After languishing for several years, the Inland Empire economy is starting to look a lot brighter.
That was the optimistic message from Redlands-based economist John Husing, who presented his annual state of the region economic report on Thursday to a crowded banquet hall at the DoubleTree Hilton Hotel in Ontario.
Economic forecasts for Inland Empire job creation for 2013 were far short of the actual 46,833 jobs created in the past year, said Husing, who had predicted 28,300 jobs would be created in the region. The California Employment Development Department had initially predicted only 14,200 jobs would be created in the region in 2013.
Husing told the crowd of business and local leaders that he expected the Inland Empire economy to add another 40,100 jobs this year.
“We are finally starting to get to something that feels like normal,” Husing said.
Major areas of economic growth, Husing said, are expected to be in the health-care and logistics sectors.
The medical sector is poised to take off, Husing said, because of increased demand for services with more people insured because of the Affordable Care Act and the ongoing growth of the region’s population.
The health care sector added 2,975 jobs last year, and 1,350 more this year, according to the Employment Development Department.
Challenges include making sure there are enough medical professionals to meet the new surge for service, officials said.
“There are some challenges in that there is a potential for tremendous growth, but it is a matter of getting the physicians and the nurses and having the providers to care for all of the newly insured,” said Dimitrios Alexiou, regional vice president for the Hospital Association of Southern California’s Inland Empire office in Riverside. “When people have insurance, they tend to use it, so that’s going to be the challenge. There’s an opportunity with growth, but there’s going to be the challenge of meeting that new population’s needs.”
Deborah Freund, president of Claremont Graduate University, spoke to the crowd about the challenges. Freund said federal funding for medical training has been cut to finance the new health care law.
“Finding enough health professionals to treat all of the people that are now insured that weren’t before is going to be one of our major problems,” Freund said.
“One of the things we’re trying to do is move people out of hospitals and manage health care in their homes, in outpatient settings, in doctors’ offices,” she said. “That will reduce the cost but we will still need people to take care of them and we will still need the community college sector to step up to the plate and help with producing very, very needed people to do those things.”
The region serves as the nation’s warehousing and transportation hub for goods moving out of the ports of Los Angeles and Long Beach, and for U.S. exports moving from the east to the ports.
Construction of industrial areas is ongoing, and Husing pointed out a major factor in the growth of the regional logistics industry will be in the wider use of warehouses by major retailers to support consumers’ increasingly using e-commerce.
The region added 8,817 logistics-related jobs in 2013, and an additional 5,850 in early 2014, according to the state Employment Development Department.
Husing also said a major driver of Inland Empire population growth the affordability of homes compared with home prices in other areas of Southern California, such as Los Angeles and Orange counties. The median home price in the Inland Empire, at $260,000, is about $378,000 less than the median in Orange County, and $189,000 less than the median in Los Angeles County.
Steve Ruffner, president of the Southern California division of KB Homes, said home affordability has increasingly become a challenge for prospective buyers because a 29 percent reduction of Federal Housing Agency loan limits for first-time home buyers in San Bernardino and Riverside counties will have a negative impact on the market.
The limit for single-family homes had been up to a $500,000 for the region. The loan limit reduction, announced in mid-December, takes the loan limit down to $355,350. About one-fifth of first-time home buyers in the area had been using FHA loans to pay for their homes.
“In Ontario, and (Rancho) Cucamonga, and Chino and Chino Hills, in order to be affordable, quite honestly, we’re going to have to go to higher density, detached housing,” Ruffner said. “If you go to our Parkside communities, we’re doing very small lot, very high density, singly family detached homes.”
The annual event, attended by hundreds in the business and government community, is sponsored by the Inland Empire Economic Partnership, an economic development organization based in San Bernardino that works with business and government leaders in San Bernardino and Riverside counties.
“We haven’t had positive news in a long time, and I think what Husing is saying is that we’re going to increase job creation and that the economy of the Inland Empire is looking up,” said Paul Granillo, president and CEO of the Inland Empire Economic Partnership. “That’s the message for today.”
