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HomeMy WebLinkAbout2026-07-21; Economic Development Subcommittee; 04; San Diego County Regional & Global Economic TrendsMeeting Date: July 21, 2026 To: Economic Development Subcommittee From: Tess Sangster, Economic Development Director Staff Contact: Tess Sangster, Economic Development Director Tess.sangster@carlsbadca.gov, 760-607-2923 Subject: Recommended Action Receive an informational report from the San Diego Regional Economic Development Corporation on the San Diego regional economy and global market trends, discuss and provide feedback. Executive Summary San Diego Regional Economic Development Corporation (SDREDC) will provide an update on regional industry and global trends that impact the San Diego regional economy. Explanation and Analysis Understanding and anticipating trends in the San Diego regional economy is essential for effective economic development planning and long-term competitiveness. As one of the most dynamic and innovation-driven economies in the nation, the San Diego region is influenced by shifts in industry growth, workforce availability, capital investment, technology adoption, and global market conditions. By staying informed on these trends, staff can proactively align resources, strengthen strategic partnerships, and identify opportunities that support business attraction, retention, and expansion. The San Diego regional economy serves as a major driver of prosperity for Carlsbad and North County, with strong concentrations in industries such as life sciences, technology, defense, advanced manufacturing, tourism, and clean technology. Regional economic activity, investment patterns, and workforce trends directly impact local businesses and influence decisions related to site selection, expansion, and talent recruitment. Recognizing that Carlsbad’s economy is deeply interconnected with the broader San Diego region, understanding regional economic dynamics allows us to better support employers, identify emerging opportunities, and position the city to remain competitive in an evolving marketplace. This item will provide an overview of the San Diego regional economy, including key economic indicators, industry trends, workforce conditions, and emerging opportunities to advance our growth. Insights shared will help inform economic development strategies, business support initiatives, and regional collaboration efforts. By maintaining a strong understanding of the broader economic landscape, we can ensure that Carlsbad continues to foster a resilient, innovative, and business-friendly environment that supports long-term economic prosperity. ECONOMIC DEVELOPMENT SUBCOMMITTEE July 21, 2026 Item #4 Page 1 of 2 Fiscal Analysis This action has no financial impact. Next Steps Staff will continue to collaborate with the SDREDC and other regional partners to monitor industry trends, workforce dynamics, and global economic conditions impacting Carlsbad and the broader San Diego region. Findings from this presentation will inform ongoing economic development initiatives and regional engagement strategies. Exhibits None July 21, 2026 Item #4 Page 2 of 2 San Diego Economic Update City of Carlsbad Eduardo Velasquez July 21, 2026 Vice President How we do it •Focus on quality jobs, skilled talent, and thriving households •Work with and through 150+ companies and investors •Lead programs and initiatives that are demand- driven, employer-led, and outcomes-based. Regionally focused. Globally competitive.2 EDCmobilizes business, government and civic leaders around an inclusive economic development strategy to maximize economic prosperity and global competitiveness 3 Regional Snapshot Carlsbad Snapshot Sources: CA EDD (June 2026), CAR (June 2026), CBRE (Q2 2026), U.S. Census (2024) Office vacancy Home price appreciation (Y/Y) Unemployment rate 13.8% 5.9% 4.4% $106K Median Household Income Office vacancy Home price appreciation (Y/Y) Unemployment rate 16.3% 1.4% 4.1% $143K Median Household Income Recent job growth is weak & concentrated in lower wage sectors Healthcare sector is masking a job declines in nearly every other sector $46K $81K $138K $104K $102K$147K $78K $108K -30,000 -20,000 -10,000 0 10,000 20,000 30,000 40,000 Jo b s , y e a r -ag o c h a n g e Mining, Logging, and Construction Manufacturing Trade, Transportation, Warehousing, and Utilities Information, Financial Activities, and Other Services Professional and Business Services Health Services Leisure and Hospitality Government Total non-farm Sources: CA EDD (June 2026); Lightcast (2025). Small businesses are the backbone of our economy 5 The wage gap between the smallest and largest firms has widened 60% of total employment 