Business
Q3-2023 SCAG Economic Roundtable Update
Southern California Association of Governments Release Third Quarter Economic Update
Third Quarter, 2023
SCAG’s Economic Roundtable met for its quarterly discussion on the current state of the regional economy last week. Labor market conditions were a major focus of the conversation and several overarching themes emerged:
- Although a recession had been considered likely for the third quarter this year, the Roundtable was generally optimistic that a recession will be averted or will be mild, especially in California.
- The region’s economic resiliency is driven by strong labor markets. However, the region is facing a number of labor disputes in regionally significant industries.
- Commercial real estate is a weak spot in the region’s economy and housing continues to be soft, largely due to high interest rates and low supply.
- Federal spending through the Inflation Reduction Act is ramping up and presents significant opportunities and multiplier effects for the region, especially surrounding green technology. Lithium mining is an emerging opportunity in Imperial County with commercial grade production possible by 2025.
Labor Market
- The SCAG region’s unemployment rate is at pre-pandemic levels at 4.5 percent (4.8 percent seasonally adjusted). All six counties are experiencing low unemployment rates. The lowest is in Orange County at 3.2 percent (3.6 percent seasonally adjusted). While Imperial County has the highest rate at 16 percent (17.6 percent seasonally adjusted), this is far lower than historical levels in Imperial County. Continuing unemployment claims dropped in the last quarter, indicating that laid-off workers are finding alternative jobs quickly.
- The region’s labor supply is at 9.2 million, about 3.8 percent below the pre-pandemic high of February 2020. In the Inland Empire counties, labor supply slightly exceeds the February 2020 pre-pandemic levels. The Inland Empire counties also lead the state in employment gains since the pandemic; however, total employment is slightly below the post-COVID highs set in Fall 2022.
- There have been labor disputes in regionally significant sectors, including logistics, entertainment and hospitality. Disputes are largely driven by concerns over working conditions, wage levels not keeping up with inflation or corporate profits – and in the case of the entertainment industry, artificial intelligence (AI).
- The tight labor market is a cause of many current economic anomalies; it is expected to take some time for the effects of inflation and interest rate hikes to work itself through various parts of the economy.
Real Estate Market
- Sales of existing homes are still down significantly due to prices and rates both being higher for those looking to “step up;” however, sales are ’starting to increase. Despite supply constraints, new development is still rising in much of the region — and homebuilders’ stock prices are especially strong in reflecting optimism.
- Commercial real estate is the worst performing large sector, driven down by marquee loan defaults in large metropolitan areas and generally high office vacancy rates. However, banks don’t want to take properties back and have an incentive to work things out with building owners to prevent accelerating vacancies or defaults.
Broader Economy
- As of July, economic news as a whole is better than it has been all calendar year. Stock market indices are up and consumer sentiment from the University of Michigan’s index is the highest in two years.
- While many Economists predicted a third quarter recession, nothing suggests it is actually starting or about to come soon. Confidence is helpful in avoiding the self-fulfilling prophecy, which can trigger a downturn. In retrospect, the uniformity of COVID-era support payments in allowing for spending despite uncertainty may have been a major factor.
- Major risks may be on the horizon in commercial lending. Nationally, corporate bankruptcies are at the highest levels since 2010, up 68 percent relative to the first six months of 2022. This is impacting some sectors more quickly, particularly the region’s large hospitality sector. The reason appears to be that businesses are paying far higher rates for new commercial loans, which may lead to some difficult choices for small businesses—and lenders.
- Taxable sales are down as consumers continue to shift consumption from goods to services. While personal spending is positive nationwide, this may be a challenge for local government coffers.
- The region’s year-over-year core inflation rate is 1.3 percent lower than a quarter ago; however, this is largely the result of a 15 percent drop in energy (mainly gasoline) prices. This drop opens the possibility of only one (rather than two) remaining interest hike from the Federal Reserve in the rest of 2023, which would be a positive signal.
