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Research Blog

March 3, 2016

By Matt Sanford, director of economic development

As I fly over Palmdale and glance down at one of the last large aerospace manufacturing facilities in the Southern California, it is a reminder that the aerospace industry as a whole is experiencing dramatic change. Some of the large industrial centers still exist and are highlights of the heritage of the industry. But the landscape as a whole is changing.
 
San Diego is the place where Charles Lindbergh built the Spirit of St Louis and since then, Southern California has been at the forefront of aerospace innovation. Today, it continues to be a hub for innovators looking to push the envelope. But instead of erecting more large manufacturing facilities, we will see this innovation in entrepreneurs and startups, in tech companies that are entering the industry, and in legacy industry leaders who are pioneering new technologies, and driving convergence with other tech sectors to create new capabilities.
 
Now, we are creating new sensors and systems to push the envelope even further. The James Webb Space Telescope being developed by Northrop Grumman in El Segundo will give us the most comprehensive look at the universe to date. The technology developed at ViaSat in Carlsbad is creating the fastest satellite broadband available to the public. San Diego is also home to Brain Corporation, 5D Robotics and the Center of Excellence for Northrop Grumman’s unmanned systems division. These companies, among others, are creating systems that will work autonomously to take on the dull, dirty and dangerous tasks that put people, both services members and private citizens, at risk.
 
So how do we quantify this activity? Through a report by the Los Angeles County EDC and San Diego Regional EDC covering the eight county Southern California region, we learned there are over 85,000 direct jobs in our aerospace industry. The total employment impact is nearly a quarter million people and it’s growing. In San Diego County alone, the industry has grown by 66.7 percent since 2004. 
 
The rich heritage of the industry has brought companies and talent to Southern California and San Diego to create a formidable ecosystem. But there are challenges. As we move forward, we must continue to support our aerospace manufacturers. We must also be proactive in identifying and supporting new sectors by aligning our universities to stay at the forefront of research and innovation, and working with the state to refute the claims that aerospace is a dying industry. Finally, we must stay at the forefront of the convergence between tech and aerospace, as it will continue to be where Southern California and San Diego can lead the industry. 
 
Even with new large contracts to develop platforms like the Long Range Strike Bomber, we must realize that as a percentage, those in the industry will be fewer on the factory floor, and more in labs and behind computers.
 
It is an exciting time for the aerospace industry in Southern California. The ecosystem is changing rapidly. It brings with it opportunity for seemingly endless growth and development of new technologies.
 
For more information, see the full study and fact sh eet.
March 1, 2016

The notion that the aerospace industry is in decline is dead wrong.  And now, thanks to a study conducted by Los Angeles County Economic Development Corporation (LAEDC) in partnership with San Diego Regional EDC, we have the numbers to prove it. Released today, The Changing Face of Aerospace in Southern California, provides an in-depth analysis that describes the highly developed industry cluster across eight Southern California counties. In total, the industry impacts nearly 250,000 jobs throughout Southern California. 

Across the Southern California region, aerospace directly accounted for 85,500 jobs – 14 percent of the US industry employment. Additionally, San Diego is home to 12,040 aerospace jobs – approximately 14 percent of Southern California’s aerospace industry. With industry wages averaging $105,715 a year, aerospace workers are among the highest-paid in the SoCal region- almost twice the average pay of other industries.

Thanks to Northrop Grumman’s Unmanned Center of Excellence in Rancho Bernardo and SPAWAR – the Navy’s R&D arm in San Diego – San Diego excels in aerospace technologies.

The aerospace industry not only serves as a crucial pillar of our statewide defense strategy, but with the rise of UAVs and robotics, it also represents a new frontier of innovation – one that is dependent on strong statewide support and innovative policies.  The report was released as part of Southern California Aerospace Day in Sacramento

The report was made possible through the generous funding of Bank of America, California Manufacturing Technology Consulting, Northrop Grumman Corporation and PricewaterhouseCoopers LLP (PwC).

For more information, see the fact sheet.

