Business
A Recession That Is Technically Over And A Full Recovery That Is Dependent On Containing COVID-19; New Economic Forecast Is Both Upbeat And Cautionary
California Labor Market Recovering But Rate Of Job Growth Has Slowed; Hardest Hit Sectors In The Inland Empire Expected To Face Surging Demand Once Virus is Controlled
October 13th, 2020 — The United States economy can and is bouncing back rapidly from the severe and unprecedented pandemic-driven downturn that began early this year, according to a new economic forecast released today at the 11th annual Inland Empire Economic Forecast Conference. Despite the alarming and record-breaking decline in economic output that occurred in the 2nd quarter, and the ongoing painful effects of the COVID-19 epidemic itself, the economy remains fundamentally strong, and in many ways is already rebounding.
“The United States hit its low point in the current downturn back in April, and since that time the nation’s economy has been moving back towards more normal levels of economic output,” said Christopher Thornberg, Director of the UC Riverside School of Business Center for Economic Forecasting and one of the report authors. “As odd as it may sound, technically, this recession is over, making it the deepest, but shortest in U.S. history.”
Thornberg emphasizes that this does not mean harsh recessionary effects are not still being felt, especially among some industries and individuals, but that everything from the unemployment rate to the rate of job recovery to consumer spending indicate that the economy is growing. Moreover, as spending has been curtailed for the past seven months, the ‘fuel’ that has built up in the form of increased wealth and savings is waiting to set off a vigorous expansion once the virus is controlled.
Despite the ostensible contradiction of a deep, short recession, the new forecast argues that as dramatically bad as the 2nd quarter numbers were, the pandemic-driven shocks to the economy were largely transitory and not based on any fundamental financial or economic imbalance. Today, the share of the U.S. labor force that is truly unemployed (meaning workers who have permanently lost their jobs or are actively looking for new work) stands at just under 5%, significantly lower than the 8% plus rate seen at the peak of the Great Recession. Workers who consider themselves temporarily laid off make up about 3% of the current U.S. unemployed workforce.
The new forecast includes outlooks for the U.S., California, and Inland Empire economies. Across geographies, the forecasts are relatively rosy but come with a key caveat: Full recovery and resumption of economic activity/output is firmly dependent on containing the spread of the COVID-19 virus.
Select Key Findings:
- The underlying strength of the U.S. economy at the start of the pandemic has been excessively (yes, excessively) reinforced by the Federal government’s $3 trillion stimulus plan. Lost economic activity in the first half of 2020 stands at approximately $600 billion, 20% of the size of the stimulus package.
- Total personal income in the United State has actually increased during the course of the pandemic as spending has fallen. That has caused consumer savings to shoot up to almost $1.2 trillion, four times what it was in the 4th quarter of 2019.
- The California labor market continues to recover from the effects of the pandemic although the rate of job growth has slowed in the months since June’s strong bounce when 558,200 positions were added back into the economy. The slowing rate is due in large part to the reimplementation of business closures and restraints as a result of the virus resurging.
- As health-mandated restrictions in the state continue, cities in California that rely heavily on tourism/visitors and the transient occupancy tax, will experience real hardship due to revenue losses.
- As of this writing, the cities in California with the largest job losses are Santa Cruz (-14.7%), San Luis Obispo (-13.3%), Salinas (-12.4%), and Oakland-Hayward-Berkeley (12.2%). Three out of four of these locations are home to major universities and, as instruction has moved online, they have felt a distinct impact from the lack of student spending at local and surrounding businesses.
- The Inland Empire’s labor market continues to steadily recover from the pandemic, adding 74,700 jobs since April’s lows. Still, on an annual basis, year-over-year employment has fallen by 132,900 jobs. The region is outpacing the state in terms of job recovery but trailing the nation.
- Not surprisingly, the sectors experiencing the largest job losses in the Inland Empire are Leisure and Hospitality, Retail Trade, Other Services (includes hair and nail salons), Manufacturing, and Government. Once the virus is controlled, however, these sectors are expected to ramp up production to meet surging consumer demand.
The 11th annual Inland Empire Economic Forecast Conference was held virtually on October 13th. A copy of the forecast book can be downloaded in its entirety here.
Business
Inland Empire Regional Chamber of Commerce to Lead California Delegation at GITEX GLOBAL 2023 in Dubai
Fostering Technological Synergy: Bridging the Tech Gap with Global Partners
Demonstrating the Inland Empire Regional Chamber of Commerce’s (IERCC) commitment to global tech collaboration and innovation, the organization will lead a California delegation to the world-renowned GITEX GLOBAL event in Dubai from October 16-20, 2023. Though the original invitation extended to IERCC’s President & CEO, Mr. Edward Ornelas, Jr., he will not be in attendance. Instead, the California delegation will be spearheaded by the Chamber’s newly-appointed CTO, Mr. Gabriel Rangel.
Organized by the Dubai World Trade Centre, GITEX GLOBAL 2023 promises to be grander than ever. The event is set to host over 6,000 exhibiting companies and startups, drawing more than 170,000 tech and business executives from over 170 countries. The mega-event will sprawl across 41 vast halls and, for the first time ever, will be held at two prominent venues – the iconic Dubai World Trade Centre and the new Dubai Harbour for Expand North Star, making it the host for the world’s largest startup event.