18% lower avg. wages relative to regional avg. 99% of total businesses Source: CA EDD (2025) -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% Di f f e r e n c e i n c o m p e n s a t i o n f r o m t h e r e g i o n a l av e r a g e 2017 2025 Business churn is up Business starts and exits have rebounded and exceed pre-pandemic levels 6 46K new businesses in 2025 Source: CA EDD (2025), U.S. Census Bureau Business Formation Statistics (2025) 43K businesses closed or relocated in 2025 20,000 25,000 30,000 35,000 40,000 45,000 50,000 2018 2019 2020 2021 2022 2023 2024 2025 Business exits nearly erased new starts New businesses Business exit/relocations The workforce of tomorrow looks different than today’s 7 The workforce of tomorrow looks different than today’s Source: CA Department of Education (2024), Cal Pass Plus (2024), Lightcast (2024) 64% of high school dropouts are Hispanic and Latinx 21% of students completing their post-secondary education are Hispanic and Latinx Demand for degrees and credentials is accelerating 8 J obs requiring BA+ have grown 5X faster than those requiring a high school diploma Source: Lightcast (2017-2024) 25% 36% 2% 5% 2% 29% 22% 35% 2% 6% 2% 32% 0%5%10%15%20%25%30%35%40%45%50% No formal educational credential High school diploma or equivalent Some college, no degree Postsecondary nondegree award Associate's degree Bachelor's degree and up Job concentration by educational requirement Proportion of all jobs in 2017 Proportion of all jobs in 2024 Cost of living is a talent retention challenge Three-in-four people leaving San Diego cite high cost of living as the reason -20% -10% 0% 10% 20% 30% 40% 50% 2018 2019 2020 2021 2022 2023 2024 Household income growth has outpaced housing costs, but the gap is shrinking Average homeowner monthly housing costs Average renter monthly housing costs Median household income 65 % increase in transportation costs since 2017 $982 monthly cost for childcare Source: U.S. Census ACS (2024), Center for Women’s Welfare (2024); COLI (2018-2024), SANDAG (Dec. 2024) Homeownership remains unreachable for most 10 One in nine households in San Diego cannot afford the median price home -20% 0% 20% 40% 60% 80% 100% 2018 2019 2020 2021 2022 2023 2024 New homeowner monthly costs have almost doubled since 2018 Current homeowner monthly costs Monthly market costs for a new homeowner Source: COLI (2024), Zillow (2024) TOURISM 31.8M Early-stage innovation has driven decades of prosperity and growth San Diego is a research and development hub 11 #1 #2 largest concentration of U.S. military assets 1 annual visitors 2 most patent intensive U.S. region 3 MILITARY INNOVATION #3 U.S. life sciences cluster 4 1 SDMAC, 2020 2 SDTA, 2023 3 WIPO, 2024 4 JLL, 2024 Military 148,932 10% Innovation 155,709 10% Tourism 210,354 13% Education (including Higher Ed) 144,133 9%Healthcare 164973 10% Locally-serving 797,104 49% San Diego employment breakdown, 2025 "Locally-serving" includes Finance, Real Estate, Insurance, Professional, Information, Construction, Social Assistance, Government, Transportation, Utilities, Manufacturing, Retail, Wholesale Trade, and Other Services. Our economy is at an inflection point Each innovation job supports another two in the economy Source: SDREDC Traded Clusters (2025) -15,000 -10,000 -5,000 0 5,000 10,000 15,000 2018 2019 2020 2021 2022 2023 2024 2025 Jo b s , y e a r -ag o c h a n g e Innovation job growth drivers are in reverse Aerospace Cleantech Life Sciences Tech Manufacturing New business dynamism are a few years of declines Entrepreneurship tends to rise during periods of weak job growth Source: SDREDC Traded Clusters (2025) -200 0 200 400 600 800 1,000 2018 2019 2020 2021 2022 2023 2024 2025 Fi r m s , y e a r -ag o c h a n g e Business formation resumed but far below pre-pandemic highs Aerospace Cleantech Life Sciences Tech Manufacturing Companies are doing more with less people AI may be responsible, in part, but remote work has also been a boost Source: SDREDC Traded Clusters (2025) -5% 0% 5% 10% 15% 20% 25% 2017 2018 2019 2020 2021 2022 2023 2024 2025Av g . w a g e s c u m u l a t i v e g r o w t h Productivity has surged Aerospace Cleantech Life Sciences Tech Manufacturing Regulatory and permitting support 15 Marketing and visibility How we can help Regionally focused. Globally competitive. Talent pipeline development Expansion services and site selection Economic incentive consulting Intelligence and research Strategic partnerships Export/logistics consulting Market strategy Inbound investment support SDREDC business services Connect with us on social @ SDregionalEDC and visit our website sandiegobusiness.org Thank you! ©2026 San Diego Regional Economic Development Corporation