State of the Region: Looking back and into the future in the Inland Empire

By Manfred W. Keil|Inland Empire Economic Partnership

The Inland Empire Economic Partnership held its yearly State of the Region event March 30 at the Ontario Convention Center. Here are the highlights of the financial report.

Here is what the sunlight scenario looks like: the economy of the Inland Empire is unseasonably hot, however the temperature has actually dropped slightly and just recently to listed below normal. With nearly 75,000 more nonfarm positions compared to the period before the pandemic, jobs in the Inland Empire are 6% ahead of pre-pandemic levels. One-third of all California jobs developed since February 2020 are located in the Inland Empire.

As always, the essential concern for understanding a phenomenon is not the "what" but the "why.".

Nearly three-quarters of the freshly produced jobs (55,000 of 75,000) were in this sector as individuals and firms relied heavily on online shopping during the pandemic, sustaining its increase. The region also accounted for 60% of all Golden State tasks developed in that industry.

There are storms on the horizon.

Is the nationwide storm. We anticipate that the U.S. will get in a recession within a year.

Volcanologists place sensing units around numerous locations of the volcano. Economists do the exact same: we have signs that will sound an alarm bell before the economic crisis gets here. There is no claim that these sensors "trigger" the outbreak; instead they can forecast it. All of our sensing units are sounding an alarm bell at the minute: the yield curve (Government 10-Year Bonds minus the 30-Day Treasury Bill) has been inverted considering that October; real estate starts are down over the previous year; the average weekly hours operated in production are decreasing; customer self-confidence has struck rock bottom; and the unemployment rate has actually been at a really low level over the in 2015. Seasonally changed joblessness rates for the Inland Empire have actually increased because last summer season, which is threatening, because of the "very first in, last out" label of organization cycles in our location.

Other indicators, which we do not pay much attention to in our projection, such as the Index of Leading Economic Indicators by the Conference Board, also strongly hint at an impending economic downturn. Contribute to that the current banking failures and the work interruptions at the seaports and the outlook is not positive.

To be reasonable, there are some forecasters who will tell you otherwise, however we are rather confident in forecasting the slump. Of course, forecasting the eruption of the volcano does not inform you the severity of the surge - - and we feel that probably a nationwide recession will be relatively moderate by historical requirements.

Next, the fourth commercial transformation (automation, robotics, expert system) will have a major influence on the Inland Empire. As the expenses of robotics continue to fall and managers are becoming more familiar with the lower adoption expenses, capital-labor alternative will accelerate in the logistics market: its output will broaden but with significantly fewer workers required to do so. It is time to plan ahead, possibly by developing a logistics center that will put the Inland Empire at the leading edge of technological advances in the market, and consequently create tasks in the market that will last through the next phase of innovation.

We have created a lot of jobs in our location however these are normally not with better paying industries such as Professional and Business services, or Information Technology. To turn this around, we are advocating for policies that attract better paying jobs into the Inland Empire - - this would resolve problems such as the 35% of its labor force travelling into the seaside locations. This, in itself, would decrease pollution, and enhance the standard of living. One way to accomplish this is through increasing the variety of workers with college education in the area - - currently just about 25% of Inland Empire residents have a bachelor's degree or higher - - while in Phoenix, for example, over 35% do. Simply counting on work gains will not treat the problem.

In the end, we are alerting Inland Empire citizens to be prepared for a moderate economic crisis, to consider properly the costs and benefits of the logistics market, to be concerned about technological development and its influence on the area, and to discover ways to bring in higher value added industries.

Manfred W. Keil is primary economist, Inland Empire Economic Partnership, and associate director, Lowe Institute of Political Economy, Robert Day School of Economics and Finance, Claremont McKenna College.

The Inland Empire Economic Partnership's objective is to help develop a regional voice for organization and quality of life in Riverside and San Bernardino counties. Its membership consists of companies in the private and public sector.