Inland region poised for economic growth new report says


It could be years before the Inland Empire gains back the jobs that were sapped by a devastating economic downturn, according to a report released Tuesday, which also showed that the region was poised for improvement.



It could be years before the Inland Empire gains back the jobs that were sapped by a devastating economic downturn, according to a report released Tuesday, which also showed that the region was poised for improvement.

And that has prompted cautious optimism from employers and job seekers.

The report, the Los Angeles County Economic Development Corp.’s 2014-2015 Economic Forecast & Industry Outlook, notes that California’s unemployment rate is falling, more people are finding jobs, the housing market is improving and budget surpluses are finally in sight.


That’s got economists and others seeing some promising signs for the Inland Empire, but they are tempered by the toll of the last five years of devastating recession.

“The Inland Empire has a lot of strength in construction, but that sector was very hard hit in the Great Recession,” said Robert Kleinhenz, the LAEDC’s chief economist, who helped research and prepare the report. “We’re still looking at several years before we recover all of the jobs that were lost in the recession.”

So far, the I.E. has regained more than 40,000 of the 147,000 jobs lost during the downturn, according to the report. And it added 14,000 jobs in 2013, the report adds.


There’s a long way to go, but Brett Guge, executive vice president and administration at California Steel in Fontana, sees some good signs, even for a business that relies on construction to keep going.

“I would say cautiously optimistic,” Guge said, when asked about employment trends. “The construction market is a big part of what drives our business, and while we do see some life it’s certainly coming back slowly, but it is does appear to be coming back.”

He’s right, according to Tuesday’s report.


Wage and salary employment in the region rose, and sectors such as leisure and hospitality, retail, healthcare and warehousing also saw gains last year.

The I.E.’s gains were reflected statewide.

The state has regained 70 percent of the more than 1.3 million jobs it lost as a result of the Great Recession, the report said, although the recovery continues to be “very slow.”

“Regionally, the recovery is advancing in nearly every part of the state,” the report said. “Now, after nearly five years of recovery, California is on a more solid footing.”


The report notes, however, that California is currently grappling with one of its worst droughts on record. Southern California will likely receive little water from Northern California this year and more conservation and recycling will help the region keep pace with growth and reduce reliance on imported water.

Orange and San Diego counties led the Southland’s growth last year with year-over-year job gains of 2.1 percent and 1.8 percent respectively. Los Angeles and Ventura counties were close behind with employment growth of 1.7 percent.


But the Inland Empire was still struggling with growth of just 1.2 percent, the report said.

The Inland Empire’s most recent unemployment rate of 9.2 percent is expected to average 9 percent this year and 8.2 percent in 2015.

That has jobseekers hoping they will reap the benefit.

Nashand Smith, 49, was busy Tuesday at the San Bernardino County Department of Workforce Development Employment Resource Center looking for jobs in the area, in fear of becoming homeless, again.

The Rialto resident worked in the warehouse and homecare industries for 15 years before being laid off seven months ago.


“But I know it’s going to happen soon,” Smith said. “I keep on applying and applying, and I’m determined because I have to pay bills.”

With the unemployment rate dropping to its lowest in five years, Smith worries she won’t be able to compete with a force that is younger than she is.

“The cost of living will also start to go up, and while I do have a place to stay I am afraid of being homeless and not being able to pay for food, health insurance or things in your life that you need in general,” she said.


There’s reason to be hopeful but also cautious, said Miguel McQueen, deputy director of business services and operations with the Workforce Investment Board.

About a year and half ago the Workforce Investment Board offices in San Bernardino were busy. It was only until about eight months ago it started to see a decline in the number of folks walking through the doors.

He attributed drop to competing theories — the possibility people got tired of looking for jobs and the reality that some people got jobs.


“But the lower the unemployment rate, the more difficult it is for a person to get a job,” he said.

The trick going forward will be the quality of those jobs, economists said.

“A lot of hope has been placed on the transportation and logistics part of the economy, not just to generate jobs going forward but to also create a sizable number of well paying jobs,” Kleinhenz said. “Transportation, warehousing and utilities will grow by at least 2 percent this year in the Inland Empire. The job counts have already exceeded the pre-recession peak.”


The Inland Empire’s biggest employment gains this year are expected to come in retail trade (3,200 jobs), leisure and hospitality (3,200 jobs), health services (2,800 jobs) and government (2,500 jobs).

L.A. County and the Inland Empire are both poised for significant growth in residential housing, the study said.

L.A. County saw 15,700 housing unit permits issued last year and that number is expected to rise 34.4 percent to 21,100 permits this year, with another 28 percent gain in 2015. That would bring the total number of permits issued next year to 27,000.


The Inland Empire is primed for even more dramatic gains. The LAEDC said 8,900 housing unit permits were issued last year. That number will rise 53.9 percent this year to 13,700 permits and 45.3 percent next year to 19,900.

Meanwhile, Smith has her own forecast for the future.

“Between my background and prayers I’m hoping that will get me into the door,” she said.

Reporter Joe Nelson contributed to this report.



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