OROVILLE -- Two economists who spoke during the 13th annual Economic Forecast Conference see brighter spots, but nothing rosy when it comes to the economy.

Examining the north valley, California economist Robert Eyler of Sonoma State University said economic progress is made when indicators like jobs, housing and personal income move forward.

And according to Eyler, that's happening to a small extent. However, in making his projections for the north state, Eyler couldn't avoid the word "slow," applying it to housing sales growth and housing prices. He suggested a slight rise in the mortgage interest rate might not be bad.

"People on the fence could be pushed (into buying)," said Eyler, who suggested that any rate hike would be "low."

"I don't see any major surge in housing prices" in California's interior. Coastal communities report differently.

Until bank-owned and short-sale properties are cleared out of communities, housing won't show much bounce back.

Eyler told more than 400 at the 13th annual Economic Forecast Conference that economic development programs can make a difference.

"The north valley will be facing slow growth, but that can be changed with economic development."

Economic development programs can set the north valley apart from the rest of California and can change numbers, he said, and grab attention.

Even with California's malaise, Eyler sees changes in payroll employment, but says contractual work isn't showing up in state figures, and represents a number of jobs.

In looking forward, Eyler said jobs and industries currently targeted won't be the ones to shine in the future, other than high-tech.

What the pending state and federal tax hikes do to future incomes and spending is a question.

Kevin Klowden, managing economist for the California think tank Milken Institute, said the U.S. should be excited at the strides that Mexico has made.

"It means more jobs in Mexico, so there's less pressure for families to come to the U.S. to find work," he said.

"They think job prospects are better, so they stay home," Klowden said of the illegal immigrants who cross the border.

That opens up potential for California workers, although the jobs are not high-wage ones.

Even so, California has not lost the glow, either continentally or internationally, he said.

"There's a growing respect for California among other countries. Even when Apple slows down, California stocks are the most respected" and overseeing market in buying shares of California companies is strong.

Even with California's economic stumbles, its economy is growing faster than the nation's.

Nevertheless, California's job growth remains "weak" after a mammoth whacking by the recession.

That's pinned on what's happened to the state's biggest job producers — small- and medium-size businesses.

"California is mostly small- and medium-size companies, and job growth occurs in them, not the large companies," he said.

Even when those smaller companies were ready for growth, the capital sources they usually turned to are still reluctant.

Many switched their focus to their home's equity, which put them into worse straits as difficulties arose. Klowden said California's home prices won't rise dramatically because of the continuing inventory of bank-owned and short-sale homes.

Once those cycle out, some price growth could occur.

Nationally, Klowden sees the continuing sparring between parties in Washington over cuts versus spending.

"What we need is cuts," he said, identifying defense and entitlements like Social Security and Medicare.

Nevertheless, he sees about 2 percent growth in the U.S. economy.

As far as job creation, Klowden mentioned the Wal-Mart job offers to hire more than 100,000 returning veterans. He doesn't expect any rebound in government jobs, but buying more domestically could help.

Struggling overseas countries carry reverberations to the U.S. and California, but there are good overtures. A growing middle class in China means a demand for goods in California like high-value ag crops and wine.

"That will prompt California and the Central Valley."

Where all corners of California can benefit is growth in high-tech talent, he said. 

Companies will continue to look outside of California and outside the U.S., especially for science and engineering talent, unless the state makes a huge turnaround in encouraging those areas.

"We don't generate enough bachelor's degrees so we'll continue to import from other states and countries."

Kish Rajan, director of the Governor's Office of Business and Economic Development, talked about the pro-business support Gov. Jerry Brown has exhibited that will help the state.

Reach Laura Urseny at 896-7756, lurseny@chicoer.com, or on Twitter @LauraUrseny.