Way back in 2006 I disagreed with some analysts on the outlook for the Inland Empire in California. I wrote:
As the housing bubble unwinds, housing related employment will fall; and fall dramatically in areas like the Inland Empire. The more an area is dependent on housing, the larger the negative impact on the local economy will be.
So I think some pundits have it backwards: Instead of a strong local economy keeping housing afloat, I think the bursting housing bubble will significantly impact housing dependent local economies.
And sure enough, the economies of housing dependent areas like the Inland Empire were devastated during the housing bust. The good news is the Inland Empire is now recovering.
This graph shows the unemployment rate for the Inland Empire (using MSA: Riverside, San Bernardino, Ontario), and also the number of construction jobs as a per cent of total employment.
The unemployment rate is falling, but still high at 8.9% (down from 15.0% in 2010). And construction employment is still near the lows.
Overall the outlook for the Inland Empire is much better today.