As the pandemic starts to recede, predictions for California’s economic growth are starting to look good. According to the UCLA Anderson Forecast of 2021, “near record growth” is expected with the vaccinations. While “in California, recovery may come later [it] should ultimately be faster than rest of U.S.” This in part has been explained by what California did during the pandemic, imposing more laws such as masks, closures, etc. than other states. UCLA’s Jerry Nickelsburg explains:
“Although the timing may be offset with California beginning a significant recovery later than some other states, we expect the California recovery to ultimately be, once again, faster than the U.S. The more rapid growth we forecast for the U.S. economy — in light of how mass vaccinations have affected pandemic restrictions on economic activity, and taking into account the new stimulus package from Washington — will also lead to a more optimistic California forecast than in December.”
Of course – not unlike other US states – it will be the hospitality and leisure industries that will take the longest to bounce back. This is for two reasons: lack of tourism and the fact that they were hit hardest from the pandemic. But with business, science and tech industries, the recovery will be faster and stronger. This is also due to the fact that there has been a significant increase in the need and desire for new technologies to support the new way of working and indeed living.
Vis-à-vis California’s unemployment numbers Q1 2021 is likely to be at 7.7 percent with a drop in 2022 to 5.1 percent and 2023 to 4.1 percent.
Another factor to be taken into consideration is the impact of California’s 2021-22 budget. More funding than is possible is needed for public health and education, which will mean low-income Californians will lag in recovering economically. The key here is therefore an investment in economic growth drivers which include closing tax loopholes and bolstering revenues over the next few years.