shifts long-term, Eyler said, as the fate of the city’s status as a business hub should become clear in the next 12-18 months.
“If you lack business travel and lack commuter travel, there’s going to be more pressure on the industries that serve those two markets,” Eyler said of San Francisco’s cascading economic effects on the region.
“If we don’t see that come back the next couple of years, that can mean some really weird changes in San Francisco,” he added.
One of the county’s most vital industries, leisure and hospitality, has also regained nearly all of its pre-pandemic employment, lagging behind January 2020 levels by just 1.5 percent in December 2022.
Leisure and hospitality employment cratered by some 65 percent of pre-pandemic levels in mid-2020 and has slowly risen since, according to data from the California Employment Development Department.
No other industry in the county lost more than 25 percent of its employees even in the nadir of the pandemic.
“For at least the next five years, the core of Napa County is going to be tourism and wine,” Eyler said. “It’s really developed a global brand and you all need to make sure that the county continues to see that as a thriving set of industries.”
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