Inland Empire To Make ‘Slow’ Economic Recovery

The Inland Empire’s economy will plod ahead over the next several years, with job growth dependent on western migration and an overall change in the business climate in Southern California, according to an economic report released today.

Claremont McKenna College and the UCLA Anderson School of Management issued their first Inland Empire Economic Forecast, a joint assessment of the economies of Riverside and San Bernardino counties.

“The Inland Empire economy has started to stabilize and rebound in some sectors, particularly in retail sales and purchases of durable goods, such as cars,” said Marc Weidenmier, associate professor of economics at Claremont McKenna College.

He was one of several economists, business professionals and government officials who spoke today at the inaugural Inland Empire Forecast Economic Forecast at Citizens Bank Arena in Ontario.

“We still have not seen a turnaround in the housing sector, although the housing market has stabilized,” he said. “It will be a long, slow recovery.”

According to the report, double-digit unemployment will remain the norm throughout the Inland Empire until 2014.

Riverside County’s jobless rate in August was 15.3 percent, and San Bernardino County’s rate was 14.2 percent, according to the California Employment Development Department.

The public sector accounts for one-fifth of the Inland region’s employment base. But government payrolls have dropped 4 percent over the last three years, as guarded consumer spending and plummeting property values reduced retail and property tax receipts, according to the report.

The authors pointed out that the median price of a single-family home in the Inland Empire has dropped from $380,000 in 2007 to $200,000 today — a nearly 50 percent decline.

The construction industry, consequently, has borne the brunt of job losses, with payrolls sinking 80 percent, according to the report.

The recession’s impact on activity at the ports of Los Angeles and Long Beach, where imports have dropped 28 and 42 percent, respectively, since October 2007, took a major toll on the logistics industry, a leading job creator in the Inland region, the report stated.

With some 20 percent of the region’s workforce commuting to jobs in Los Angeles and Orange counties, the Inland Empire stands to benefit from any uptick in economic activity in the L.A. metropolitan area, according to the report.

“An additional boost may come from migration,” said UCLA Anderson Forecast economist Jerry Nickelsburg. “The preliminary evidence on recession- based migration shows an in-migration to parts of the Inland Empire from Arizona. Family connections and unemployment may be reversing some of the migration patterns of recent years, and though the magnitude is not yet known, it will tend to push up local demand.”

The report dovetails with many of the findings in economic assessments provided to the Riverside County Board of Supervisors in May.

Economic consultants from Los Angeles-based Beacon Economics and Cal State Fullerton predicted that regional unemployment will hover around 10 percent for the next three years.

The Cal State Fullerton consultants said the area’s economic recovery will “bear more similarities to a mild recession than to an expansion.”

Beacon Economics President Chris Thornberg said the Inland Empire will not stage a healthy recovery until the macroeconomic picture improves, and he was not confident that would happen with the federal government’s current fiscal policies.