SCAG’s Economic Roundtable is a consortium of regional economic experts that meet quarterly to update the region’s economic outlook and discuss challenges and opportunities facing the six counties that comprise SCAG.
Members are:
- Imperial County, Michael Bracken, Development Management Group, Inc. (DMG)
- Los Angeles County, Shannon Sedgwick, Los Angeles County Economic Development Corporation (LAEDC)
- Orange County, Wallace Walrod, Tech Coast Consulting Group (TCCG) and Orange County Business Council (OCBC)
- Riverside & San Bernardino Counties, Manfred Keil, Inland Empire Economic Partnership (IEEP) and Claremont McKenna College
- Ventura County and the SCAG Region, Mark Schniepp, California Economic Forecast (CEF)
- Equity, Karthick Ramakrishnan, University of California, Riverside (UCR) and California 100
- Sustainability, David Roland-Holst, Berkeley Economic Advising & Research (BEAR) and University of California, Berkeley
- Workforce Development, Shaun Fernando, Guidehouse Consulting
Business
Inland Empire Celebrates Entrepreneurial Excellence at Spirit Awards Gala
Honoring Visionary Leaders Driving Innovation and Community Impact
The Spirit of the Entrepreneur Awards Gala, held at the Riverside Convention Center, celebrated the brightest entrepreneurial talent across the Inland Empire. Among the evening’s finalists was Edward Ornelas, Jr., President & CEO of the Inland Empire Regional Chamber of Commerce, who was honored in the Social Entrepreneur category for his outstanding leadership and commitment to the region.
Although Ornelas did not win, the Social Entrepreneur award went to Cesar Navarrete, President & CEO of Children’s Fund, a proud Chamber member. “Being a finalist alongside such remarkable leaders is an incredible honor,” said Ornelas. “I am especially thrilled to see Cesar, a Chamber member, recognized for the transformative work he’s doing to improve the lives of children in our community. It’s a proud moment for us all.”
Another highlight of the evening was the recognition of Hilda Kennedy, President & Founder of AMPAC Business Capital, another Chamber member, who was awarded the Top Female Entrepreneur category. Hilda’s leadership at AMPAC, a mission-driven business lender, has been instrumental in empowering small businesses and fostering economic growth across the region.
“It’s amazing to see leaders like Hilda and Cesar being celebrated for their contributions,” added Ornelas. “Their achievements underscore the talent and dedication of entrepreneurs in our Chamber and across the Inland Empire. They are setting the standard for excellence and impact in their fields.”
The evening also featured the prestigious “Best of the Best” Award, sponsored by Best Best & Krieger LLP, which was awarded to Mauro Gomez, Chief Growth Officer of Anita’s Mexican Foods Corp.. Based in San Bernardino, Anita’s Mexican Foods has grown from modest beginnings into a leader in the food production industry under Gomez’s strategic direction.
The Spirit of the Entrepreneur Awards Gala continues to shine a spotlight on the transformative work of Inland Empire entrepreneurs, celebrating their innovation, resilience, and commitment to the community.
For more information about the Spirit of the Entrepreneur Awards, visit https://www.spiritawardsie.com.
For more details about the Inland Empire Regional Chamber of Commerce and its members, visit www.iechamber.org.
Business
Inland Empire Chamber President Edward Ornelas, Jr. Named Finalist for Spirit of the Entrepreneur Awards
Celebrating Leadership and Innovation: Ornelas Recognized for Advancing Business Growth and Social Impact in the Inland Empire.
Edward Ornelas Jr., President of the Inland Empire Regional Chamber of Commerce and owner of the Inland Empire Business Journal, has been named a finalist in the famed 2024 Spirit of the Entrepreneur Awards. Ornelas is honored in the Social Entrepreneur category for his remarkable leadership and vision in fostering business growth and development across the Inland Empire. The award ceremony will take place on November 21, 2024, at the Riverside Convention Center, celebrating the best of entrepreneurship throughout the region.
