San Bernardino County surpasses pre-recession economic employment peak; strong forecast for 2017

Steady gains in logistics, healthcare and construction are driving San Bernardino County’s economy and job market, which are now well ahead of where they were before the Great Recession, a new report shows.

And, says Inland Empire economist John Husing, look for the momentum to continue in 2017.

“There is every reason to anticipate growth levels similar to those of 2016 given the forces impacting the key sectors that make up the inland region’s economic base,” said Husing, who prepared the report for the Southern California Association of Governments (SCAG).

In-depth economic analyses covering each of the six counties comprising SCAG will be formally released on Thursday, Dec. 1, at the Seventh Annual Southern California Economic Summit at the L.A. Hotel Downtown. The Summit, sponsored by SCAG and the Southern California Leadership Council, will include discussions on improving the economic viability of local communities, attracting new businesses and industry clusters, and how our region can become a bigger force in the innovation economy. More than 400 business and elected leaders are expected to attend.

For San Bernardino County and the Inland Empire, five industry sectors are driving economic growth:

Logistics: According to Husing’s report, goods movement accounted for 23.3 percent of jobs created in the Inland Empire from 2011-2016, and continues to grow. In 2017, the sector is likely to create another 11,221 jobs.

Construction: Though still below its pre-mortgage crisis peak, this sector is regaining its status as a major driver of the local economy “given its undeveloped land and Southern California’s need for single-family homes, industrial facilities and infrastructure,” the report stated. From 2012-2016, the sector gained back 31,305 jobs and should add another 5,500 in 2017.

Healthcare: A shortage of healthcare workers, a growing – and aging – population and an increased number of insured people as a result of the Affordable Care Act have made this one of the fastest-growing career fields in San Bernardino County. The sector is expected to add 4,335 jobs in the Inland Empire in 2017.

Manufacturing: Though still well below its pre-recession peak, manufacturing is expected to add 2,879 jobs in the Inland Empire in 2017. Husing said the I.E.’s “sub-par” performance in manufacturing is indicative of a bigger statewide challenge. Since 2010, California has accounted for only 4.3 percent of the 802,000 manufacturing jobs created in the United States. “This stems from California’s punishing regulatory environment plus energy policies that now have the state’s electrical costs 43.3 percent above Nevada, the second most expensive state west of the Mississippi,” Husing said.

Professional, management and scientific work: This sector is emerging as an economic force, prompted by rising educational attainment, a growing need for professional service providers to support other industries and the demand for engineers as the construction sector re-emerges. The sector is expected to add 1,021 jobs in the Inland Empire 2017.

In all, the Inland Empire has created nearly 240,000 jobs since the Great Recession bottomed out and now stands 96,798 above the pre-recession high.

The report notes that challenges remain for San Bernardino County the Inland Empire, notably high poverty levels and income disparity. Today, 17.8 percent of the two-county region’s population – and 25 percent of those under the age of 18 – live below the poverty line. Compounding the problem is the fact that even with recent gains, educational attainment in the Inland Empire lags behind the rest of Southern California: 47.1 percent of adults had a high school education or less in 2015, and only 20.1 percent had a bachelor’s degree or higher.

“Unfortunately, a marginally educated population tends to correlate with high levels of poverty given the direction that technology is taking good paying jobs in the 21st Century,” Husing said.

Alan Wapner, an Ontario City Council member and Second Vice President of SCAG, said the report underscores a wide range of opportunities and challenges facing San Bernardino County.

“It’s clear, we must act with a great sense of urgency when it comes to educational attainment and workforce development,” Wapner said. “We need to make sure that we’re not simply replacing good jobs that have sustained our middle class with low-paying positions requiring minimal training and education.”

He added that transportation access is key to the region’s future.

“Our location, and our ability to move people and goods, is one of our biggest assets,” Wapner said, noting that the return of Ontario International Airport to local control will be a major economic driver for generations to come.

Hasan Ikhrata, Executive Director of SCAG, said the Economic Summit is an opportunity to look at new directions the six-county region can take to improve its economic viability.

“The innovation economy, in particular, offers great promise for our region,” Ikhrata said. “Taking advantage of that requires commitment and collaboration involving business, government and the education community. The Summit is a platform for that discussion. What happens after that will determine our success.”