SoCal economy riding high, but housing and other challenges persist; Details to be released at Southern California Economic Summit
Inland Empire, CA – Southern California continues to experience robust economic growth, but technology, shifting demographics and an unrelenting housing shortage are changing the way the region does business, a series of new economic reports shows.
The reports, prepared for the Southern California Association of Governments (SCAG) by top economists, paint a generally positive picture of the region’s economy, with Los Angeles County, Orange County and the Inland Empire all reaching historic levels of business and job growth. Since 2012, the six counties comprising SCAG have seen their gross domestic product grow from $992 billion to $1.26 trillion – larger than the economies of entire nations such as Mexico, Indonesia and Turkey.
The reports will be formally released December 6 as part of the Ninth Annual Southern California Economic Summit at the L.A. Hotel Downtown. The Summit, co-sponsored by SCAG and the Southern California Leadership Council (SCLC), will feature wide-ranging discussions on the region’s future, including its growing role in the innovation economy and the impact of emerging technology in the area of transportation. More than 400 business and elected leaders are expected to attend.
John E. Husing, Ph.D will report on the Inland Empire, he states, “For the Inland Empire, a review of the most recent economic data and the overall trend since the turnaround began in 2011 provides very good news. First and foremost, the level of poverty in the area has declined significantly as employment has soared and unemployment dropped to historic lows. Poverty, which stood at 23.5% for children under 18 in 2016, was down to 19.3%.”
“Southern California is one of the fastest-growing population and economic centers in the world, and the decisions we make now will impact us for generations to come. The Economic Summit is a great opportunity for stakeholders throughout our region to better understand the opportunities and challenges that are in front of us, and set the stage for what we believe is an extremely promising future,” said Alan D. Wapner, SCAG President and Ontario Mayor pro Tem.
Challenges do remain, however – notably high housing costs, the impact of technology and automation on the workplace, a disproportionate number of low-paying jobs and, in several markets, an aging population that is straining the healthcare system and draining the workforce of institutional knowledge.
‘‘Local elected officials and stakeholders will need to strategize on how best to leverage regional strengths while reinforcing weaknesses to better shelter the region from unpredictable events, such as the previous Recession,” said Wallace Walrod, Chief Economist for the Orange County Business Council.
Other economist featured in the reports were Somjita Mitra, Eric Hayes and Tyler Laferriere from the Institute for Applied Economics and the Los Angeles Economic Development Corp.; John Husing, Chief Economist for the Inland Empire Economic Partnership (IEEP); Michael Bracken from Development Management Group Inc.; and Michael Fienup from the Center for Economic Research and Forecasting.
Findings to be presented:
- Higher-paying professional jobs are making their way to the Inland Empire, bolstering an already promising outlook for the two-county region. San Bernardino and Riverside counties have created nearly 350,000 jobs since the economic recovery began in 2011, largely concentrated in the region’s core industries of logistics, health care and construction. One significant shift is the growth in the professional, management and scientific employment sector, buoyed by an increase in workers with college degrees and the higher demand for professional service providers to support the IE’s strengthening economy.
- Orange County accounted for 23.7 percent of the six-county region’s GDP in 2017, thanks in large part to a highly educated population and focused industry clusters that are attracting startups, innovative new businesses and more than $800 million a year in venture capital investments. At the same time, the OC is the least affordable housing market in Southern California, with only 20 percent of households able to afford a median-priced home. Addressing the housing shortage is one of the key economic challenges for Orange County moving forward.
- Emerging industries such as healthcare and advanced transportation have joined entertainment and global trade as key drivers of economic growth and prosperity in Los Angeles County, bringing “unparalleled optimism and opportunity” to one of the most vibrant markets in the world. Employment in LA County growing by 65,000 jobs this year and 234,000 over the next five years. This will create a tightening in the labor market that should force wages up, particularly in those occupations requiring higher levels of educational attainment.
- Significant investment in renewable energy development and the continued influence of agriculture and global trade have helped stabilize Imperial County’s economy, which has exceeded $6 billion in gross domestic product for the first time in history. Agriculture will continue to be the county’s biggest economic driver, with more than 539,000 acres (842 square miles) still being actively farmed. In the meantime, Imperial County has about $6.5 billion in renewable energy projects currently under development, and could see another $20 billion or more in the next 10-15 years.
- The housing crisis and an inability to attract and retain talent continue to thwart growth in Ventura County, which has seen a decline in economic output for two years straight. Ventura County’s Gross Domestic Product fell by 0.4 percent in 2017, following a 0.9 percent drop in 2016. And while jobs overall are growing, key employment sectors all come with caveats. “Whether you look to jobs or GDP, the state of the Ventura County economy is weak,” the report stated. “We hesitate to use the word recession, but we don’t know what else to call two consecutive years of economic contraction.”
SCAG’s Ninth Annual Southern California Economic Summit
9:30 a.m. – 2:00 p.m.
Thursday, December 6, 2018
The L.A. Hotel Downtown
333 S. Figueroa St., Los Angeles 90071
About SCAG
SCAG is the nation’s largest metropolitan planning organization, representing six counties, 191 cities and nearly 19 million residents. SCAG undertakes a variety of planning and policy initiatives to plan for a livable and sustainable Southern California now and in the future. For more information about SCAG’s regional efforts, please visit www.scag.ca.gov.
