Insight

San Diego Economy Undergoes 'Goldilocks' Recovery from Recession

November 4, 2014

San Diego's economy has fully recovered from the "great recession" with a gross domestic product growing to a projected $206.4 billion by the end of this year -- the highest level ever recorded --  according to an analysis by the National University System Institute for Policy Research.

San Diego
According to revised estimates of metropolitan area gross domestic product (GDP) by the U.S. Bureau of Economic Analysis, San Diego's economy reached $197.9 billion in 2013. Based on recent national and statewide estimates of economic activity, the institute projects San Diego's economy will expand by 4.3 percent by the end of 2014 to $206.4 billion.

Despite San Diego showing overall record levels of economic activity, many sectors remain far from recovery, the institute said. According to BEA figures, information, construction, food services, accommodations, and retail trade have still not recovered. On the other hand, local sectors that have more than recovered and set record levels of activity include professional and business services, real estate and leasing, and health care.

Government and manufacturing sectors in San Diego continually expanded throughout the recession, and only faltered in 2013. The continual growth of these two sectors is largely attributed to large expansion of military and defense expenditures over the past decade. The decrease in the past year resulted from government budget and "sequestration" cuts particularly impacting San Diego.

"These numbers underscore important changes ongoing in San Diego below the surface," says Kelly Cunningham, economist for the institute. "The region continues to transform from largely defense and goods based production to more services and technology oriented applications for economic activity."

According to the institute, San Diego's post-recession recovery appears relatively stable, not as robust as some similarly sized metro areas, but certainly much stronger than others. "Perhaps we can label it a 'Goldilocks' recovery for San Diego -- not too hot and not too cold," said Cunningham.

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