National University System Institute for Policy Research

(858) 642-8498 Get Started

San Diego's Economic Recovery Continues to Lag

Latest GDP data indicates San Diego Falling Behind Rest of Nation


Monday, November 21, 2011

View Article

According to preliminary estimates of the nation’s GDP, the U.S. reached a new peak for economic activity in the 3rd quarter of 2011, 15 quarters (or 3+ Years) after the pre-recession peak. National University System Institute for Policy Research projects San Diego and California will not reach a similar recovery milestone until sometime in 2012.

Despite the economic recovery, employment levels throughout the nation, the state, and the region remain far below prerecession peaks.

While economic growth is evident in 2011, the outlook for further recovery is decidedly lackluster.  California’s 2011 GDP growth is estimated to have slowed to 1.2 percent, while San Diego stood slightly higher at 1.4 percent. This compares with estimates of U.S. GDP growing 1.6 percent.  NUSIPR projects a similar discrepancy in growth rates thorough 2012. 

The metro GDP data additionally reveals significant trends in the composition of San Diego’s economic production. “Real estate, rental, and leasing” activities make the largest contribution to San Diego’s GDP. Despite declining by $1.1 billion in annual economic production the past two years, real estate activities continue to account for nearly $1 of every $5 locally generated.

Government contributes the 2nd highest portion of San Diego’s GDP, and has risen significantly over the past decade almost entirely because of increased military spending. “Professional and business services” also continually increased, far outpacing the growth reported by this sector in the rest of the state and nation.

Despite significant losses in manufacturing employment over the past decade, the industry in San Diego continually increased production every year since 2003. This is a result of increasingly high value-added mechanized manufacturing production processes that utilize fewer technically skilled workers. Perhaps most surprising is annual manufacturing production increased $1.9 billion the past two years, the strongest gain of value for any San Diego industry over the past two years.

The primary reason San Diego GDP was not stronger the past two years is significant decline in the “information” industry. This sector alone lost nearly $1.9 billion of annual economic production the past two years.  Construction has also steadily declined since hitting a peak in 2006.  Annual production in this area fell $2.48 billion.

More details of San Diego’s GDP are reported in the November 2011 edition of the “San Diego Economic Ledger” (attached). The report is also available at: ttp://

National University System Institute for Policy Research (NUSIPR) is a non-partisan organization whose goal is to improve the efficiency and effectiveness of the public sector throughout San Diego County. NUSIPR produces high quality policy research papers, economic bulletins, and public opinion polls to help generate debate and discussion among San Diego’s decision makers and citizens alike.