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For more information, contact:
Sarah Lubeck
(619) 234-8484
sl@sandiegobusiness.org
Inside EDC
- 1:00 - 2:15pm: Panel event for the launch of EDC's economic impact report on San Diego's genomics industry. Details here.*
- 5:00 - 7:00pm: San Diego Innovation Council Reception. Register here.
Understanding our economy begins with strong data. Lucky for us, Feb/March means lots of it.
A little about the research products released this week:
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Quarterly Economic Snapshot: February
Every quarter, San Diego Regional EDC analyzes key economic indicators that are important to understanding the region's standing relative to the 25 most populous metropolitan areas in the U.S. The Economic Snapshot covers data from October to December 2016 (Q4), the most recent quarter available, in regard to employment, real estate and venture capital.
Release time: Data from the previous quarter is available at the end of the second month of the current quarter (e.g. data from Q4 2016 is released late Feb. 2017; data from Q12017 will be released late May 2017)
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San Diego's Economic Pulse: March
Monthly, the California Employment Development Department releases countywide employment and unemployment data. However, we know unemployment is only a small sliver of understanding our economy. EDC supplements this report by adding information on who's hiring, business establisments and job postings.
Release time: The California Employment Development Department typically releases the previous months data on the third Friday of every month (e.g. Data from April 2017 will be release on May 19, 2017). However, the first few months of the year are on a revised schedule, as January is subjected to seasonal changes as some service sectors wind down from the holidays and other data is being adjusted from the previous year. Therefore, January's data was released on March 3, 2017.
Connections: a simple word that takes on different meanings, but for EDC, it describes both what we do and how we do it. In 2016, we were all about connecting... Connecting companies to global markets. Connecting business to opportunities. And connecting with the people who make our economic development work possible.
- 8,260 jobs impacted; 126 year-to-date projects
- $3.4M in tax credits earned by local companies
- 14 national media hits secured; 149M people reached
- 15 SMEs accrued $6M in additional export sales; 42 new regional jobs
- $1.6M DoD grant awarded to San Diego and local organizations
- 9K students impacted by career development programming
- Seven economic research reports released
- And 160 investors and partners who make it all possible...
See the stories behind the numbers in our interactive review at EDCin2016.com.
"As we head into the new year, we know that we have even more to accomplish in connecting San Diego's economy to the world. As always, EDC is honored to do it with and through all of you." - Mark Cafferty, president & CEO
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It’s clear that despite a healthy economy, not every part of San Diego is enjoying economic prosperity. This week, GlobeSt.com sat down with Jim Zortman, sector VP, strategic operations of Northrop Grumman and newly appointed chairman of EDC, for a chat about what he hopes to do about this issue and others.
What are your goals in your new role as chairman of the San Diego Regional EDC?
As chairman, I am committed to championing these initiatives, but it’s clear that despite a healthy economy, not every part of San Diego is enjoying economic prosperity. I hope to broaden our agenda to focus on economic development issues in communities that have not yet benefited from the region’s development. It is my vision that the broad-based coalition of partners that catalyzed the region’s life-sciences, technology, R&D, defense and aerospace sectors can also come together to develop job opportunities and prosperity for more San Diegans.
What do you feel are the biggest economic development challenges in the San Diego market?
Zortman: We have all heard the comment that businesses should operate “anywhere but California.” We know it is not cheap to do business here. But it is our job as economic developers to understand and leverage our assets and competitive advantages—just as your readers often have to do as real estate professionals. California is number one in economic categories like foreign investment, venture capital and job growth; we rank first in sectors like agriculture, defense, biotechnology and life sciences; our public universities are nationally ranked and produce top-tier talent—the list goes on and on. San Diego plays an important role in each of these fields.
San Diego is home to the largest concentration of military anywhere in the world. It is the underpinning of defense sectors where we have unmatched dominance: cybersecurity, defense, communications, unmanned systems and maritime. San Diego is the epicenter of the future of biotechnology—specifically genomics. We are home to Craig Venter, who was the first person to sequence the human genome, and to Illumina, the company that can now sequence the genome in just over 24 hours for under $1,000. San Diego has more than 80 research institutions, more than any other region in the country.
Not only are we home to a diversity of thriving industries, but we are also a top-tier talent pool driving our region’s growth. Specifically, San Diego gained 72,000 degree holders in 2014 alone, more than any other major metro area in the country. Also, San Diego has the lowest turnover rate in tech and scientific R&D jobs, which is attracting the attention of technology companies across the country.
