IE Business Daily Business news for the Inland Empire.
That’s the verdict of local economist John Husing, and a Los Angeles economics firm is almost as optimistic. Both agreed the region is getting close to where it was before the recession.
Let’s hope the local economists are right about the immediate future of the Inland Empire economy.
If they are, the region is rapidly coming out of the Great Recession and may reach total recovery soon, perhaps sometime next year.
First it was John Husing, the Inland Empire’s best-known economist. On April 17, Husing delivered his annual assessment of the Inland Empire economy during the Inland Empire Economic Partnership’s 2014 State of the Region conference.
Husing has been overwhelmingly negative during his last two or three presentations. At the beginning of his remarks this year, he quipped that he and his wife no longer get invited to social functions, mostly because he’s become so pessimistic about the local economy no one wants to hear him talk.
But the event at the Doubletree Hotel in Ontario marked the return of the old Husing: animated, extolling the virtues of the Inland region’s seemingly endless supply of affordable land, and armed with charts and graphs that promised almost nothing but good economic news for the future.
“I’m not going to be gloomy today, because there’s no reason to be,” said Husing, who predicted a full economic recovery for the Inland Empire next year. “This year is going to be a good follow-up to last year. We’re looking at two or three good years, and I don’t see anything changing that.”
Husing was so upbeat about the local economy that anyone listening to him might have wished they could buy stock in the region. He predicted that 40,100 jobs will be created in the region this year (see chart), roughly the same number of jobs that went online here last year.
That would put the region within about 35,000 jobs of where it was in the spring of 2006, when 1.3 million residents were employed. That was its highest employment rate ever, according to the state Employment Development Department.
By comparison, at the height of the recession five years ago, Riverside and San Bernardino counties lost about 60,000 jobs. Few of those jobs were recovered during the next couple of years, according to the development department.
By the end of this year, the Inland region’s unemployment rate will have shrunk to 8.5 percent, down from 9.4 percent in March 2013, Husing predicted.
Logistics will add about 8,000 jobs this year, mostly because there are so many e-commerce centers being built in the region, while construction is expected to add roughly 16,000 jobs, Husing said.
Traffic at the ports of Los Angeles and Long Beach was up to near record levels in 2013, meaning a lot of goods are being shipped to warehouse-distribution centers in the Inland Empire. That’s particularly good news, because about 10 percent of the region’s workforce is employed in the logistics industry, Husing noted.
“Even though unemployment is still high [9.4 percent], we’re finally getting back to something that resembles a normal job market,” Husing said. “We’re about 95 percent back to where we were before the recession.”
While Husing was addressing 350 dignitaries from the public and private sector, a Los Angeles economics firm released its 2014 forecast for the Inland Empire, and its numbers were every bit as optimistic as Husing’s.
Beacon Economics predicted that unemployment in Riverside and San Bernardino counties will be 9.1 percent at the end of this year, but from there it will drop substantially: to 8.2 percent by the end of 2015 and 7.3 percent by the end of 2016.
Single-family home sales, the backbone of the Inland economy, are also expected to perform well: essentially flat this year compared with 2013, but up 9.2 percent next year and 7 percent in 2016.
Median home prices are also expected to grow, up 14.7 percent this year followed by a 7.7 percent hike next year and a 5.1 percent increase in 2016, according to Beacon, an independent research and consulting firm with clients in the public and private sector.
Beacon also had some good news for the Inland retail sector.
Taxable sales in the region were $15.7 billion last year and are up 40.1 percent since the worst of the recession. They’re expected to pass $20 billion in 2018, according to Beacon’s forecast.
“I think we’re all pretty optimistic about the Inland Empire,” said Jordan Levine, Beacon’s director of economic research. “The big issue is jobs. We’re still well below where we were before the recession hit, but [employment] is still heading in the right direction.”
The most encouraging aspect of the Inland region’s economic recovery is that it’s broad-based, Levine said.
“Jobs are up, consumer spending is up and the housing market is headed in the right direction,” said Levine, who predicted approximately 6.5 percent job growth in both counties during the next two to three years. We aren’t relying on any one thing for the recovery, and that’s good.”
The Inland housing market is also “heading back to normal,” particularly on the price side, Levine said.
“The housing market is doing well again, and prices are getting back to where they should be,” Levine said. “The median price for a home in the Inland Empire is heading back to about $250,000, which is more realistic for this market.”
Levine stopped short of using the term “full recovery,” but said he doesn’t see anything stopping the economic improvement at this point.
“That term means different things to different people.” Levine said. “But I don’t see anything bubbling under the surface that causes me to have any trepidation. The political situation is more stable, and no one is talking about shutting down the government.”
The Inland Empire economy, like the economy in general, goes up or down with the job market, said Steve Johnson, director of Metrostudy’s Southern California office.
“We’re getting some strength in the foundation of the economy,” Johnson said of the Inland region. “Construction jobs are up, warehouse-distribution jobs are up and retail is starting to make a comeback. Some national chains are starting to look at the Inland Empire. The economy should keep expanding.”
INLAND EMPIRE
EMPLOYMENT FORECAST
BY SECTOR AND GROUP 2014
| SECTOR |
2014 |
2014/FORECAST |
% CHANGE |
| Management/Professional |
53,708 |
2,500 |
4.9% |
| Higher Education |
17,475 |
500 |
2.9% |
| Local Government |
73,550 |
400 |
0.5% |
| Federal/State Government |
37,233 |
0 |
0.0% |
| Other |
6,583 |
(200) |
-2.9% |
| Healthcare |
120,883 |
3,200 |
2.7% |
| Administrative Support |
62,425 |
3,000 |
5.0% |
| Education/Local |
116,225 |
1,500 |
1.3% |
| Financial |
42,858 |
900 |
2.1% |
| Distribution/Transportation |
132,142 |
8,000 |
6.4% |
| Construction |
77,325 |
8,000 |
11.5% |
| Manufacturing |
87,108 |
300 |
0.3% |
| Hotel/Amusement/Restaurant |
142,200 |
6,000 |
4.4% |
| Retail Trade |
169,317 |
4,500 |
2.7% |
| Employment Agency |
39,508 |
1,500 |
3.9% |
| Other Services |
41,750 |
1,000 |
2.5% |
| Agriculture |
14,608 |
0 |
0.0% |
| Social Assistance |
46,258 |
(1,000) |
3.2% |
|
TOTAL |
1,281,108 |
4,100 |
3.2% |
SOURCE: California Employment Development Dept./ Economic & Politics Inc.
(Columns may not add up due to rounding.)
