Los Angeles County’s economy is by far the largest in Southern California, but the Inland Empire is leading population and employment growth due to falling house prices and growing demand for warehouse workers amid the boom in e-commerce.
These revelations are included in the latest UCLA Anderson forecast released early Wednesday, December 8.
Inland Empire economist John Husing said online shopping was already on the rise before the pandemic, but when COVID-19 hit it exploded.
âWhen all service sectors temporarily closed their doors, there was a huge change in the way people bought goods,â he said. “And he’s been so strong that he’s overwhelmed the supply chain.”
Warehouses, trucking companies and ports in Southern California are scrambling to keep pace with demand and have been further hampered by a widespread labor shortage.
The Inland Empire’s transportation, warehousing and utilities sector has experienced explosive growth, with an astonishing 197% increase over the past decade due to the rapid growth of e-commerce, according to the reports. forecasts.
13th largest economy in the world
Southern California’s gross domestic product – or the total value of its goods and services – reached $ 1.6 trillion in 2021, according to the UCLA report. This makes it the 13th largest economy in the world, lying between Brazil ($ 1.5 trillion) and Australia ($ 1.6 trillion).
LA County’s GDP is currently estimated at $ 815 billion, nearly three times the size of Orange County, which landed in second place with $ 272 billion. San Diego County ranked third with $ 256 billion, followed by the Inland Empire ($ 211 billion) and Ventura County ($ 56 billion).
Southern California’s economy has grown faster than the nation’s over the past two decades, according to the report. The Inland Empire saw the region’s highest GDP growth at 52%, while Orange County ranked last at 31%.
The Inland Empire has also recovered the most jobs since the start of the COVID-19 pandemic. Employment in the two-county area was down only 2% from February 2020, compared to the United States (down 2.8%), Orange County (down 5% ), Ventura County (down 5.6%), San Diego County (down 5.9%) and LA County (down 7.4%).
Southern California’s largest employer in 2021 is healthcare and social assistance, followed by recreation and hospitality, retail, education, and professional and business management . But in terms of challenges, the logistics network that supports the movement of e-commerce goods is stretched to the limit.
âOur vacancy rate for warehouses in the Inland Empire is 0.7%,â said Husing. âWe’re running out of space to put them here. Now the market is starting to look up into the high desert – areas like Victorville and Antelope Valley. “
Husing said some Orange County office buildings are being demolished to allow for the construction of small warehouses so companies like Amazon can ship goods to consumers faster.
âThe safeguard of the supply chain will stabilize when consumer demand slows down,â he said. âWe are currently in an inflationary cycle and higher prices will make people spend less. I expect the logistical backup to smooth out in mid-2022. “
According to Anderson’s forecast, Southern California will see employment growth of 3.9% in 2022 and 1.7% in 2023. The region’s overall economy is expected to grow 4.2% in 2022 and 2.2% in 2023.
California as a whole
On a larger scale, California’s economy will experience continued growth, but slightly slower, according to forecasts. Although some healthcare restrictions have been lifted, heavy job losses remain in three sectors: leisure and hospitality, education and other services, including retail where employees must work closely with their colleagues.
Housing is another challenge, as the state’s median home price has increased 33.6% over the past two years to a record $ 800,000, according to the California Association of Realtors.
“Soaring house prices and lack of affordability are often cited as the reasons for net in-migration out of California,” the report says.
The state is ready for job growth of 4.7% in 2022 and 2.5% in 2023, according to the report, while Calfornia’s unemployment rate is expected to reach an annual average of 5.6% in 2022 and 4.4% in 2023.