Thanks to its steadily growing industries, the
San Diego
County economy is poised to outpace the growth of the national and state economies through at least 2015, according to projections released yesterday by
Palo Alto 's Center for Continuing Study of the California Economy.
With a population of 3.1 million residents and a labor force of more than 1.4 million workers,
San Diego
County generates a gross regional product of $143 billion. That ranks the county as the world's 36th-largest economy, between and
.
Through at least 2015,
San Diego
County will be the fastest-growing region in California after the
Sacramento area, said economist Stephen Levy, who founded the center in 1969.
Levy, who was trained at MIT and Stanford, projects that job levels will grow by 20.7 percent in the county from 2005 through 2015, compared with 17.3 percent in
California and 13.4 percent in the nation.
“Sometimes we hear a lot of people complaining about how everyone's leaving California and how we don't have a strong economic base, but I think it's clear that San Diego and
California continue to have a strong economic base,” Levy said.
Marney Cox, economist with the San Diego Association of Governments, said Levy's study showed that the region is still a “relative hotbed” of job growth.
“Because of the slowdown in housing, the economy has recently been dragged down,” he said. “But I don't see any reason why
San Diego shouldn't regain its status as a job-generating machine through 2015.”
Levy projected that the greatest job growth will come through professional, business and information services. More than 37 percent of
San Diego 's workers are now employed in those industries, one of the highest concentrations in the state.
Levy projected that through 2015, 71,600 professional and service jobs will be created in the county, representing about 70 percent of the region's job growth.
As in the past few years, the largest growth will be in employment services, including temporary and part-time workers, Levy said. But management and technical consulting, computer sciences, architecture and engineering are also poised for growth.
“High-tech regions in general have this kind of concentration of services,” Levy said. “Some of the jobs are outsourced from tech companies, including laboratories that do work for biotech firms. Others reflect the fact that the region has a lot of venture capital and IPO (initial public offering) activity.”
San Diego ranks as the third-largest region in the nation for biotech, following the San Francisco Bay Area and
New England . It is ninth in the nation for venture capital funding.
PriceWaterhouseCoopers estimates that venture capital funding in
San Diego grew 10 percent last year to $1.1 billion. In comparison, funding grew 1.3 percent to $1.7 billion in Los Angeles and
Orange counties and 1.4 percent to $9.1 billion in the San Francisco Bay Area.
“We seem to have a knack for developing technology and research jobs here,” said Kelly Cunningham, economist with the San Diego Institute for Policy Research. Cunningham said Levy's projections of continued job growth seem reasonable.
Levy projected that wholesale, trade and transportation services will add 14,800 jobs by 2015, largely because of growth in trade with
. Tourism and entertainment services will add 11,200 jobs.
But manufacturing operations, which lost 18,800 jobs from 2000 to 2005 will shed an additional 500 by 2015, Levy said. And “resource-based” employers, including agriculture and fishing businesses, will cut 900 jobs.
Levy warned that one thing that could slow job growth in the county is the high cost of housing. Even after months of declining prices, home prices in
San Diego still are among the highest in the nation, and Levy warned that without more price corrections, housing prices are too high to support the projected job growth.
“You have a lot of great companies in
San Diego , but you have to be able to afford to live there,” he said. “Housing is the linchpin of the economy. You can't have continued economic growth unless you have enough housing.”
Levy said San Diego's housing prices make it much less competitive with other regions, including Seattle, Las Vegas, Portland, Denver and
Phoenix .
“The question is whether residents and political leaders are committed to making the region a great place to live and work so that companies and families will want and be able to locate here,” he said.
Cox, the SANDAG economist, noted that because of the high cost, the local housing market has expanded beyond the county's borders into Riverside, Imperial and Orange counties as well as
Tijuana . He does not think that trend is sustainable.
“People who choose to live here are going to have to rely more on condominiums and smaller, more dense, attached homes,” he said. “That's not the way people have lived in
San Diego in the past, but it will help us keep the costs down and keep things more affordable. We're going to have to do that.”
