March 28, 2024
Report: Labor constraints slow business activity
RIVERSIDE – (INT) – There is one segment of the region’s economy drawing some concern.

A new report shows business activity in the Inland Empire cooled noticeably in the first quarter of this year.

The new Inland Empire Business Activity Index released quarterly by the UCR School of Business Center for Economic Forecasting and Development, shows a gain of just 0.8% in the region’s business activity in the first quarter, a noticeably slower rate of growth than the first estimate of U.S. GDP (3.2%) for that period.
The tightening of the local labor force is a trend that is occurring across the state but is particularly pronounced in Southern California.

The report says the slowdown has been anticipated, however. “The IE’s business activity did rise, but at a significantly slower pace than what we’ve been accustomed to seeing in recent quarters,” said Robert Kleinhenz, Executive Director of Research at the Center for Economic Forecasting and one of the Index authors. “The slowing is consistent with what we’ve been reporting about sluggish labor force growth across Southern California – and the increasingly serious constraints that places on the ability of the economy to expand, both in the IE and beyond.”

Kleinhenz notes that labor force growth in Los Angeles and Orange Counties has crawled to a standstill while the Inland Empire’s labor force growth has only begun to slow in recent months.
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