Business leaders and academics packed the historic Fox Theater in downtown Riverside for the ninth annual Inland Empire Economic Forecasts on October 11 to hear good news on the economy of the ‘Inland Empire: Ten years after the 2008 recession, the region is home to the most job growth in Southern California and is the most improved among the major metropolitan areas surrounding Los Angeles, San Diego and Orange counties.
Following introductory remarks from UC Riverside Chancellor Kim A. Wilcox and UCR School of Business Dean Yunzen Wang, speakers from the School of Business Center for Economic Forecasting and CBRE Properties presented detailed analyzes of developments in the region over the past ten years and directions. they expect change to happen in the future.
During the Great Recession, the Inland Empire lost 150,000 jobs and non-farm employment fell by almost 11.6%.
Since the bottom of the wave, however, the region has gained more than 350,000 jobs and non-farm employment has increased by 31%.
“When an economy falls further during a recession, it typically experiences a stronger relative recovery, but the economic growth of the Inland Empire has accelerated in recent years and is strongly boosted by its clear affordability advantage, which has resulted in significant population gains. ,” noted Christophe Thornberg, director of UC Riverside School of Business Center for Economic Forecasting. “And while there are long-term threats to the economy stemming from labor shortages, federal trade policies and our dramatically increased national debt, growth is expected to continue over the next year. at the local, state and national levels. “
The Inland Empire also stands out for being the most improved economy in Southern California, according to the analysis. Compared to its pre-recession peak, the Inland Empire now has 16.1% more jobs. The increase exceeded rates in Los Angeles, Orange and San Diego counties, which posted gains of 5.6%, 6.6% and 10.6%, respectively. The nation experienced a 7.7 percent increase over the same period.
“The progress made by the Inland Empire economy over the past two years is the latest phase in a wave of growth that has lasted for years and has included widespread job gains in most industries,” higher incomes and increased local spending, rising house prices and, in recent times, an increase in construction activity, ”said Robert kleinhenz, executive director of research at the center. “But growth will moderate in the relatively near future, as a limited supply of workers will hamper the region’s expansion.”
According to Kleinhenz and Thornberg, addressing California’s high housing costs and labor shortages at all skill levels is critical to ensuring healthy economic growth in the Inland Empire and the United States. -of the. Speakers from CBRE Properties, a commercial real estate company, agreed that sustained growth will require additional investment in the construction of new housing and commercial space.
Select the main conclusions:
- Jobs in the Inland Empire call for continued gains, with total non-farm jobs set to grow 2.5% to 3% in the near term, while unemployment rate drops to less than 4% in 2019.
- The renowned Inland Empire logistics industry is the most improved in the region, having nearly doubled in size over the past decade, with an employment rate 90% higher than at its peak. ‘before the recession. However, the effects of current commercial tariffs are not yet visible.
- The region has also seen gains elsewhere, including construction, health care and retailing, in response to continued population growth and business activity in the region.
- In the second quarter of 2018, the median nominal price of an existing single-family home in San Bernardino County was 17.2% lower than its pre-recession peak, while in Riverside County it was lower by 9.7%. If current trends continue, forecasts indicate nominal home prices in the region will surpass their pre-recession peak in 2020.
- The growth of the US economy looks strong for the remainder of the year, but will slow down in 2019. Additionally, while there is no reason to expect a recession anytime soon, the stressors in the long run of large federal borrowing, rising interest rates and political uncertainties, dramatically diminish the nation’s ability to absorb a heavy blow to its economy; it won’t take much to stop the current expansion.
- High housing costs will hamper California’s long-term economic growth to the extent that they deter the state’s workforce from expanding. California’s labor force growth rate has slowed significantly since fall 2017, with year-over-year growth of just 0.2% in July 2018.
The full report can be downloaded here.