California's economy could use some holiday cheer.
Yes, like the country, the state avoided a recession in 2023 despite several challenges, including the Federal Reserve stifling business opportunities with higher interest rates to quell inflation's vicious battle.
In fact, the growth of the state economy was 3.4%, Measured by GDP in the first half of 2023, may seem surprising, all things considered. But let's remember that 11 states fared better.
So, what will it take for California to rekindle its once-nation-leading, eye-popping growth? After all, substantial but dull is not a great mission statement.
Here is an economic gift list for California. Below are 12 business imperatives for the year ahead – complete with a sprinkling of reliable spreadsheet input on why each faces challenges.
More visitors: In 2022, 1.2% of California residents moved from other states—the worst attrition rate in the nation. California's population as of 2016. Until someone develops a „here to go” mindset, the state's body count will wither.
Additional Children: The 10.5 California births per 1,000 residents in the year ending July 2023 was the lowest number since 1906 and 34% below the 123-year average. Another demographic hurdle: The state's aging population and young adults are confused about how to afford California life
Deep discounts: California consumer prices rose 3.2% in the year ending in October, according to the state Department of Finance. This is well below June 2022's 8.3% inflation, but not the 2015-2019 average of 2.7%. Life in California wasn't good enough until the recent burst of inflation made balancing the budget even trickier. Desperate for home price reductions?
Also produce: California accounted for 10.2% of US factory jobs in October, the lowest share in 27 years. Manufacturing is another victim of the state's high cost of doing business. Unfortunately, there are some simple fixes. That's pretty bad considering these jobs pay an average of $29 an hour. And we will note that this is a national headache.
Arrival of Foreign Tourists: 16% lower international travel costs in California vs. Pre-infectious conditions, According to Visit California. Overall tourism dollars are up just 2% from 2019. Making America friendlier to foreigners will surely help the state's huge tourist trade.
Biggest Hits: $9 billion will be spent at the US box office on movies this year, keeping ticket sales on pace for 2005-06. Hollywood's economic drama — including some high-profile labor unrest — will require a lot of innovation as more consumers choose their couch for an expensive theater seat.
Intensive house building: 5.2 California building permits per 10,000 people In the third quarter, new residential units equaled the 20-year construction pace. There is little evidence of any major housing construction stimulus to help ease the state's affordability pressures.
Boosts morale: A 4% one-year drop in California consumer confidence for 2023 left the Conference Board's index at a seven-year low, minus the coronavirus-chilled 2020.
Rainy days: That's 19% less precipitation than July this year, measuring the average precipitation seen at 52 California sites monitored by Golden Gate Weather. The good news starting point: 4% of California is in drought. 100% a year ago and 62% on average since 2000.
Actual hikes: The average hourly wage in California is $38 an hour, but that's only 1.4% per year. It's been nine years since pay rises have been small — a strange austerity for employers when workers often worry about challenges.
Shopping Sprees: Retail sales in California were down 1.6%, minus inflation, for the year ended August – The decline we have seen in 15 months out of the last 16 months. This is what you get when high inflation and small hikes collide and reduce consumer purchasing power. This is a major cause of low confidence.
More workers: 18.5 million Californians say they have a job – Same staffing level as five years ago. I don't know why the development stopped. Is it a holiday wave? Or are workers leaving the state? Or do some Californians view work as a poor financial option when considering the cost of travel, childcare, clothing, etc.?
Jonathan Lansner is a business columnist for the Southern California News Group. He can be reached at [email protected]
„Oddany rozwiązywacz problemów. Przyjazny hipsterom praktykant bekonu. Miłośnik kawy. Nieuleczalny introwertyk. Student.