Continually, we have what talent wants: the lowest average commute time of any major metro area in the country; an influx of creative-office space as seen with iboss Cybersecurity’s space in UTC; competitive wages—ranking second average annual pay for R&D employees—and more.
And if that’s not enough, let me point out that the economy of Texas could pretty much double overnight and still not match the strength of California’s economy. In the end, dispelling myths about doing business here and telling San Diego’s story is our collective responsibility.
What do you feel are the biggest economic-development opportunities that are perhaps not being taken advantage of in the San Diego market?
Zortman: One of the biggest opportunities we have as a region is to help companies export their products and services. In 2013, San Diego ranked 18th of the 100 largest metro areas in total export value, export-supported jobs, GDP and population size. But the region was only 61st in terms of export intensity—total export value as a share of the region’s GDP. According to the Institute for International Economics, companies that export not only grow faster, but are less likely to go out of business than non-exporting companies.
World Trade Center San Diego – now housed within EDC – has introduced the MetroConnect Program to provide small- and medium-sized enterprises with resources and funding to help open new markets abroad. The Go Global Initiative and programs like MetroConnect help San Diego maximize its global competitiveness.
What else should our readers know about San Diego Regional EDC?
Zortman: The real estate industry is a key partner to EDC. Every day our team works with brokers and developers to help enable and encourage companies to grow here. Using data on the region’s industry clusters, workforce talent and network of partners, EDC is able to assist companies with expansions throughout the mega region. Some of San Diego’s recent wins include the attraction of tech companies such as Bizness Apps and Wrike.
Real estate professionals should also use the research EDC produces to better understand industry sectors poised for growth. For example, EDC recently released a study on San Diego’s software development industry. The study showed the region’s software ecosystem impacts more than 100,000 jobs in the regional economy, with an economic impact totaling $12.2 billion annually; venture-capital investment in software was up by 38 percent in 2015; and the industry has an anticipated employment growth of 18.1 percent in the next year—all signs that the region’s tech ecosystem is gaining national visibility.
“The local economy picked up steam in January after slowing a bit toward the end of 2015 – a typical trend as seasonal, holiday jobs phase out. Key sectors like manufacturing, construction, engineering, and health care all posted outstanding figures this month. These trends are also reflected in the demand for staffing services, which posted seven percent growth in employment in January.”
Phil Blair, Executive Officer
Manpower San Diego
This post is part of an ongoing monthly series dedicated to the California Employment Development Department (EDD) monthly employment release and is brought to you by Manpower.
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The California Employment Development Department (EDD) released statewide county employment data today for the January 2016 period, as well as revisions for 2015. This month’s data shows that San Diego's labor market fundamentals remained strong, as unemployment continued to fall amid solid and steady job growth.
The unemployment rate fell to 4.7 percent in January, the lowest since September 2007. The rate is down 0.1 points from the revised December number and 1.2 points from the previous year. The San Diego rate remained much lower than the statewide unemployment rate of 5.8 percent. The national unemployment rate rose substantially to 5.3 percent, well above the San Diego rate. The rate dropped in part due to a typical seasonal decline in the labor force from December to January, but the annual labor force increased by 6,100, with 16,900 fewer unemployed persons since January 2015.
Employment dropped back below 1.4 million in January, but seasonal declines are typical after the holiday season. More importantly, year-over-year employment went up by 38,200, a 2.8 percent increase. San Diego’s growth rate was again much higher than the 1.9 percent national rate. While the year-over-year growth slowed as 2015 progressed, the growth rate climbed again in January, which is a positive sign of momentum in the region.
The private sector drove employment growth in January, as private employment accounted for 90.3 percent of all employment growth over the year. The total private sector grew by 3.1 percent year-over-year, out-pacing the private U.S. growth rate of 2.2 percent.
Private growth was driven largely by service providers, but goods producers experienced another strong month. Manufacturers and construction companies drove 24.0 percent of private job growth in January. The two industries added a combined 8,300 jobs in January. The manufacturing industry in particular had a very strong month, posting 3.4 percent growth, compared to the national growth rate of 0.4 percent in the industry. Revisions showed that 2015 was an even stronger year than previously understood, with an annual 2015 growth average of 3.7 percent.
Professional, scientific, and technical (PST) services, which is strongly associated with the region’s innovation economy, slowed substantially in January, but it is unclear if there are complications with the EDD revision. Prior to the revision, the industry showed6.6 percent growth in 2015. With revisions, that growth is only 1.9 percent. It is unclear if job growth previously categorized as PST was moved to another sector like manufacturing or management, as national revised figures don't show the same dramatic shift. Architecture and engineering, a subset of PST services, showed solid growth of 5.1 percent despite the overall PST figure.