The Spirit of the Entrepreneur Awards, often regarded as the “Oscars of Business” in the Inland Empire, recognizes the innovation, leadership, and impact of outstanding entrepreneurs across various sectors. Ornelas joins a select group of 34 finalists, each representing the entrepreneurial spirit and resilience that define the I.E. business community. The Social Entrepreneur category highlights individuals like Ornelas, whose work goes beyond profit to positively impact society.
In his role as President of the Inland Empire Regional Chamber of Commerce, Ornelas has been a powerful advocate for the business community, connecting small businesses with essential resources and creating opportunities for growth. As the owner of the IE Business Journal, the only publication in the region dedicated solely to business news, Ornelas has provided a platform for local businesses to thrive by sharing their stories and promoting their success. His innovative, forward-thinking approach to marketing has earned him a reputation as a “visionary” and a “get-things-done” leader across both public and private sectors.
“I’m deeply honored to be recognized as a finalist for the 2024 Spirit of the Entrepreneur Awards. This nomination is a reflection of the incredible businesses and community leaders across the Inland Empire who inspire me every day. At the Inland Empire Regional Chamber of Commerce, our mission is to empower businesses and foster economic growth, and this recognition highlights the collective efforts of our entire community. I’m excited for what the future holds as we continue to work together to make a lasting impact,” said Ornelas.
Other notable finalists for the 2024 Spirit of the Entrepreneur Awards include leaders in healthcare innovation, green technology, and digital transformation. Each finalist, selected by a distinguished panel of judges, represents the best in their respective industries and contributes to the Inland Empire’s continued growth as a hub of innovation and entrepreneurship.
The Spirit of the Entrepreneur Awards is an annual event that brings together business leaders, community advocates, and entrepreneurs to celebrate the entrepreneurial excellence that drives the region’s economy. This year’s event promises to be a night of inspiration and recognition, showcasing the achievements of finalists like Ornelas, who continue to elevate the Inland Empire’s business landscape.
For more information about the Spirit of the Entrepreneur Awards and to see the full list of finalists, visit www.spiritawardsie.com.
Business
CBRE Opens Newly Renovated, Tech-Enabled Office in the Inland Empire
The office is designed to support hybrid work and employee wellbeing
CBRE announced the opening of its new 10,159-sq.-ft. office suite on the ground floor of 4141 Inland Empire Blvd., in Ontario, Calif.
The office is part of CBRE’s Workplace360 program, which features innovative office designs and functionality, including in-office technology and a wider variety of collaborative spaces designed to support hybrid working. CBRE launched its Workplace360 program over a decade ago in its downtown LA office. Since then, the company has opened more than 100 Workplace360 offices worldwide, continually updating the program as work habits have changed over the years, especially with the increase in hybrid work.
“Our newly renovated space provides us with a great opportunity to deliver a collaborative, experience-driven workplace that supports hybrid work,” said Ian Britton, managing director and market leader for CBRE in Inland Empire. “Our Workplace360 office will also serve as a showpiece to help clients conceptualize flexible work strategies for their employees.”
The renovated office has several different work areas including focus, huddle, living, and conference rooms. The open-space lobby, known as the “Heart,” features a variety of seating and a communal space for collaboration. A large 86” media display with a speaker system welcomes employees, visitors, and clients and assists with onsite events.
New office technology, including touch-enabled video conference rooms, allows for hybrid work collaboration between in-office and remote employees and clients. Additionally, the Mt. Baldy conference room has Liquid Galaxy, a geospatial visualization platform set across large format curved screens providing a cinematic presentation experience. This room has an operable wall that opens to the Heart, creating an onsite event space.
A cornerstone of the Workplace360 model is its free-address approach, in which there is no dedicated seating. The free-address approach allows employees who are in the office on a given day to use any workstation or office.
The office’s design led by CBRE Design Collective, took inspiration from the Inland Empire’s orange groves and mountainous landscapes of Mt. Baldy. Images of Route 66 from local photographer VC Torneden features the role the highway plays in the area.
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