Business activity in the Inland Empire is in clear-cut recovery mode and will reach pre-pandemic levels by the end of this year, according to the new Inland Empire Business Activity Index released today by the UCR School of Business Center for Economic Forecasting and Development. The analysis estimates that business activity in the region will rise between 6% and 10% through the end of 2021. This projection highlights the resilience of the region’s economy as it emerges from one of the most significant downturns in recent history.
“The Inland Empire, and California overall, are primed for growth,” said Taner Osman, research manager at the Center for Forecasting. “The economic fallout the region suffered throughout the pandemic recession, while considerable, has been erased from many parts of the economy; lagging areas, such as the labor market, are not recovering as quickly as we would like but should be boosted by the accelerated rate of vaccinations.”
The analysis points out that in just the first quarter of 2021, business activity increased at an annualized rate of 7% in the Inland Empire. This compares favorably to the 6.4% growth rate in U.S. GDP during the same period, underscoring the Inland Empire’s relative strength. While part of this faster pace is due to the deeper contraction the region experienced during mandated closures, the rebound demonstrates the ability of local industries to adapt and recover as restrictions were lifted.
Sectors such as logistics, distribution, and warehousing have been central to this recovery. The Inland Empire serves as a hub for goods movement across Southern California, and the surge in e-commerce demand has fueled growth in these industries. Consumer spending, which rebounded strongly as households benefited from stimulus payments and improving public health conditions, has also supported business activity. The report suggests that these factors will continue to provide momentum as the year progresses.
Despite these encouraging signs, the region’s labor market remains the weakest part of the recovery. The Inland Empire lost tens of thousands of jobs in early 2020, and while recovery has been steady, it has not been uniform across sectors. To date, the Inland Empire has recovered 67% of the jobs it lost during the historic declines of early 2020. This compares very favorably to neighboring regions, including Los Angeles, where only 36% of lost jobs have returned, and Orange County, which has regained 47%. Except for January, the Inland Empire has experienced consistent employment growth each month of 2021, suggesting that a full rebound is possible within the near term.
More importantly, the Inland Empire’s workforce has now returned to pre-pandemic levels, signaling renewed confidence among both employers and employees. “With the state and region hitting vaccination targets, confidence is rising, and employment growth should pick up quickly,” said Osman. “With California fully reopened, the Inland Empire is expected to continue adding jobs on a faster track.”
Looking ahead, the Inland Empire is expected to remain a key driver of economic growth in Southern California. Its affordable housing, central location, and strong industrial base position it to attract both businesses and residents seeking opportunities in a post-pandemic economy. The Inland Empire Business Activity Index will continue to monitor these trends, offering insight into how the region adapts to ongoing changes in the national and global economy.