In this issue we are rolling out our new expanded analysis of the Southern California economy. Coverage of Southern California will now include two separate publications of quarterly analysis for the region. The first publication will focus on the San Diego-Carlsbad metropolitan statistical area and the second on the Greater Los Angeles region, which includes the Los Angeles-Long Beach-Anaheim and Riverside-San Bernardino-Ontario metropolitan statistical areas.
The San Diego metro area labor market continues to strengthen, adding 25,700 jobs year-to-date to the area economy. Employment gains were spread across all major sectors, particularly leisure and hospitality, professional and business services, construction and financial activities. The San Diego metro area unemployment rate dropped dramatically by a full percentage point from 6.0 percent in December 2014 down to 4.9 percent as of July 2015. The tightening of the area’s labor market will put upward pressure on wages and draw more people into the labor force heading into 2016.
San Diego’s economy is positioned to benefit from the U.S. military’s pivot to the Pacific in the coming years. The San Diego Military Advisory Council’s recently released annual Military Economic Impact Study estimated that direct defense-related spending in the San Diego area totaled $24.8 billion for FY2015. Defense-related gross regional product is expected to have improved by 16.3 percent (nominal) from $38.7 billion for FY2014 to $45.0 billion for FY2015. The outlook for FY2016 defense spending within the region remains uncertain due to the looming federal budget negotiations in Washington D.C. Congress is unlikely to adopt a new FY2016 budget by October 1, but they can approve a continuing resolution.
Click here for the complete San Diego MSA Regional Economic Update: San Diego_2015_Q3.