San Diego's Economic Development Remains Strong
The economic growth of San Diego continues to outperform the region and nation in employment, productivity and development projects in the pipeline.
The city's vital role in aerospace, shipping, defense, tech manufacturing and several other industries has bestowed the San Diego area with fantastic economic diversity and a highly-educated workforce.
What's driving San Diego's economic growth? Here's the blueprint.
Digging into San Diego's Economic Growth
Four industries stand out as the foundation of the greater San Diego area economy, each with thousands of employees; generating city and county tax revenue.
The four pillars of economic development in the San Diego area are:
- International trade – The Port of San Diego is one of the world's busiest and most productive. The port generates $9.2 billion in regional income annually and employs more than 64,000. Revenue includes $372 million in port enterprise, more than $64 million in trade and cargo warehousing and a further $20 million from the cruise ship industry.
- Manufacturing – More than 3,360 manufacturing companies and contractors employ 42,485 in the San Diego area. Over the past decade, new construction developments have focused on expanding and upgrading manufacturing facilities in the area. San Diego's educated workforce and proximity to the Port of San Diego have made the region a manufacturing hot spot.
- The Military – San Diego's defense community includes all four traditional branches of the U.S. military. As much as 20% of the gross regional product (GRP) is generated by defense and defense-related spending, including substantial workforces in healthcare, housing, construction and engineering.
- Tourism – It's more than the San Diego Zoo. With 70 miles of beachfront and perfect weather, millions visit San Diego yearly. In response, the city has invested heavily in hospitality facilities and operations, earning the title of the best city for conferences in the US.
San Diego's Economy By-the-numbers
After a $4 billion year-over-year decline in 2020 during the onset of the COVID-19 pandemic, the San Diego area added more than $11 billion to its GRP in 2021 compared to pre-pandemic totals.
As of 2021/2022, the San Diego area had:
- Jobs – 1.5 million
- GRP (2022) – $266.4 billion
- Median household income: $91,000
- Population: 3.3 million
Economic Headwinds: Labor Participation
San Diego ended 2022 with record-low unemployment levels of 2.9%. While a tight labor market is positive for the labor force, employers struggle to fill positions in skill-intensive fields like life science and technology. For example, the manufacturing sector remains 3,700 jobs below pre-pandemic employment numbers.
Recruiting for manufacturing and construction jobs has been hampered by housing prices. While median housing prices have declined, the city's $850,000 average home price remains a challenge for residents and would-be job-takers. Some employers are actively addressing the problem by building or purchasing more affordable options.
San Diego's Population Growth
San Diego's population is 3.3 million and growing. The city first eclipsed the 3 million mark in 2012 and it’s increased by 8.9% since then, growing faster than the national average (7.4%). The San Diego workforce is highly educated, with 59% of San Diegans holding a bachelor's or master's degree.
Recruiting Needs
New construction developments in San Diego are focused on the city's fastest-growing industry segments, including healthcare, education and technology. Employers like semiconductor manufacturer Qualcomm, Pharma giants Pfizer and Eli Lilly and the US Navy rely on highly-trained professionals. These employers are investing in new and expanded facilities as manufacturing and research is being reshored from overseas.
San Diego's construction forecast is focused on residential housing developments, which should help make living in the area more accessible for new job candidates.
Build Your San Diego Presence with Castle Contracting
Castle Contracting's unique skillset in site development, MEP and trenching services allows owners to start their large-scale civil and commercial construction projects on a solid foundation. See what Castle can do for you: contact our San Diego office today to get started.
