Site icon

2019 Inland Empire Economic Forecast

Inland Empire Economic Index Q4-2018

10th Annual Inland Empire Economic Forecast Conference:

Housing Remains Greatest Immediate and Longer Term Challenge; Despite Some Trade War Impacts and Yield Curve Consternation, Neither Will Lead To A Downturn in 2020.

Riverside, Ca — Operating at ‘full employment’ and with an unemployment rate that is trending lower than its record low, the Inland Empire’s economy will continue to grow through 2020, although at a slower pace than in the recent past, according to a new economic forecast released today by the UC Riverside School of Business Center for Economic Forecasting and Development at the 10th annual Inland Empire Economic Forecast Conference.

Driving much of the region’s ongoing jobs growth are the local health care and logistics sectors, while significant growth at the Ontario International Airport is showcasing the Inland Empire’s increasingly strong economic presence among Southern California’s powerhouse economies.

“The IE economy has been gaining momentum in recent years and although there has been a slowdown, based on everything we see happening today, all the handwringing over a coming recession is just that – nothing on the foreseeable horizon would have a big enough or rapid enough impact to knock the region, or the nation, into a downturn,” said Christopher Thornberg, Director of the UC Riverside School of Business Center for Economic Forecasting and one of the forecast authors. “Although there is always the potential for some yet unseen impact on the global or national level, and there are certainly long term threats that stem from California’s statewide housing shortage, which is helping to drive labor shortages, slower growth is expected to continue.”

The new forecast calls out a lack of housing supply and weak rates of homebuilding, particularly within the single-family market, as the most urgent challenge to economic growth in the Inland Empire. Even though local housing stock falls seriously short of demand, residential building permits in the region (both single-family and multifamily) declined by 8.2% in the first half of 2019 compared to the same period one year ago.

This is not unique in Southern California where Los Angeles saw residential permits fall by a much higher 27.9% and San Diego experienced a whopping 46.6% decline. Indeed, construction has pulled back statewide with residential permits down 17.4% across California compared to last year. The Inland Empire’s multifamily building activity has been stronger and that is likely what has moderated the region’s relatively lower level of decline in residential permits.

“The consequence of high demand and low supply is, of course, upward pressure on home prices and rental costs,” said Thornberg. “Both have increased substantially in the Inland Empire over the past year as the number of home sales has declined. This is a problem today and unless we add housing stock, is going to be even more of a problem tomorrow.”

The new forecast delivers current outlooks for the U.S., California and Inland Empire economies.

Select Key Findings:

The 10th annual Inland Empire Economic Forecast Conference is being held on November 6th at the Riverside Convention Center in Riverside, CA. In addition to forecasts for the nation, state, and region, the event includes a drilled down discussion with renowned housing policy experts Dr. Paavo Monkkonen and Steve PonTell about California’s intensifying home affordability crisis and possible policy prescriptions to address the state’s lack of home building.

Exit mobile version