Report: San Diego's Economy To Remain Sluggish
San Diego's economy should remain sluggish this year, hurt by the impact of a slowing national economy, according to a forecast scheduled to be released Wednesday by the National University System Institute for Policy Research.
The institute's Kelly Cunningham said regional economic growth this year could be 1.9 percent, short of the 2.1 percent estimated for last year.
"Going forward San Diego is likely to continue to slightly trail all of California and essentially match the rest of the nation," Cunningham said.
"In our forecast for San Diego, the region excels in some sectors, such as high-value (research and development) technology businesses, but lags in other areas of real estate and business services," Cunningham said. "Military spending cutbacks have also slowed the region's economic outlook."
He said the "tepid" growth translates into a forecast for 34,000 payroll jobs to be added in the region, while annual unemployment approaches 4.8 percent. The improvement in unemployment is a mix of increasing job opportunities and lower labor participation rates, he said.
The result is that median household income in San Diego, after adjusting for inflation, still has not returned to pre-recession levels.
The NUSIPR reported that middle class jobs have gone from 56.6 percent of all positions in the county in 2001 to 49.5 percent in 2014. Cunningham said that as demand for higher skilled and highly compensated positions continues to grow, lower wage jobs not easily replaced by machines or technology also increases.
The result has been that San Diego's economy is more hour-glassed shaped as an increasing number of jobs accumulate on the top and bottom of the income scale, and fewer in the middle. This has significant implications for San Diego's housing, income, education, and business needs beyond 2016, he said.
According to the report, multiple indicators suggest the U.S. economy will continue to be lethargic, though a recession is not yet in the cards.