California’s Major Metros Outpace National GDP Growth
The economy remains hot in the San Francisco Bay Area. The region’s gross domestic product grew 5.6% in 2016, three times faster than the national growth rate, according to a report from the Center for Continuing Study of the California Economy. The nationwide growth rate was 1.5%. Sacramento was not far behind the Bay Area and grew 3.1% due to gains in finance and professional services. For the entire state, GDP grew 2.9%. Los Angeles reported a growth rate of 2%. San Diego lagged due to declines in manufacturing and only grew 0.4%.
San Jose was the top metro with 5.9% growth related to growth from the tech sector. San Francisco-Oakland came in second with a 5.4% growth rate related to tech and finance. If it was its own country, the Bay Area’s economy would be the 18th-largest economy next to Turkey and the Netherlands. While the Los Angeles economy grew at a slower pace, the city's economy is larger than the Bay Area with $1.2 trillion in gross state product. The Bay Area’s GSP is about $781B. California’s GSP is worth about $2.5 trillion.
2017 will be a different story. Job growth has slowed in the Bay Area and the state so far this year, but it is rising in the Inland Empire, Butte and San Joaquin Valley counties. The CCSCE expects GDP in the state and many regions to be lower than 2015 and 2016 levels.