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Gains Continue for Business Activity in the Inland Empire; Construction Jobs, Building Activity on the Rise

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The latest Inland Empire Business Activity Index released by the UCR School of Business Center for Economic Forecasting and Development 
shows business activity in the region continuing its upward climb with the local construction industry making key contributions.
November 15, 2018— RIVERSIDE, Calif. (www.ucr.edu) — Business activity in the Inland Empire advanced solidly in the third quarter of 2018 and is expected to continue its expansion at a relatively swift pace for the rest of the year despite ongoing trade disputes with China, according to the newly released Inland Empire Business Activity Index. The Index, which draws on employment and other data, indicates that the region’s business activity expanded at a 3.2% annualized rate in the third quarter of 2018, slightly behind the growth rate of U.S. GDP, which increased by 3.5%.
 
Looking over the past year, however (third quarter 2017 through third quarter 2018), the Inland Empire has outperformed the nation, with business activity growing by 3.2% in the region compared to 3.0% growth for U.S. GDP. 
 
“We hear a lot about the impressive job growth in the Inland Empire, but the UCR Business Activity Index offers a more comprehensive view of overall business activity,” said Robert Kleinhenz, executive director of research at the Center for Economic Forecasting and one of the Index authors“The steady increases we have seen in the Index tell us that the region is benefitting from broad-based growth across several industries and not exclusively from growth in the large local logistics sector.”
 
Although still trending below peak levels, construction employment in the Inland Empire has advanced nicely so far in 2018 (+6.2% year-to-date). This job growth is also evidenced by construction activity in the region: the total value of building permits increased 20.5% through the first three quarters of 2018.
 
The current Inland Empire Business Activity Index is now available. The Index tracks the performance of the Inland Empire regional economy on a quarterly basis and is adjusted for seasonal variations. The composite indicator is estimated using a wide range of economic data including employment, economic output, income, real estate, and other indicators at the national, state, and metropolitan level. The Index is produced entirely by the UC Riverside School of Business Center for Economic Forecasting and Development.
 
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The UC Riverside School of Business Center for Economic Forecasting and Development is the first major university forecasting center in Inland Southern California. The Center is dedicated to economic forecasting and policy research focused on the region, state, and nation. Learn more at UCREconomicForecast.org

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

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Career & Workplace

California Workforce Expands in Latest Numbers but Labor Supply will Continue Constraining Job Growth

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March Job Gains Revised Upwards In Latest Numbers

California’s labor market continued to expand at a steady pace in April, with total nonfarm employment in the state growing by 41,400 positions over the month, according to an analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development. March’s gains were also revised up to 74,400 in the latest numbers, a 14,200 increase from the preliminary estimate of 60,200.

While California added jobs at a healthy pace throughout 2021 and has done the same so far in 2022, as of April, the state has recovered just 91.3% of the jobs that were lost in March and April of 2020, the onset of the pandemic. There are now 239,900 fewer people employed in California compared to February 2020. Total nonfarm employment in the state has contracted 1.4% since that time compared to a 0.8% drop nationally. With a larger portion of its workforce still to be recovered, California increased payrolls by 5.6% from April 2021 to April 2022, well above the 4.6% increase nationally over the same period.

California’s unemployment rate fell to 4.6% in April, a 0.2 percentage-point decline from the previous month. The decline was driven by an increase in household employment (+150,000). Still, the state’s unemployment rate remains elevated relative to the 3.6% rate in the nation overall. While growing by 111,800 in April, California is continuing to struggle with its labor supply. Since February 2020, the state’s labor force has decreased by 299,600 workers, a 1.5% decline.

“Labor supply remains the biggest constraint to job growth in the state,” said Taner Osman, Research Manager at Beacon Economics and the Center for Economic Forecasting. “And as employers seek to ramp up employment during the seasonally strong summer months, worker scarcity will continue to place upward pressure on wages in the state.”

Industry Profile  

  • At the industry level, the largest jobs gains continue to occur in the sectors hardest hit by the pandemic. While a handful of sectors in California are now exceeding their pre-pandemic peaks, employment levels in the hardest hit sectors remain below their pre-pandemic levels and should continue to steadily gain back jobs over the coming months.
  • Leisure and Hospitality led payrolls gains in April, expanding by 20,100. Payrolls in Leisure and Hospitality still have a long way to go to recover all of the jobs lost due to the pandemic however, with payrolls still down 8.7% compared to February 2020.
  • Other sectors posting strong gains during the month were Professional, Scientific, and Technical Services (7,300), Government (4,600), Retail Trade (4,500), Transportation, Warehousing, and Utilities (4,200), Administrative Support (3,100), Manufacturing (2,600), and Information (1,800).
  • While job gains were broad-based in April, the Construction (-13,200) sector posted significant losses during the month. Health Care (-500), Other Services (-100), and Mining and Logging (-100) also shed positions, but the losses were minor.