 

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January 22, 2016

Phil Blair

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“San Diego’s labor market experienced a very positive year in 2015, despite a slower than usual December. The region added tens of thousands of jobs since the previous year, primarily in high-wage and productive industries. This drove thousands of people back to the labor force and resulted in 20,000 fewer unemployed.”
Phil Blair, Executive Officer
Manpower San Diego


This post is part of an ongoing monthly series dedicated to the California Employment Development Department (EDD) monthly employment release and is brought to you by Manpower. Click images to enlarge in a new tab/window.

Highlights

The California Employment Development Department (EDD) released statewide county employment data today for the December 2015 period. This month’s data allows for a complete picture for year 2015, and shows that San Diego’s economy grew at an accelerated pace in 2015 compared to recent years.

The unemployment rate closed the year at 4.7 percent in December, the lowest since June 2007. The rate is down 0.1 points from the previous month and 0.8 points from the previous year. The San Diego rate remained much lower than the statewide unemployment rate of 5.8 percent. When averaged over the entire year, the unemployment rate closed at 5.0 percent for 2015, down substantially from the 2014 average of 6.4 percent. The 2015 annual average is the lowest since the recession. Meanwhile, the annual average labor force was up 17,700 from 2014, while unemployment claims were down 20,300, which indicates a healthy rate drop.

Unemployment Rate

The region’s year-over-year employment for December grew below the 2015 average. San Diego’s total non-farm employment grew by 37,500 jobs from December 2014 to December 2015—2.7 percent growth. San Diego’s growth rate was again much higher than the 1.9 percent national rate. In total, the San Diego region averaged 3.1 percent annual growth in 2015, compared to only 2.3 percent in 2014. This was the highest annual percent growth rate since 2000, as the region added 41,400, the most jobs added since 1999.

The private sector drove employment growth in 2015, as private employment accounted for 91.7 percent of all employment growth over the year. The total private sector grew by 3.4 percent on average in 2015, out-pacing the private U.S. growth rate of 2.1 percent.

Total Nonfarm Employment

Private growth was driven largely by service providers, but goods producers experienced a particularly strong year. Manufacturers and construction companies drove 15.9 percent of private job growth in 2015, and finished the year strong. The two industries added a combined 6,000 jobs in 2015, the most since 2004. The manufacturing industry in particular added the most jobs and experienced the highest annual percent growth rate since 1998. The boom in the construction market is likely a response to demand pressures in the commercial and residential real estate markets, as quality space is becoming increasingly scarce, according to CBRE MarketView reports. The growth in manufacturing and wholesale trade are putting pressure on the industrial market in particular, as the industrial vacancy rate in Q4 2015 was at the lowest ever recorded.

YoY

Professional, scientific, and technical (PST) services, which is strongly associated with the region’s innovation economy, grew by 6.6 percent in 2015, which was the highest growth rate among major industries in the region (tied with construction). The 2015 growth rate was the highest posted since 2005 in the industry. PST services accounted for more than one fifth of all private annual job growth in San Diego. Comparatively, the national PST sector grew by only 3.6 percent in 2015. Scientific research and development services, a subsector of PST that represents many cleantech and life science companies, grew by 5.2 percent.

Other key drivers for growth included the region’s healthcare sector, which added 7,000 jobs and accounted for roughly one fifth of the region’s private job growth in 2015. Tourism experienced another seasonal hit in December, but the annual average was strong. The industry added 6,500 jobs in 2015, a 3.7 percent growth rate. Growth slowed in the latter half of the year, particularly in food service and drinking places, which was driving higher growth earlier in 2015.

Contributions

With a full year of 2015 data on the books, it was a very positive year for San Diego’s economy. The national economy showed tepid growth throughout the year, while San Diego consistently looked much stronger than the country as a whole. Key industries like manufacturing, construction, health care, and PST services had impressive, and by some measures, record years. While concerns around decreases in federal spending for science and defense will likely thwart some expectations for 2016, other factors like the Department of Defense’s shifting focus toward cybersecurity and national trends toward manufacturing re-shoring could prove promising for San Diego. Given these trends, future outcomes remain largely uncertain, but San Diego’s economy appears well positioned for growth through 2016.

Note: Our Economic Indicators Dashboard will show how our unemployment rate compares to other US metros and the US total rate when that information is released in the coming weeks.

This report was performed with assistance from the CBRE research team in San Diego. 

