Five years after the Great Recession walloped San Diego County, the region’s economy is on the verge of setting a record strength for productivity.

In 2014, the county’s gross domestic product is expected to surpass $200 billion for the first time, says a study released Monday by the National University System Institute for Policy Research.

The county is projected to produce $206.4 billion in goods and services this year, up 4.3 percent from 2013. The growth has led National University to conclude that San Diego has fully recovered from the severe economic downturn.

“These numbers underscore important changes ongoing in San Diego below the surface,” said Kelly Cunningham, economist at National University. “The region continues to transform from largely defense- and goods-based production to more services and technology-oriented applications for economic activity.”

San Diego’s biotech and engineering sectors have led the local economic growth, creating high-paying jobs and investing in research and development. Over the last 12 months, the professional, scientific and technical services sector has added 8,900 jobs, an increase of 7.2 percent.


“The continued growth of our tech sector and particularly the sciences continues to draw investment and attention to the San Diego,” said Mark Cafferty, chief executive of the San Diego Regional Economic Development Corp.

Even adjusted for inflation, the county’s output would be a record high of $190.2 billion. By that calculation, it marks the first time since 2011 that the region’s economic growth would outpace the state and the nation. The San Diego metropolitan area, the nation’s 17th largest, is outproducing similarly sized regions, such as Denver, Baltimore, Portland and St. Louis, but trailing Seattle, Phoenix, Minneapolis, San Jose and Detroit.

Locally, there are technology positions to be had at leading-edge companies like Qualcomm, Illumina and Thermo Fisher, but getting those hefty paychecks require lots of education and specialized skills. While that growth has created opportunities for those qualified, it hasn’t benefited everyone. The National University report said that areas hit hard during the recession like construction, food services and retail trade still have not recovered.

“It’s almost like a tale of two cities,” Cunningham said. “There are parts of the economy doing very well, and parts of the economy that are still sluggish and not really recovering yet. So that’s where you kind of get this two-tier different kind of impression of how the economy is doing.”

Employment in the field hit perhaps the hardest by the recession, construction, is improving, but is still far below its peak. As of September, the sector had grown by about 10 percent to 68,200 people, a figure about 25,000 below its pre-recession level. Those people have either had to be retrained, leave San Diego, or take lower-paying jobs in fields like retail and tourism.

“It’s a recovery that’s only benefiting people at the top, and it’s making the promise of a growing middle-class economy in San Diego less and less obtainable for many families,” said Richard Barrera, CEO of the San Diego and Imperial Counties Labor Council. “Is the economic recovery going to pull everybody up and in the process lay a foundation for a stronger economy in the future of San Diego? The only way you do that is by investing in infrastructure and investing in education.”

Cafferty said as technology businesses expand locally, more construction jobs should be created. He also sees those businesses creating middle-class jobs, such as those for software coders.

Alan Gin, economist at the University of San Diego, said a healthy gross domestic product doesn’t mean the economy is perfect, but is a good indication of positive things to come.

“Strong GDP growth will translate eventually, we hope, into increased employment and increased income and wealth for everybody,” he said.

When it comes to output, how much a region produces is largely due to job growth, said Esmail Adibi, economist at Chapman University. Over the last year, the county’s unemployment rate has fallen from 7.3 percent to 5.9 percent. And as of February, the county officially recovered all of the jobs it lost during the recession. Gross domestic product is approaching a record because there are more workers than ever before, and demands from them have never been higher.

“We know employers are squeezing more out of existing workers, so it is not a surprise that we are at a historical high,” Adibi said.

Adjusted for inflation to 2009 dollars, the county’s economic output in 2014 would be up 2.2 percent from the $186.1 billion in 2013. In 2013, the local economy slowed to 1.7 percent growth over 2012 largely because of sequestration, the across-the-board federal budget cuts stemming from the political stalemate in Washington, D.C.

“Sequestration had a pretty heavy impact on the economy,” said Cafferty. “There were all kinds of furloughs and cutbacks and reductions of hours.”

National University projects California’s gross domestic product to grow 2.1 percent, and the nation’s at 2 percent in 2014, both adjusted for inflation. San Diego County actually passed its pre-recession peak for gross domestic product in 2012, when it hit $182.95 billion. It bottomed out in 2009 at $173.6 billion, which was down 3.4 percent from 2008’s output.

This article was originally published in the San Diego Union Tribune and can be found HERE.