Business activity in the Inland Empire has continued to recover from the pandemic along a steady upward trajectory, outperforming growth in U.S. GDP in the latest numbers. According to the new Inland Empire Business Activity Index released today by the UCR School of Business Center for Economic Forecasting and Development, in the second quarter of 2021, business activity in the region expanded by 8%, outpacing a 6.6% growth rate in U.S. GDP and topping its own 7% growth from the first quarter.
“The Inland Empire’s better relative performance stems both from the fact that many parts of the local economy have shed the effects of the pandemic and because the area fell into a deeper hole during the crisis than the nation overall, leaving more room for growth,” said Taner Osman, Research Manager at the Center for Forecasting. “That said, we anticipate the region will continue to experience a more rapid growth rate in its business activity this year, reaching pre-pandemic levels by the end of 2021.”
In the last edition of the Index, the Center for Forecasting estimated that business activity in the Inland Empire would rise between 6% and 10% through the end of 2021. Following this latest expansion, the forecast is currently projecting between 3% and 6% growth through the remainder of the year.
Although the analysis raises concern surrounding the resurgence of COVID-19 cases related to the Delta variant, Osman notes that with a large portion of California’s population now vaccinated, the virus will not have the same impact on the economy going forward.
Overall, the brightest spot in the Inland Empire’s economic recovery continues to be the housing market, according to the new analysis. From the second quarter of 2020 to the second quarter of 2021, the region’s median single-family-home price jumped by 24.7%, a stronger growth rate than in neighboring Orange County (22.5%) but lower than in Los Angeles (27.5%) and San Diego (25.8%) Counties.
Despite the price surge, as one of the last bastions of relatively affordable housing in Southern California, the Inland Empire’s market still has room to grow. “The fundamentals underlying the region’s housing market—high demand, low inventory that will continue for years, relative affordability, and low interest rates—suggest that competition for local housing will remain strong and continue to drive price increases into the foreseeable future.”
View the new Inland Empire Business Activity Index here.