Report: California regional economic outlook

Scott Anderson
Posted by Scott Anderson
Chief Economist

California’s robust expansion continued in 2014 with improving labor market conditions, rising personal incomes, a strong housing sector recovery, and a well-balanced state budget.

Graph showing jobs growth in CA by sector during 2014Nonfarm payrolls in California grew faster than the national average during the last three years, surpassing the state’s pre-Great Recession peak by 194,100 jobs in December 2014. The state added 320,300 nonfarm payroll jobs during the last 12 months, growing 2.1%. The state unemployment rate in December dropped significantly to 7.0% from 8.3% a year ago, but still remains elevated compared to national unemployment of 5.6% for the same period.

We expect California’s labor market to continue its momentum, growing at an accelerated 2.4% in 2015 and 2.2% in 2016, adding nearly 730,000 new jobs in the state by 2017. Over 70% of those jobs will be created in professional & business services, education & health, leisure & hospitality, and construction sectors.

The Bay Area is expected to grow faster than other regions of California over the next couple of years due to its robust technology sector and large share of high-skilled technical workers.

The downside risks for California include a possible decline in investment activity in the Bay Area and decrease in agricultural and related products production and exports due to exceptional drought in the agriculture-intensive Central Valley. Weak demand from the rest of the world and a strong dollar could also slow the growth of California’s export-oriented economy. Conversely, an improving labor market, rising wealth, and increasing retail sales could fuel stronger-than-expected economic growth in California.

Check out the latest California Regional Economic Outlook report to learn more about how various regions of California compare.

Reminder: All comments are moderated prior to publication and must follow our Community Guidelines.

  • Anonymous says:

    Thank you for posting this article. This is valuable information as we educate our students about career pathways. Our faculty certainly benefit, too!!

    Reply | 5 years ago
  • Anonymous says:

    You must be on heroin I see zero growth to flat job growth now if you add in that most corporations have scaled back hourly workers to below 40 hours and then doubled their workforce it may look that way to you, I was just in Hope Depot today being Saturday and you could drive a Mac Truck through it. In fact there was more employees then customers. This all concurred with the turn down on the last quarter of 2014 to 2.2% grown rate a turn down of 3% from the previous quarter of 5.2. Now add this to a destructive administration and the thought of 2 more years

    Reply | 5 years ago

Submit an Idea

[contact-form-7 id="32" title="Share An Idea"]

You are leaving the Bank of the West Change Matters site. Please be aware: The website you are about to enter is not operated by Bank of the West. Bank of the West does not endorse the content of this website and makes no warranty as to the accuracy of content or functionality of this website. The privacy and security policies of the site may differ from those practiced by Bank of the West. To proceed to this website, click OK, or hit Cancel to remain on the Bank of the West Change Matters site.