Optimistic outlook for state, national economies continues
This week Beacon Economics released its second Intelligence Report for the City of Riverside, including summaries of the state and national economic conditions and outlook.
Sponsored by The City of Riverside and the Greater Riverside Chambers of Commerce, Beacon was retained to provide the community with a detailed overview of the local economy so that businesses and the agencies working to help businesses can develop better short and long-term strategies.
The report was undoubtedly the most positive summary of economic conditions since the onset of the Great Recession. According to Beacon, the reason for that is largely because “The fundamentals are finally starting to catch up with expectations,” adding that “the contributions to growth from consumer spending, business investment, and residential construction all accelerated at the end of the year, and the first quarter of 2013 looks even better.”
Even the seemingly negative aspects of 2012’s fourth quarter – a draw-back in inventories and reduction in defense spending – received a positive forecast for 2013 based on increasing manufacturing orders and anticipatory cuts in spending by the US Defense Department that were absorbed in 2012. Still, the national budget, changes to the national healthcare system, and slower-to-recover non-residential construction are noted as economic challenges looking ahead.
At the state level, California’s recovery appears to be even stronger than expected. Recent revisions to the state jobs report shows that California has added back 680,000 of the 1.3 million jobs lost during the downturn, making the state “one of the driving forces in the nationwide jobs recovery.” In addition, Inland Southern California is outpacing many other areas of the state in job growth.
Locally, the City of Riverside continues to play a vital role in the regional recovery. According to Beacon, total private employment grew by 3.4% from February 2012 to February 2013, outpacing the 3% growth experienced by the region and the 2.5% pace of the state over the same period. While the growth was felt across most sectors, the 1.6% year-over-year increase in Professional and Business Services and the 4.5% in the Professional, Scientific and Management subsector may be the most promising for long-term positive impact to the economy.
Consumer spending and residential real estate are also improving at a respectable pace. While neither of these have reached pre-recession levels, both were fueled by growth rates not in line with incomes. Conversely, the increases in spending and home values over the past year are attributed to healthier circumstances of both businesses and personal income.
While conditions in the region and nation continue to improve, it is also apparent that the economy of Riverside’s future will have a more resilient and sustainable structure. Through the collaboration of leaders and policy-makers from business, government, neighborhoods and education, Riverside is improving more that just its economic data; the community is working to ensure quality of life remains a driver for long-term prosperity.
To download and read the full Regional Intelligence Report, click here.