California Economy Update 2017 – State Senator Mike McGuire on October 3, 2017

California Economy Update 2017

California Leading the Nation in Job Growth: In 2016, California led the nation in job creation for the third straight year (2014, 2015 & 2016) (US Bureau of Labor Statistics)

US Job Growth (Dec. 2015 – Dec. 2016)

  1. California: 332,500
    2. Florida: 251,000
    3. Texas: 210,000

California’s Unemployment Rate Continues to Drop: California’s 4.8 percent unemployment rate is at its lowest point in 16 years. (California Employment Development Department)

Multiple Industries Growing in California: Nine of California’s eleven industry sectors added a total of 342,100 jobs in 2016. The largest job gains were in educational and health services, up 80,700 jobs (a 3.2 percent increase), and government, up 61,900 jobs (a 2.5 percent increase). Other sectors adding jobs over the year were construction; trade, transportation and utilities; information; financial activities; professional and business services, and leisure and hospitality. (California Employment Development Department)

California on the Verge of Becoming 5th Largest Economy in the World: In the last three years, California has surpassed Russia, Italy, Brazil and France to become the 6th largest economy in the world. With the UK leaving the EU, economists project that California will surpass Great Brittan to become the 5th largest economy in the world. (Department of Finance)

California Leads the Nation in Virtually Every Manufacturing Metric: California has more manufacturing companies, jobs and output than any other state. There are 36,000 manufacturing companies in California – more than twice as many as the No. 2 state (Texas) which has 17,000. (National Association of Manufacturers)

Manufacturing Workforce is Strong: Manufacturers in California account for 11.3 percent of the total output in the state, employing 7.9 percent of the workforce. In addition, there are 1,281,000 manufacturing employees in California with an average annual compensation of $96,711. (National Association of Manufacturers)

Manufacturing Output Continues to Increase: California’s manufacturing output has steadily risen from approximately $220 billion in 2011 to $278.58 billion in 2015. (National Association of Manufacturers)

Home to Millions of Small Businesses: California is home to approximately 3.7 million small businesses – tops in the nation and representing 12.2 percent growth over the last five years.

California small businesses employed 6.7 million people, or 49.6 percent of the private workforce. (US Small Business Association)

California is the Home of the Biotech Industry: California is the global leader in biotech with the most jobs, companies, patents, and investment of any place in the world. There are 3,040 biotech companies in California, employing 287,000 people and producing $147 billion in annual revenue. (California Life Sciences Association)

California is the Future of the Automotive Industry: The automotive industry in California grew by almost 30 percent between 2011 and 2015. California’s largest manufacturer is an automotive company with over 10,000 employees. In the last four years, over 25 auto companies have expanded or made huge investments in California – many with help from GO- Biz – including: Honda, Ford, Hyundai, Fisker, Tesla, Proterra, Faraday Future, Next EV, Aston Martin, Porsche, Mercedes Benz, Volvo, Chevy, GM, Mazda, and so many more. (CA Employment Development Department)

California’s Economy Then and Now

The transformation of the California economy in the last five years is nothing short of remarkable. Flashback to 2010 before Governor Brown took office and California had a record unemployment rate of 12.4 percent, there was a massive $27 billion budget deficit, we were lagging behind the US in job growth and California had no state office for economic development. Thanks to the leadership of the Governor and the Legislature, California eliminated the budget deficit, built a more than $6 billion budget surplus and California is now leading the nation in job growth.

How Did California Become the Nation’s Economic Leader?

California made significant strides to improve our business climate by cutting red tape, embracing technology in state government and making new investments in economic development and job creation. California now has the largest job creation tax credit program in the US, the largest film tax credit and the largest tourism marketing budget.

Since 2014, GO-Biz has allocated over $492 million to 688 companies that are projected to create over 70,000 jobs and make $14.1 billion in investments. In 2017-18 alone, GO-Biz is allocating over $200 million in tax credits for companies small and large in every corner of California that want to expand and add jobs.

Have Companies Moved to California from Other States?

Despite the rhetoric from our competitors, companies regularly relocate and/or expand in California but you likely didn’t hear about it. For example, in 2016 Cerebain Biotech announced they were moving their US headquarters from Dallas, TX to Costa Mesa because California has a better workforce. Electric bus manufacturer Proterra moved their headquarters and manufacturing facility from South Carolina to Burlingame, CA. Florida virtual reality start-up Magic Leap expanded to California thanks in part to a GO-Biz tax credit. Titan Aerospace moved their manufacturing facility from New Mexico to California and returned a $1 million incentive  package. Most people likely never even heard about these companies because it doesn’t fit the narrative about the Golden State. And General Motors announced plans to add 1,100 autonomous vehicles jobs in California thanks to an $8 million tax credit from GO-Biz.