Mr. Edward Ornelas, Jr. commented, “While I regret not attending GITEX personally, I am proud to have Mr. Rangel at the helm of this effort. I’m confident that our delegation will foster new collaborations and present the Golden State as a tech powerhouse.”
This year’s conference adopts the compelling theme of “The Year to Imagine AI in Everything”. Attendees are poised to witness the grandest showcase of AI tech giants and industry frontrunners. Additionally, it promises to kindle profound dialogues and debates concerning the socio-economic implications of burgeoning AI technology.
“Leading the California delegation at GITEX offers us an unmatched platform to nurture and solidify relationships with global tech partners,” said Mr. Gabriel Rangel, CTO of IERCC. “As the technology landscape continues to evolve, it’s critical for us to be a part of these international collaborations. I’m honored to spearhead this mission on behalf of the Inland Empire Regional Chamber of Commerce.”
An integral part of the California delegation, Mr. Ram Thanapandian, Principal Technology Consultant to the State of California and Chair of CA State Treasurer Fiona Ma’s Technical Advisory Commission, will be present, providing invaluable insights and representing the State of California Treasurer’s Office.
IERCC’s leadership in organizing this delegation underscores the crucial role that California plays in the global tech ecosystem and mirrors Dubai’s ambitious vision as encapsulated in the Dubai Economic Agenda (D33). This strategy aims to substantially expand Dubai’s economic landscape in the upcoming decade, securing its stature among the world’s leading global cities.
Trixie LohMirmand, Executive Vice President of the Dubai World Trade Centre and CEO of KAOUN International, remarked on the invaluable contributions the California delegation will bring to the event. She looks forward to an event marked by knowledge-sharing, collaboration, and pioneering discussions.
For additional information on GITEX GLOBAL 2023, please refer to: GITEX 2023 Preview.
Coming October 5th
Economic Horizon 2024: What Lies Ahead?
The Inland Empire Regional Chamber of Commerce, in collaboration with Beacon Economics and the County of San Bernardino, is thrilled to announce that the anticipated economic forecast conference, Economic Horizon 2024: What Lies Ahead, Inland Empire? will be held October 5th from 3:30 PM to 6:30 PM at the El Prado Golf Courses in the vibrant city of Chino, California.
Esteemed economist, Dr. Christopher Thornberg will present complete outlooks for the U.S., California, and Inland Empire economies. “The Inland Empire stands at the crossroads of remarkable economic opportunities and challenges,” said Thornberg. “I’m excited to unpack the trends and shifts that will define the region’s economic landscape in the next year, and beyond.”
Known for his razor-sharp observations, and fun, energized delivery, Thornberg’s presentation will include pointed discussions about inflation, the Fed’s next move, housing markets, strengths and instabilities in the economy, and what current trends mean for the nation, state, and local region.
The conference will also be graced by the insights of California State Treasurer Fiona Ma as keynote speaker. In her words, “The strength of California’s economy is deeply interwoven with the growth trajectories of its regions. The Inland Empire, with its dynamism and resilience, is a testament to this synergy. I am honored to join ‘Economic Horizon 2024’ and share a vision where policies, partnerships, and potentials converge to elevate the Inland Empire to unprecedented economic heights.”
“This conference is a testament to the collaborative spirit of the Inland Empire and our commitment to fostering a robust, resilient economy,” said Edward Ornelas, Jr., President of the Inland Empire Regional Chamber of Commerce. “Our partnership with Beacon Economics and the County of San Bernardino aims to offer a platform for profound economic discussion, forecasting, and strategic future planning.”
Attendees can anticipate not only expert insights into the economy but also networking opportunities and a chance to connect with key business, government, and nonprofit leaders from across the region.
Full event details are available at: economy.iechamber.org
Bizz Buzz
Webb Investments acquires Silver Creek Industries, an industry leader in modular construction for schools
Webb Investments today announced the launch of a new company, Silver Creek Modular, after acquiring the assets of Silver Creek Industries, a highly respected modular construction company known for bringing innovative, sustainable and cost-effective solutions to the education industry.
Silver Creek Industries’ existing business, including its employees and its Perris, Calif., manufacturing facility, will remain with the new company, with Webb providing the investment capital, resources and expertise to enhance Silver Creek’s presence in the modular construction marketplace.
The acquisition closed in June of 2023, following Silver Creek Industries’ Chapter 11 filing in the Central Bankruptcy Court of California.
“We are thrilled to have the opportunity to bring Silver Creek into our family business, and look forward to building on our shared commitment to improving educational opportunities within communities across our region,” said Kiana Webb, CEO of Webb Family Enterprises. “This acquisition aligns with our strategy to invest in established firms that can help us drive community revitalization and inclusive growth, while improving quality of life and increasing economic output.”
Silver Creek Industries was founded in 2004 and has completed more than 1,000 projects in the education, commercial, medical, military, government and multi-family housing markets. More recently, the company’s focus has been on providing high-quality, sustainable modular buildings for schools and educational institutions. Silver Creek Industries is well known for delivering projects on time and on budget, with minimal disruption to school and the community.
Webb Investments is a privately held, family-owned company focusing on creating a community development ecosystem that drives inclusive, organic growth and transforms the areas they serve.
For more information on Webb Investments, please visit webbinvestments.com.
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