inland empire blue
June 11, 2019

Inland Empire outpacing California in business establishment growth

Region has more than offset establishment losses from the ‘Great Recession’

Author: Victoria Pike Bond
June 11, 2019

The number of new businesses being established in the Inland Empire has vigorously outpaced new business growth in California as a whole, according to a new analysis released today by the UCR School of Business Center for Economic Forecasting and Development. While it’s well known that the region has experienced the fastest job growth in Southern California for several years now, the analysis was undertaken to reveal what is happening at a deeper level within industries and whether new businesses are emerging in response to the underlying employment trends. 

Indeed, they are. The total number of businesses in the Inland Empire grew by 11.1% between 2011 and 2016 (the latest numbers available), far outstripping the 8.6% gain in businesses statewide. Moreover, the 7,182 businesses that have been added in the region have more than offset the loss of nearly 2,000 businesses that occurred between 2006 and 2011 as a result of the Great Recession.

“What’s clear from our analysis is that despite the heavier losses suffered by the Inland Empire during the last downturn, in it’s recovery, the region has demonstrated an impressive resilience on a variety of fronts,” said Robert Kleinhenz, the report’s author and Executive Director of Research at the Center for Economic Forecasting. “In terms of both job and establishment growth, that resilience may be partly attributable to the IE’s greater affordability but it’s also related to impressive growth in the area’s most time-honored industry sectors as well as some relatively surprising growth from less dominant sectors.” 

According to the analysis, the Inland Empire’s robust growth in business establishments has been primarily driven by the health care, food and hotel services, construction, and transportation and warehousing industries. Health care enjoyed the largest absolute gain at 914 new businesses while transportation and warehousing experienced the largest percentage increase at 27.1% growth from 2011 to 2016. The establishment growth in all four industries is consistent with patterns in regional employment growth as most of the job growth in the region has come from these same sectors. 

Notably, the analysis also finds departures from overall trends in establishments and employment when looking at individual subsectors. For example, within the transportation and warehousing industry, most of the establishment growth occurred in the truck transportation subsector while most of the employment growth occurred in the couriers and messengers subsector. “This is a significant nuance,” said Kleinhenz. “Going beyond the topline numbers and understanding the shades and distinct activity of local industry subsectors is critical in developing effective economic development and other public policies.” 

The complete analysis, Business Establishments And Employment In The Inland Empire: An Industry Drilldown, is available here.

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