December 18, 2015

Phil Blair

Download a printable version

“When an influx of people join the labor force and begin seeking employment, you generally see a lag before they find jobs. In October, a substantial amount of people joined the labor force, but reported as unemployed. In November, it appears as though those people found jobs, as we saw no change in the labor force, but a significant reduction in unemployment.”
Phil Blair, Executive Officer
Manpower San Diego


This post is part of an ongoing monthly series dedicated to the California Employment Development Department (EDD) monthly employment release and is brought to you by Manpower. Click images to enlarge in a new tab/window.

Highlights

The California Employment Development Department (EDD) released statewide county employment data today for the November 2015 period. This month’s data indicates that San Diego is showing strong signs of growth in the local economy as we near the end of 2015.

The unemployment rate fell to 4.8 percent in November, down 0.2 points from the previous month. In October, the region experienced a large jump in the labor force without a large jump in employment, which caused the unemployment rate to rise back to 5.0 percent. The labor force stayed virtually the same in November, but higher employment and lower unemployment brought the rate back down to 4.8 percent. The number of unemployed fell by 2,000 from October to November, indicating that the fall in unemployment was healthy and not due to a reduction in the labor force.

The rate is now 1.2 points lower than the previous year and on par with the national unemployment rate at 4.8. The region remains much lower than the statewide unemployment rate of 5.7 percent. The unemployment rate is now expected to end the year in the mid-four percent range in December, resulting in an annual average of about 5.0 percent for 2015, down substantially from the 2014 average of 6.4 percent.

Unemployment Rate

The region’s overall year-over-year employment grew, but below the 2015 average of 3.1 percent. San Diego’s total non-farm employment grew by 37,800 jobs from November 2014 to November 2015—2.7 percent growth. San Diego’s growth rate was again much higher than the 1.9 percent national rate. The San Diego region is still expected to average 3.1 percent annual growth in 2015, compared to only 2.3 percent in 2014.

Year-over-year private sector growth continued to drive the economy, as private employment drove 92.1 percent of all employment growth. The total private sector grew by 3.1 percent, out-pacing the private U.S. growth rate of 2.2 percent. Private growth was driven largely by service providers, but goods producers experienced a particularly strong month. Goods producers like manufacturers and construction companies drove 24.1 percent of annual private job growth. This was due to both strong growth in those industries and uncharacteristically weak growth in service providing industries like professional and business services and trade.

Total Nonfarm Employment

From November 2014 to November 2015, the manufacturing industry added 2,400 jobs—a 2.5 percent growth rate. The ship and boat building industry continued to grow at an outstanding rate of 10.3 percent. Meanwhile, the construction industry added 6,000 jobs and grew by 9.4 percent. Continued growth in goods producing industries remains a positive sign for the region, as these jobs tend to be accessible and pay above the median wage for the region.

Professional, Scientific, and Technical (PST) services, which is strongly associated with the region’s innovation economy, grew by 5.5 percent and was one of the highest growth industries in the region. PST services accounted for roughly one fifth of all private annual job growth in San Diego. The national PST sector grew by only 3.6 percent. Scientific research and development services, a subsector of PST that represents many cleantech and life science companies, grew at a relatively low 3.3 percent compared to previous months.

YoY

Other key drivers for growth included the region’s healthcare sector, which added 8,600 jobs and accounted for roughly one quarter of the region’s private job growth. Tourism experienced a major seasonal hit last month, but rebounded slightly in November. The industry added 1,100 jobs from the previous month and 3,700 overall since last November. The annual growth rate in the industry has slowed in the latter half of the year, but still growing, particularly in food service and drinking places.

November’s employment numbers included more positive signs for the region’s economy, particularly when compared to the year before. The region has 13,200 more people in the labor force, 17,000 fewer unemployed, and has added more than 37,000 jobs. The growth rates have slowed in recent months, which may be a reflection of slowing national trends, an indication of mounting issues in the economy, or a brief blip in an otherwise outstanding year. Annual growth rates have varied throughout the year, but have consistently remained above state and national trends, with growth concentrated in high-tech and high-wage sectors. With one month of data remaining in 2015, all signs point to a solid overall year for the region’s economy.

Contributions

Note: Our Economic Indicators Dashboard will show how our unemployment rate compares to other US metros and the US total rate when that information is released in the coming weeks.