Orange County has the lowest unemployment rate in Southern California. According to a recent report from JLL, Orange County has a 2.5% unemployment rate, compared to 4.4% in Los Angeles and 2.8% in San Diego. Next year, however, job growth in the market will likely begin to plateau as job counts reach record levels.
"Growth in employment will remain steady, at or around current levels mainly because of the labor constraints that we have in the market," Paulina Torres, research analyst at JLL, tells GlobeSt.com. "We continue to have one of the lowest unemployment rates in the nation and are already significantly pulling labor from surrounding counties."
Orange County doesn't only lead employment numbers; it is also the regional leader for wage growth, according to the same study. "We definitely expect income levels to remain strong simply because Orange County has historically had a higher income base that's a major portion of who lives and works here," says Torres. "Because a shift in the quantity of high paying jobs that were concentrated in financial services before the recession, has since been spread to tech and life sciences, the Orange County market has managed to hold a constant level of high paying jobs."
That wage growth, however, has helped to drag employment growth in the same category. "This has not allowed it to experience the growth in this job category that the Silicon Valley has experienced, for example," says Torres. "To experience significant wage growth in the entire county, it needs to work to attract high value-add companies those specialized in computer systems, electronic products and scientific R&D. In the last three years, in fact, the Silicon Valley has experienced 12% growth in this sector while Orange County's growth just hovered around 1%."
Still, the low unemployment rate in Orange County has translated to healthy leasing activity. "A lot of the new occupations are for high value-add companies. As these companies grow within/enter the market, their increased demand pushes higher rents," says Torres. "Since 2010, 95,200 office-using jobs have been added to the local market. Moreover, these industries have created intense demand for creative office space. A significant amount of the office leasing activity has occurred in creative office buildings, which are typically occupied by, if not by tech, other creative office users, which has spurred a lot of landlords to invest in creative conversions for their properties."
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Kelsi Maree Borland
