Growth Across CA & NV Varies Greatly Coming Out of COVID

Robert Eyler, credit union economist, board member, and professor of economics at Sonoma State University
Robert Eyler, credit union economist, board member, and professor of economics at Sonoma State University

An important economic update provided to the California and Nevada Credit Union Leagues this week revealed how various regions within both states are recovering uniquely and in-line with local worker, household, business, and labor market demographic trends.

You can view Dr. Robert Eyler’s slide presentation here. During the Leagues’ bi-monthly “CEO Call,” he discussed the continued economic outlook for this year, potential future inflation trends (2022 - 2025), current Federal Reserve short-term rate policy, credit union member and employee impacts, and local jobs/labor and housing market considerations.

Eyler — who is a contract economist for the Leagues, long-time economics professor at Sonoma State University, and a 10-year board member of Redwood CU — noted the following:

  • San Diego Region: Although this local economy continues growing, the COVID-19 pandemic’s major hit to the leisure/hospitality and tourism industries means that this overall sector’s vibrancy and health will linger compared to other sectors. Also, 2022 will show whether there are key structural changes to the local economy (housing, workers, and local businesses).
  • Los Angeles Region: A slow economic recovery persists, especially within the tourism, restaurant, and retail industries. This is a key drag on the entire state since the Los Angeles area consists of about 30 percent of California’s economic activity. Brighter days are ahead but are unfortunately arriving at a much slower pace than hoped.
  • Bay Area Region: This region is getting closer to achieving full economic recovery coming out of the COVID-19 pandemic. However, the big question locally is commercial real estate and office use (will it ever be the same?), and whether a “return to the vibrant urban core” is in store for downtown businesses. Many households have migrated to the suburbs or exurbs.
  • Sacramento and Northern California Regions: These areas have achieved full economic recovery and are now expanding beyond their pre-pandemic trajectories.
  • Central Valley and Inland Empire Regions: The economic recovery is in full swing, but the lack of worker availability is slowing this growth for now.
  • Reno/Sparks Region: Construction of new homes and commercial space continues in full force, as well as industry/economic diversification (a pre-pandemic trend). However, the cost of living is rising quickly for households (especially housing costs), and there are local business price pressures when it comes to worker wages and increases.
  • Las Vegas Region: This area is bifurcated (think somewhat the Los Angeles, CA region mixed with the Reno/Sparks, NV region). Economic diversification is providing positive opportunities, but the area still heavily relies on tourism. Many businesses and households are still struggling.

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