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.
In this edition of the Economic Snapshot covering Q3 2022, we report on workforce training resulting in positive employment trends, Life Sciences industries attracting Venture Capital, and office and industrial space becoming unoccupied at a faster pace across the San Diego region.
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edc explains the data:
- EMPLOYMENT: San Diego has recovered pandemic-related job losses overall, but some industries still lag. Manufacturing employment remains 6,200 jobs below pre-pandemic level, yet growth in manufacturing jobs far outpaces that of California and the U.S. The region’s unemployment rate dropped 0.1 percent from last quarter to 3.1 percent. Persistent talent shortages have resulted in large sums of public funding for workforce training; as an example, the San Diego Workforce Partnership was recently recently granted $10 million for training in emergency and healthcare services.
- VENTURE CAPITAL: Funding into San Diego cooled off. The region pulled in $1.08 billion in VC funding in Q3, with half ($549 million) going to Life Sciences. The region’s Life Sciences firms lead in VC funding, and increasingly turn to artificial intelligence and machine learning to accelerate scientific advancement. RayzeBio was the largest recipient with $160 million to advance cancer radiopharmaceuticals. On the technology side, Hone, a local startup that provides an online training platform with live instruction aimed at boosting worker retention, raised $29.3 million.
- COMMERCIAL REAL ESTATE: Q3 experienced higher vacancy and lease rates for both office and industrial space. Net absorption of industrial space was negative for the first time since the beginning of the pandemic. However, San Diego is also experiencing strong demand for industrial space—driving up asking rent prices as construction continues to slow. While office space also saw an increase in vacancies, asking rent prices reached a record high of $3.24 per square foot. Higher costs may be the deciding factor for companies considering adopting permanent remote or hybrid work arrangements that reduce their need for office space.