Regional Profile

  • Regionally, job gains were led by Southern California. Los Angeles (MD) saw the largest increase, where payrolls grew by 9,600 (0.2%) during the month. The Inland Empire (8,000 or 0.5%), San Diego (4,500 or 0.3%), and Orange County (4,300 or 0.3%) also saw their payrolls jump during the month. The Inland Empire (122.6%) has experienced the strongest recovery in the region, measured by the percentage of jobs recovered from April 2020 to April 2022 relative to the jobs lost from February 2020 to April 2020. The IE is followed by El Centro (108.5%), San Diego (94.4%), Orange County (83.9%), Los Angeles (MD) (83.5%), and Ventura (75.0%).
  • In the Bay Area, San Francisco (MD) experienced the largest increase, with payrolls expanding by 4,900 (0.4%) positions in April. San Jose (4,300 or 0.4%), the East Bay (2,100 or 0.2%), Santa Rosa (500 or 0.2%), and Vallejo (300 or 0.2%) also saw payrolls expand during the month. Since April 2020, San Jose (85.8%) has experienced the strongest recovery in the region, followed by the East Bay (82.3%), Santa Rosa (77.3%), San Francisco (MD) (77.1%), Napa (76.7%), Vallejo (68.3%), and San Rafael (MD) (58.7%).
  • In the Central Valley, Sacramento experienced the largest monthly increase as payrolls expanded by 4,700 (0.4%) positions in April. Payrolls in Bakersfield (1,400 or 0.5%), Fresno (1,000 or 0.3%), Visalia (600 or 0.4%), Modesto (400 or 0.2%), Chico (300 or 0.4%), and Redding (200 or 0.3%) increased steadily as well. Since April 2020, Visalia (126.4%) has experienced the strongest recovery in the region, followed by Stockton (124.3%), Yuba (122%), Madera (116%), Sacramento (109.6%), Redding (108.9%), Merced (105.1%), and Fresno (104.0%).
  • On California’s Central Coast, Santa Barbara added the largest number of jobs, with payrolls increasing by 100 (0.1%) during the month. San Luis Obispo (-1,400 or 1.2%), Santa Cruz (300 or 0.3%), and Salinas (300 or 0.2%) saw payrolls decline. Since April 2020, San Luis Obispo (89.3%) has experienced the strongest recovery in the region, followed by Santa Barbara (86.9%), Santa Cruz (81.9%), and Salinas (78.7%).
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Career & Workplace

City of San Bernardino Names Nathan Freeman as Director of Community and Economic Development

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The City of San Bernardino Announces Nathan Freeman as its new Director of Community and Economic Development. His starting date is May 16.

An experienced professional with almost 25 years working in economic development in the Inland Empire, Freeman comes to San Bernardino after spending the past sixteen years with the City of Riverside, where he served as the Economic Development, Redevelopment, and Real Property Services Manager.

“Nathan Freeman has extensive experience successfully negotiating major development agreements while at the same time creating opportunities for small businesses and startups,” said City Manager Robert Field. “He has played a critical role in the recent and upcoming development in downtown Riverside and is a great addition to the San Bernardino team.”

In the role of Director of Community and Economic Development, Freeman will oversee the functions, programs, and activities of the Planning Division, Building Division, Code Enforcement, Economic Development, and Housing.

“I am looking forward to the opportunity to work alongside an amazing team in San Bernardino, under the leadership of the City Council and City Manager, who are dedicated to building a stronger and more economically resilient community,” said Freeman. “I’m truly excited about the City’s long-term potential and am grateful for the opportunity to lead the Community & Economic Development Department as we encourage job creation, business development, and a better quality of life for all residents.”

In Riverside, Freeman played a key role in major development projects, including the revitalization of downtown. He negotiated approximately $1 billion in private investment throughout Riverside, including the development of over 250,000 square feet of Class A office/commercial space, worked to attract many new businesses to the city, and facilitated the development of the Riverside Food Lab, the Inland Empire’s first urban food court.

Previously, Freeman served as Business Development Officer for the City of Hesperia and Economic Development Project Manager for the County of Riverside.

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Career & Workplace

California Labor Market Adds Jobs at a Healthy Pace in Latest Numbers as State Continues its Climb Back from Pandemic Losses

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Unemployment Falls Again But Remains Elevated Relative To Nation

 California’s labor market continued to expand at a steady pace in March, with total nonfarm employment in the state growing by 60,200 positions over the month, according to an analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development. February’s gains were revised down to 135,400 in the latest numbers, a 2,700 decrease from the preliminary estimate of 138,100.

