San Diego’s Economic Snapshot: Q2 2021

Every quarter San Diego Regional EDC analyzes key economic indicators that are important to understanding the regional economy and the region’s standing relative to the 25 most populous metropolitan areas in the U.S.

EDC explains San Diego’s Q2 2021 economic data:

Key Findings from Q2 2021:

  1. VENTURE CAPITAL: Investment into Technology companies more than quadrupled. More than $2.4 billion in venture capital went to San Diego Tech companies during Q2, a 433 percent increase from the previous quarter and the first time that Tech received more VC funding than Life Sciences since Q1 2019. Life Sciences funding fell from record levels, but still pulled in more than $1.9 billion during the quarter, more than doubling the amount received in the same quarter last year.
    *Correction: Dollar values for Venture Capital in the preceding paragraph include other sources of funding, such as IPOs, mergers, and Acquisitions.
  2. COMMERCIAL REAL ESTATE: Demand for office space jumps as State lifts lockdowns. Net absorption of office real estate was positive during the quarter, up more than 330,000 square feet, for the first time since Q4 2019 as San Diego businesses began transitioning back to the office. Additionally, Tech companies such as Apple and AppFolio are expanding their San Diego footprint, helping push office vacancy rates down and rent growth back up.
  3. EMPLOYMENT: Job growth returns amid continued battle for talent. San Diego’s Q2 employment reversed the past year’s downward trend as the vaccine rollout led to loosened restrictions on businesses and increased consumer confidence. Year-over-year total nonfarm employment increased by 17,700 in Q2, with Leisure and Hospitality leading the way. However, total employment remains about 100,000 jobs lower than pre-pandemic levels and some key industries, such as Healthcare, are in dire need of more workers.

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