In our quest to keep prospective franchisees, entrepreneurs, and future small business owners apprised of the latest economic indicators in southern California, FranNet of California has collected research from various public and private sources to share. We do this because we understand the importance of making informed decisions about your future, of which a forecast of the leading economic indicators can be a valuable asset. When you’re finally ready to take the proverbial leap of faith and launch a business of your own, you’ll want to be secure in your knowledge of what to expect in our local economies.
Below are updates related to southern California’s employment figures and industry overviews, detailing which business sectors stand to gain the most growth in the next few months.
We begin with some employment news updates, provided by the University of Riverside School of Business and Beacon Economics, LLC. Entitled the “Beacon Economic Report”, it states that the bulk of California’s job gains actually occurred in the southern sector, with Orange County noting the largest increase. Payrolls there increased 1.3%. This was followed by positive employment growth for Los Angeles (+0.5%), Inland Empire (+0.5%), San Diego (+0.3%), and Ventura (+0.2%). “California is getting very close to fully recovering all the jobs it lost due to the pandemic,” said Taner Osman, Research Manager at Beacon Economics and the Center for Economic Forecasting. “In fact, if we repeat this month’s job gains next month, we will reach that milestone.” As a whole, the state of California is experiencing its lowest level of unemployment, going all the way back to 1976.
Growth by Industry
Statistics published by the UCR Center for Economic Forecasting reveals that the healthcare industry is leading the way in expansive growth. As of July 2022 – and going back to the start of the pandemic – payrolls have increased by nearly 17,000, up 2.2%. This was followed by the Leisure and Hospitality industry (+14,900), Professional, Scientific, and Technical Services (+11,200), Administrative (9,300), and Government (+4,500). Only Finance and Insurance
(-1,800) and Other Services (-100) posted negative growth rates.
Additional Factors to Consider
Presenting a balanced view means including both positive and negative updates, so it bears mentioning that the state of California is currently lagging behind in its projected state income tax revenue. And a recent report issued by Redfin throws plenty of cold water on what was recently a red-hot housing market. According to their data, home sales throughout southern California have dropped off of a cliff, falling between 32-28% year-over-year in the three central counties. To be fair, that shouldn’t come as much of a surprise, as homebuyers typically reel in their efforts once the school year begins and mortgage rates are considerably higher now, thanks to the Fed’s rate hikes meant to combat high inflation.
In summation, the economic health of the southern California region remains fairly robust. And if you’re currently considering an entrepreneurial future, consumer confidence in buying products and services is still elevated. This is good news for anyone looking into franchising, as their proven business models and restricted territories of operation rely on those willing to spend their hard-earned discretionary income. If you’d like to find out where the growth in certain franchising sectors lies, we can certainly help you get a good read on the marketplace.
If you’d like to review your options among the nearly 4,000 different franchise concepts in the marketplace today, we can be your personal guide. And meetings with FranNet of California are always no-cost and no-obligation to you. Our role and function is to be your navigator, allowing you to make your own informed decisions on the direction you want to go. Over time, we’ve had the opportunity to work with hundreds of southern California entrepreneurs who ended up owning the business of their dreams – and we can do the same for you. Getting started with FranNet of California is easy, and you can start by booking an introductory session with us by following this link.