By TR Robertson
Over four hundred business, organization and educational leaders gathered on Tuesday morning, in the new Student Union building ballroom at Cal State San Marcos, to hear a presentation by keynote speaker Charlie Dougherty, Vice President and Economist with Wells Fargo’s Corporate and Investment Bank. The Economic Summit, presented by Wells Fargo, also featured a roundtable discussion after the keynote speaker, with two additional leading economists. After a morning breakfast and meet-and-greet, those attending were welcomed by W. Erik Bruvold, CEO of San Diego North Economic Development Council (SDNEDC). He introduced Cal State San Marcos President Dr. Ellen Neufeldt, CSSM President since 2019. Dr. Neufeldt also welcomed those in attendance and stressed the importance of building stronger ties with North County businesses and organizations as well as the importance of continued collaboration. She said the establishment of CSSM thirty-five years ago was one of the most positive improvements to the North County area. She said the growth of CSSM has been amazing with 4,200 graduates soon to receive diplomas. The college’s ties with the military have been improving with one in nine students affiliated with the military in some way. The college is continuing to grow as shown by the construction now going on which will include a new dorm with 550 beds and a new dining hall. They are also working on a new integrated science and engineering building and have plans underway for many additional improvements.
Mr. Bruvold spoke next saying the economic growth in North County remains strong. He said Innovate 78 partners with cities along the 78 corridor which has been a significant improvement for this economic growth. He said SDNEDC is looking for continued ways to improve growth in the area and encouraged those in attendance to consider going with the group on the Study Tour to Austin, Texas, to look at what is happening in that city that could be studied and brought back to North County. Erik thanked Cal State San Marcos for sponsoring the morning breakfast and thanked Kaiser Permanente and Wells Fargo for sponsoring the 2024 North County Indicator booklet provided for each person attending the morning Economic Summit. A number of civic and governmental attendees from North County cities and county, state and national governmental representatives were introduced. Erik next introduced Brian Murphy, Vice President & Business Growth consultant for Wells Fargo Pacific Region was introduced. Brian spoke about the keynote speaker for the morning summit, Charlie Dougherty.
Mr. Dougherty’s presentation included a number of power point graphs as he spoke about what is happening with North County economic growth and what is going on with local, state and national policies that effect this growth. He said the current said interest rate, of around 3%, is a concern and there is some growing inflation that is picking up and heading in the wrong direction, Charlie indicated the risk of a recession is still around, but he feels we will not be entering a recession. Sectors like manufacturing and home sales are still feeling the effects of high interest rates. Graphs indicating the growing labor market remaining strong were shown. One effect inflation is having is the increase of credit card spending, mainly because inflation is rising faster than income. Dougherty expects consumer spending to slow down and income growth softening.
Another graph showed that there is a slight increase in household net worth and overall inflation is on a path back to 2%. Also of concern is the Federal government being careful about handling reducing interest rates, but higher interest rates are restricting economic activity which makes a recession more possible. Along with this, higher home prices and higher mortgage rates mean less home sales. We are currently in a time of challenging home purchases. Dougherty also said we seem to have a significant over-supply of office space in the area; but there is lots of construction development still underway especially with roads, construction at airports and apartment complexes. Looking at the upcoming national political race, Dougherty feels it a a coin flip as far as the winner. There is some concern in the economic community about the results in the House and Senate races. In looking at the immigration restrictions, he reminded the group that the immigrants do supply a huge part of the supply chain for workers and the current employment rate in California is strong. Another concern is some businesses choosing to move out of California due to a number of issues.
The audience had been asked to submit questions and after Mr. Dougherty’s presentation. Josh Williams, Founder & Principal Researcher of BW Research, and Gary London, Senior Principal of London Moeder Advisors, were introduced to join with Charlie Dougherty for a short question and answer session. When asked about the quality of life and economic growth Williams indicated he feels there are still pockets of economic distress, and we still need to make sure we are providing for economic growth and housing to make sure we are balancing the quality of life for individuals and families. London said things that you don’t expect to happen could always happen. There will always be situations that occur, such as the economic competition with China, restrictions brought on with wars in the Ukraine and Gaza and more. Along with this he said the political scene does scare him. He feels the election could be a traumatic event for the economy and “democracy is on the line”. He said climate change can always have an effect on certain sectors of the economy as well.
For North County we seem to feel we are in a “Goldilocks” market where things are just right, but we have to be careful. London reminded everyone that 31,000 people have moved out of the region. He said a recent study with CEO’s has showed their concerns center around the ability to retain employees, the ability to add to their employment base and housing for their workers. When asked about the effect of the recent wage increases to groups such as healthcare, fast food workers and others, Dougherty said this will put pressure on employers and inflation with price raises in products and possibly a decrease in the number of workers. Josh said he felt it will have different impacts depending on regions and Gary said the wage increases tend to spiral and he feels it will lead to an increase in technology and have an unintended consequence on jobs and prices of goods. When asked about the construction growth, Gary said he feels rental prices have reached a peak point in the area, but he doesn’t see housing prices going down. Charles said he sees a sharp decline in some construction in the next few years but construction activity in certain segments, like manufacturing/business parks, to remain the same. When asked about the Immigration issues and economics, they all agreed the November elections will indicate the direction, but they all said skilled labor immigrants are needed for certain work areas they supply and there is a need for controlling the influx. Asked about the Baby Boomer Retirement, Charles said there will be a “Silver Tsunami” over the next 20 years, but many of those retiring will remain a part of the work force
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A most informative Economic Summit covered a plethora of topics by all of the presenters that left those in attendance with “lots to think about” for their businesses, organizations, cities, and their personal life.
Some interesting facts gather in the 2024 North County Indicator Booklet:
Top 4 Industries:
Vista – Defense & Transportation Tech, Communications & Information Tech, Military & Government, Biomed & Biotech Manufacturing
Carlsbad – Biomed & Biotech Manufacturing, Manufacturing (other), Education, Communications & Information Tech, Business & Admin. Services
San Marcos – Education, Biomed & Biotech Manufacturing, Manufacturing (other), Healthcare, Communications & Information Tech
Oceanside – Military & Government, Tourism & Hospitality, Biotech & Biomed Manufacturing, Manufacturing (other), communications & Information Tech
Escondido – Household Goods & Services, Healthcare, Real Estate, Construction & Development, Education, Communications & Information Tech
The North County Indicator also looked at the cities of Solana Beach, Poway, Encinitas and Del Mar. Other interesting statistics gather indicated when looking at all the cities together showed that 72% of the North County residents drove alone to work; the city with most people working from home was Del Mar (47%); the city with the highest college degree, 4 year education, is Solana Beach; the highest paid occupations are Physicians and Pathologists; the fastest growing occupation is Business Operations Specialists; the city with the highest unemployment rate is Vista at 4.6%. These are but a few of the economic indicators listed in the booklet.