Other key drivers for growth included the region’s healthcare sector, which added 7,100 jobs and accounted for roughly one fifth of the region’s private job growth in January. Tourism experienced strong year-over-year growth, adding 5,900 jobs and contributing to 17.1 percent of growth.
In all, the January report released today showed many continued positive signs for San Diego's economy. The dramatic adjustment to PST employment raises some questions, and we will have to wait and see what was behind this revision by EDD. Otherwise, the region posted another month of solid yearly job growth, in large part due to the booming manufacturing and construction industries. Unemployment fell despite statewide and nationwide increases, and growth was spread out across a variety of key high-wage and base sectors in the region.
This report was performed with assistance from the CBRE research team in San Diego.
“San Diego’s labor market experienced a very positive year in 2015, despite a slower than usual December. The region added tens of thousands of jobs since the previous year, primarily in high-wage and productive industries. This drove thousands of people back to the labor force and resulted in 20,000 fewer unemployed.”
Phil Blair, Executive Officer
Manpower San Diego
This post is part of an ongoing monthly series dedicated to the California Employment Development Department (EDD) monthly employment release and is brought to you by Manpower. Click images to enlarge in a new tab/window.
The California Employment Development Department (EDD) released statewide county employment data today for the December 2015 period. This month’s data allows for a complete picture for year 2015, and shows that San Diego’s economy grew at an accelerated pace in 2015 compared to recent years.
The unemployment rate closed the year at 4.7 percent in December, the lowest since June 2007. The rate is down 0.1 points from the previous month and 0.8 points from the previous year. The San Diego rate remained much lower than the statewide unemployment rate of 5.8 percent. When averaged over the entire year, the unemployment rate closed at 5.0 percent for 2015, down substantially from the 2014 average of 6.4 percent. The 2015 annual average is the lowest since the recession. Meanwhile, the annual average labor force was up 17,700 from 2014, while unemployment claims were down 20,300, which indicates a healthy rate drop.
The region’s year-over-year employment for December grew below the 2015 average. San Diego’s total non-farm employment grew by 37,500 jobs from December 2014 to December 2015—2.7 percent growth. San Diego’s growth rate was again much higher than the 1.9 percent national rate. In total, the San Diego region averaged 3.1 percent annual growth in 2015, compared to only 2.3 percent in 2014. This was the highest annual percent growth rate since 2000, as the region added 41,400, the most jobs added since 1999.
The private sector drove employment growth in 2015, as private employment accounted for 91.7 percent of all employment growth over the year. The total private sector grew by 3.4 percent on average in 2015, out-pacing the private U.S. growth rate of 2.1 percent.
Private growth was driven largely by service providers, but goods producers experienced a particularly strong year. Manufacturers and construction companies drove 15.9 percent of private job growth in 2015, and finished the year strong. The two industries added a combined 6,000 jobs in 2015, the most since 2004. The manufacturing industry in particular added the most jobs and experienced the highest annual percent growth rate since 1998. The boom in the construction market is likely a response to demand pressures in the commercial and residential real estate markets, as quality space is becoming increasingly scarce, according to CBRE MarketView reports. The growth in manufacturing and wholesale trade are putting pressure on the industrial market in particular, as the industrial vacancy rate in Q4 2015 was at the lowest ever recorded.
Professional, scientific, and technical (PST) services, which is strongly associated with the region’s innovation economy, grew by 6.6 percent in 2015, which was the highest growth rate among major industries in the region (tied with construction). The 2015 growth rate was the highest posted since 2005 in the industry. PST services accounted for more than one fifth of all private annual job growth in San Diego. Comparatively, the national PST sector grew by only 3.6 percent in 2015. Scientific research and development services, a subsector of PST that represents many cleantech and life science companies, grew by 5.2 percent.
Other key drivers for growth included the region’s healthcare sector, which added 7,000 jobs and accounted for roughly one fifth of the region’s private job growth in 2015. Tourism experienced another seasonal hit in December, but the annual average was strong. The industry added 6,500 jobs in 2015, a 3.7 percent growth rate. Growth slowed in the latter half of the year, particularly in food service and drinking places, which was driving higher growth earlier in 2015.