While California has added jobs at a healthy pace in 2021 and 2022, as of March 2022, the state has recovered just 89.3% of the jobs that were lost in March and April 2020, and there are now 395,500 fewer people employed in California compared to pre-pandemic February 2020. Total nonfarm employment in the state has contracted 1.7% since this time, compared to a 1.0% decline nationally. With a larger portion of its workforce to be recovered, California increased payrolls by 6.4% from March 2021 to March 2022, well above the 4.5% increase nationally during the same period.

“The strong job gains relative to the nation will continue, since California has more ground to recover compared to the rest of the country,” said Taner Osman, Research Manager at Beacon Economics and the Center for Economic Forecasting. “While macro headwinds, most notably rising interest rates and inflation, gather momentum, it’s not expected to slow employment growth in the coming months as the re-opening tailwinds remain strong.”

California’s unemployment rate fell to 4.9% in March, a 0.4 percentage-point decline from the previous month, which was driven by an increase in household employment (+141,100). California’s unemployment rate remains elevated relative to the 3.6% rate in the United States overall. While growing by 63,100 in March, the state continues to struggle with its labor supply. Since February 2020, the state’s labor force has fallen by 405,100 workers, a 2.1% decline.

Industry Profile  

  • At the industry level, the largest jobs gains continue to occur in sectors hit hardest by the pandemic. While California has gained significant ground in recent months, employment levels in many of these sectors remain below their pre-pandemic levels and should continue to steadily add jobs back over the coming months.
  • Leisure and Hospitality led job gains in March, with payrolls expanding by 14,800. Leisure and Hospitality still has a long way to go to recover all of the jobs lost due to the pandemic as payrolls are still down 9.9% since February 2020.
  • Other sectors posting strong gains during the month were Construction (8,900), Professional, Scientific, and Technical Services (8,700), Health Care (7,000), Other Services (4,900), Wholesale Trade (3,300), Manufacturing (2,900), Education (2,000), Retail Trade (1,900), Finance and Insurance (1,800), and Real Estate (1,800).
  • Job gains were broad based in March with no sector posting losses during the month. The Transportation, Warehousing, and Utilities sector lagged other sectors increasing payrolls by just 100 positions during the month. However, the sector has been a driver of growth in the state during the recovery, with payrolls up 14.6% since February 2020.

Regional Profile

  • Regionally, job gains were led by Southern California. Los Angeles (MD) experienced the largest increase, where payrolls grew by 5,700 (0.1%) during the month. San Diego (5,600 or 0.4%), Orange County (5,000 or 0.3%), the Inland Empire (4,900 or 0.3%), and Ventura (2,000 or 0.7%) also saw their payrolls jump during the month. The Inland Empire (118.6%) has experienced the strongest recovery in the region, measured by the percentage of jobs recovered from April 2020 to March 2022 relative to the jobs lost from February 2020 to April 2020. The Inland Empire is followed by El Centro (105.1%), San Diego (93.1%), Los Angeles (MD) (82.3%), Orange County (80.8%), and Ventura (76.7%).
  • In the Bay Area, San Francisco (MD) experienced the largest increase, with payrolls expanding by 4,800 (0.4%) positions in March. San Jose (3,900 or 0.3%), the East Bay (3,300 or 0.3%), Santa Rosa (400 or 0.2%), and Vallejo (300 or 0.2%) also saw payrolls expand during the month. Since April 2020, San Jose (82.4%) has experienced the strongest recovery in the region, followed by the East Bay (81.1%), Napa (77.2%), Santa Rosa (76.5%), San Francisco (MD) (73.8%), Vallejo (67.9%), and San Rafael (MD) (62.6%).
  • In the Central Valley, Sacramento experienced the largest monthly increase, as payrolls expanded by 6,300 (0.6%) positions in March. Payrolls in Fresno (2,000 or 0.5%), Bakersfield (1,400 or 0.5%), Stockton (800 or 0.3%), Merced (500 or 0.7%), Chico (400 or 0.5%), Modesto (400 or 0.2%), Redding (400 or 0.6%), and Visalia (400 or 0.3%) increased steadily as well. Since April 2020, Stockton (126.7%) has experienced the strongest recovery in the region, followed by Yuba (124%), Visalia (122.1%), Madera (114%), Merced (110.2%), Redding (107.6%), Sacramento (106.4%), and Fresno (103.0%).
  • On California’s Central Coast, Santa Barbara added the largest number of jobs, with payrolls increasing by 1,000 (0.5%) during the month. Salinas (600 or 0.4%), Santa Cruz (600 or 0.6%), and San Luis Obispo (400 or 0.3%) also saw payrolls expand during the month. Since April 2020, and San Luis Obispo (91.8%) has experienced the strongest recovery in the region, followed by Santa Barbara (86.0%), Santa Cruz (82.3%), and Salinas (81.5%).
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