Business activity in the Inland Empire is in clear-cut recovery mode and will reach pre-pandemic levels by the end of this year, according to the new Inland Empire Business Activity Index released today by the UCR School of Business Center for Economic Forecasting and Development. The analysis estimates that business activity in the region will rise between 6% and 10% through the end of 2021.
“The Inland Empire, and California overall, are primed for growth,” said Taner Osman, research manager at the Center for Forecasting. “The economic fallout the region suffered throughout the pandemic recession, while considerable, has been erased from many parts of the economy; lagging areas, such as the labor market, are not recovering as quickly as we would like but should be boosted by the accelerated rate of vaccinations.”
Looking back, in just the first quarter of this year, business activity has increased at an annualized rate of 7% in the Inland Empire, comparing favorably to a 6.4% growth rate in U.S. GDP over the same period. The region is poised to continue outpacing the nation over the coming months, although this is partly because it fell into a deeper hole with respect to output during the pandemic’s health-mandated closures and restrictions.
The weakest spot in the Inland Empire’s economic recovery remains the all-important labor market, although this lag is not unique to the region and is occurring across the state and nation as well. To date, the Inland Empire has recovered 67% of the jobs it lost in the historic declines of early 2020. Although there is still some distance to go to achieve full recovery, the region is significantly outpacing other areas in Southern California, including Los Angeles (36% of jobs recovered) and Orange County (47% of jobs recovered). Except for January, the Inland Empire has enjoyed relatively strong employment growth every month of 2021.
More importantly, with this growth, the local workforce has returned to pre-pandemic levels. “With the state and region hitting vaccination targets, confidence is rising, and employment growth should pick up quickly,” said Osman. “With California fully reopened, the Inland Empire is expected to continue adding jobs on a faster track.”
View the new Inland Empire Business Activity Index here.