With a full year of 2015 data on the books, it was a very positive year for San Diego’s economy. The national economy showed tepid growth throughout the year, while San Diego consistently looked much stronger than the country as a whole. Key industries like manufacturing, construction, health care, and PST services had impressive, and by some measures, record years. While concerns around decreases in federal spending for science and defense will likely thwart some expectations for 2016, other factors like the Department of Defense’s shifting focus toward cybersecurity and national trends toward manufacturing re-shoring could prove promising for San Diego. Given these trends, future outcomes remain largely uncertain, but San Diego’s economy appears well positioned for growth through 2016.
This report was performed with assistance from the CBRE research team in San Diego.
“When an influx of people join the labor force and begin seeking employment, you generally see a lag before they find jobs. In October, a substantial amount of people joined the labor force, but reported as unemployed. In November, it appears as though those people found jobs, as we saw no change in the labor force, but a significant reduction in unemployment.”
Phil Blair, Executive Officer
Manpower San Diego
This post is part of an ongoing monthly series dedicated to the California Employment Development Department (EDD) monthly employment release and is brought to you by Manpower. Click images to enlarge in a new tab/window.
The California Employment Development Department (EDD) released statewide county employment data today for the November 2015 period. This month’s data indicates that San Diego is showing strong signs of growth in the local economy as we near the end of 2015.
The unemployment rate fell to 4.8 percent in November, down 0.2 points from the previous month. In October, the region experienced a large jump in the labor force without a large jump in employment, which caused the unemployment rate to rise back to 5.0 percent. The labor force stayed virtually the same in November, but higher employment and lower unemployment brought the rate back down to 4.8 percent. The number of unemployed fell by 2,000 from October to November, indicating that the fall in unemployment was healthy and not due to a reduction in the labor force.
The rate is now 1.2 points lower than the previous year and on par with the national unemployment rate at 4.8. The region remains much lower than the statewide unemployment rate of 5.7 percent. The unemployment rate is now expected to end the year in the mid-four percent range in December, resulting in an annual average of about 5.0 percent for 2015, down substantially from the 2014 average of 6.4 percent.
The region’s overall year-over-year employment grew, but below the 2015 average of 3.1 percent. San Diego’s total non-farm employment grew by 37,800 jobs from November 2014 to November 2015—2.7 percent growth. San Diego’s growth rate was again much higher than the 1.9 percent national rate. The San Diego region is still expected to average 3.1 percent annual growth in 2015, compared to only 2.3 percent in 2014.
Year-over-year private sector growth continued to drive the economy, as private employment drove 92.1 percent of all employment growth. The total private sector grew by 3.1 percent, out-pacing the private U.S. growth rate of 2.2 percent. Private growth was driven largely by service providers, but goods producers experienced a particularly strong month. Goods producers like manufacturers and construction companies drove 24.1 percent of annual private job growth. This was due to both strong growth in those industries and uncharacteristically weak growth in service providing industries like professional and business services and trade.
From November 2014 to November 2015, the manufacturing industry added 2,400 jobs—a 2.5 percent growth rate. The ship and boat building industry continued to grow at an outstanding rate of 10.3 percent. Meanwhile, the construction industry added 6,000 jobs and grew by 9.4 percent. Continued growth in goods producing industries remains a positive sign for the region, as these jobs tend to be accessible and pay above the median wage for the region.
Professional, Scientific, and Technical (PST) services, which is strongly associated with the region’s innovation economy, grew by 5.5 percent and was one of the highest growth industries in the region. PST services accounted for roughly one fifth of all private annual job growth in San Diego. The national PST sector grew by only 3.6 percent. Scientific research and development services, a subsector of PST that represents many cleantech and life science companies, grew at a relatively low 3.3 percent compared to previous months.
Other key drivers for growth included the region’s healthcare sector, which added 8,600 jobs and accounted for roughly one quarter of the region’s private job growth. Tourism experienced a major seasonal hit last month, but rebounded slightly in November. The industry added 1,100 jobs from the previous month and 3,700 overall since last November. The annual growth rate in the industry has slowed in the latter half of the year, but still growing, particularly in food service and drinking places.
November’s employment numbers included more positive signs for the region’s economy, particularly when compared to the year before. The region has 13,200 more people in the labor force, 17,000 fewer unemployed, and has added more than 37,000 jobs. The growth rates have slowed in recent months, which may be a reflection of slowing national trends, an indication of mounting issues in the economy, or a brief blip in an otherwise outstanding year. Annual growth rates have varied throughout the year, but have consistently remained above state and national trends, with growth concentrated in high-tech and high-wage sectors. With one month of data remaining in 2015, all signs point to a solid overall year for the region’s economy.
