According to the UCR Business School Centre for Economic Forecasting and Development. However, the increase in business activity in the region in the second quarter of 2022 (the latest data available) does represent a significant decline in growth in recent quarters.
Business activity in the Inland Empire rose 1.6% in the latest figures, compared with 4.7% in the first quarter of 2022 and 6.4% in the fourth quarter of 2021. On the other hand, US GDP contracted by 0.6% in the most recent quarter. Also, the short-term outlook for the Inland Empire remains positive, with local business activity expected to grow by 2% to 3% over the next 12 months.
According to the analysis, IE’s growth rate is expected to decline in the long term as the region’s economy has firmly returned to pre-pandemic conditions.
“The stability of the Inland Empire’s overall economic recovery and forecasts for continued growth are driven in part by the strength of its largest industries, transportation and warehousing, which boomed during the pandemic but are now slowing down,” said Taner. Osman, research manager at the Center for Economic Forecasting, is also one of the authors of the index. “As important as the slowdown we’ve seen is the fact that the local housing market has cooled considerably due to rising interest rates, leading to a weakening of the broader economy and business activity.”
According to the report, even accounting for local inflation, the real cost of owning a home in the Inland Empire has risen 24.5% since the start of the year. at the same time,
Average hourly earnings for private sector workers in the region fell by 6.1%, adjusted for inflation.
The impact is clear: Sales of existing single-family homes, which account for the largest share of the Inland Empire residential market, fell 9.3 percent in the first half of the year. Still, prices rose 17.9% over the same period, despite the drop in sales. “These numbers are a testament to the severe undersupply of housing in Southern California and the clear demand for housing across the state,” Osman said.
Check out the new Inland Empire Business Activity Index.