A note from our Senior Director.
Before joining EDC in 2016, I spent more than seven years as an economist and forecaster. On my last day, my boss gifted me a crystal ball as a facetious reminder of how economic forecasting is often more art than science—perhaps mystic, even.
Nearly seven years later, that crystal ball sits on my desk and continues to serve as that reminder. Particularly at the start of every new year. As we look ahead to 2023, there are many economic headwinds to be concerned about—inflation, labor shortages, and record housing unaffordability.
One of the biggest stories at the moment is the massive layoffs in the technology industry. This news is incredibly painful for those who have lost their jobs and should not be minimized. However, much of the reduction in workforce reflects a reversal of the over-extension by these firms in 2022. More importantly, there is a silver lining for those workers affected in that nearly every industry is still hiring and struggling to fill currently open positions. The country currently has the lowest ratio of available workers to unfilled positions in 15 years.
When we look at the San Diego region more specifically, we find that many of the large layoff announcements come from companies with small and or niche presence in San Diego. Last week, official employment statistics were published that showed San Diego’s unemployment rate fell again in December to 2.9 percent. The region ended the year with 50,500 more jobs and saw the labor force grow 1.2 percent. San Diego’s labor market ended 2022 in one of its strongest positions on record.
Throughout 2022, San Diego companies posted more than 53,000 unique jobs openings. As we begin 2023, local employers are still hiring. In fact, during the first few weeks of the new year, local tech companies have already posted 1,213 unique positions with a median advertised salary of $92,000.
The news of tech layoffs and high cost of financing has not scared off investors from San Diego startups. Rather they are flocking toward quality companies with serious growth prospects—something our region is known for. During the fourth quarter of 2022, San Diego tech startups pulled in $671 million in venture capital funding, which continues to trend up relative to pre-pandemic levels.
So when I look at that crystal ball, I see…well I don’t see much. But when I look at the data and past the news headlines, I see a San Diego economy that is diverse and resilient. I see a region that is well positioned to usher the next era of semi-conductor production and clean technology innovation.
While the winds may shift, our north star remains the same. Nationwide talent shortages are a stark reminder that we must build our own skilled workforce. We must continue to support quality job growth in our small businesses by connecting them to new customers locally and around the globe. We must invest in the infrastructure needed to ensure businesses can grow and working families can afford to enjoy all that our beautiful region has to offer. Together, we can make our economic vision a reality.
Happy new year,
Eduardo Velasquez
Sr. Director, Research & Economic Development
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