IE11 Not Supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Tech Will Help Fuel State’s Post-COVID Economic Recovery, Study Says

“Tech has not been in free fall,” economist Jerry Nickelsburg writes. “Indeed, its profitability has grown, and tech equities are the star performers.”

Following is an excerpt from a longer Los Angeles Times article assessing the state’s and the nation’s economic recovery after COVID-19. The full article is available here.

The economies of California and the nation will experience near-record growth this year, thanks to widespread vaccinations for COVID-19 and massive federal relief for struggling workers and businesses, UCLA forecasters predict.

“A waning pandemic combined with fiscal relief means a strong year of growth in 2021 — one of the strongest years of growth in the last 60 years — followed by sustained higher growth rates in 2022 and 2023,” according to the quarterly economic outlook released Wednesday.

California, buoyed by high-earning technology and professional sectors that shifted to at-home work during the pandemic, will recover somewhat faster than the U.S., even though a full rebound in the tourist-dependent leisure and hospitality businesses will lag.

“This is a very ‘good news’ forecast,” said Leo Feler, senior economist of the forecasting group based at UCLA’s Anderson School of Management. “We have finally turned the corner.”

California has suffered a higher unemployment rate than the nation in part because of stringent pandemic restrictions that shut businesses and schools. In the last quarter of 2020, the state’s jobless rate was 8.4 percent compared with 6.7 percent nationwide. Economists Leila Bengali and Jerry Nickelsburg, authors of the California section of the forecast, predict Golden State unemployment will average 6.8 percent in 2021, 5.1 percent in 2022, and 4.1 percent in 2023 — still above the pre-pandemic level of 3.9 percent. Golden State payrolls, which shrank 7 percent in 2020, will expand by 4.1 percent this year to more than 16.87 million, they estimate. That’s faster than the U.S. rate of 3.6 percent.

California jobs will grow by 3.1 percent and 2.3 percent the following years, according to the forecast.

“The state’s technology and logistics sectors, two sectors expected to lead the recovery, are proportionately larger than the U.S. average,” Nickelsburg said, adding that state government revenues are healthy, construction is reviving and cargo is pouring into California ports.

“Tech has not been in free fall,” Nickelsburg writes. “Indeed, its profitability has grown, and tech equities are the star performers. ...  A generation of talented (Generation) Zs ... are waiting to take their place inside the Bay.”

(c)2021 The Los Angeles Times. Distributed by Tribune Content Agency, LLC.