SCAG Releases 2025 Southern California Economic Update
The “2025 Southern California Economic Update” is now available online. SCAG publishes this annual economic update with a region-wide analysis and specific insight into the economies of Imperial, Los Angeles, Orange, Riverside, San Bernardino, and Ventura counties to assist Southern California policymakers in long-and short-term planning for their communities. The “2025 Southern California Economic Update” reviews the past year and provides an outlook for 2026 and 2027.
Among the report’s biggest takeaways: economic progress in 2025 in the SCAG region has been mixed.
A number of sectors have reported growth: healthcare job demand continues to rise; cargo inflows and outflows are buoyed by stable consumer demand despite tariffs; and technology firms have seen much higher valuations and product orders mostly due to wider adoption of Artificial Intelligence (AI) systems.
However, the region added only 22,000 new jobs in 2025—which, outside of the pandemic, is the lowest job growth since the Great Recession. Combined with the return of modest population growth (regional population was in decline from 2019-2024), unemployment has begun to creep upward.
New housing construction, remarkably stable since the mid-2010s, continued its slowing that began in 2024. However, for-sale inventory in 2025 is more abundant than the previous year. Lower interest rate policy—which began in September and is expected to continue into 2026—should help increase housing inventory and refill the pipeline of new home projects.
While the recent government shutdown means that 1-2 months of economic data is unavailable, SCAG's Economic Roundtable has not observed any factors that could cause major changes to this economic assessment for the remainder of the year.
Economic Impacts of LA28
This year SCAG staff and Roundtable members collaborated on an economic impact analysis of the upcoming 2028 Summer Olympic and Paralympic Games. The LA28 Committee’s $7.15 billion budget, an estimate for visitor spending, and a portion of LA28 Games-related transportation infrastructure investments that have been prioritized or upscaled are expected to have measurable, near-term economic benefits across the region.
Looking Ahead to 2026
In the next year, economic growth is expected to continue in the SCAG region, though job growth is likely to remain very low. The Roundtable predicts a 0.8 percent growth rate in 2026, and the possibility of returning to higher, long-term levels of growth in 2027.
County-Specific Insights
The report also highlights the diversity of the economies of the six counties that make up the SCAG region in 2025:
Imperial County’s economy is beginning to wane compared to last year. The unemployment rate is expected to increase further in 2026 due to shifts in sugar beet production and processing. Imperial County also continues to see major investment in renewable energy and geothermal/lithium extraction projects.
Despite facing a series of severe challenges in 2025—from the devastating Palisades and Eaton wildfires to tariff levels unseen since the Great Depression to aggressive federal immigration enforcement—Los Angeles County’s economy has demonstrated impressive resilience.
Boasting the SCAG region’s lowest seasonally adjusted unemployment rate and second highest increase in building permits, Orange County has maintained a healthy labor market while being a home to a number of highly specialized industry clusters and venture capital investment.
In Riverside and San Bernardino counties, job growth has been slower compared to the past two years. Despite lower housing costs than coastal counties, inflation-adjusted rents rose two percent in Riverside County and 2.7 percent in San Bernardino County. In Riverside County, median incomes in 2024 and taxable sales through the first half of 2025 both dropped slightly, and in San Bernardino County, they both rose slightly.
Ventura County’s economy has seen modest growth in the aftermath of the pandemic, with cities notably more proactive about housing since 2023. The county’s economy is creating jobs but has struggled to generate net-positive economic growth for more than three years.
The “Southern California Economic Update” includes a complete report covering the SCAG region, summary briefs for each of the region’s six counties, and specialists in economic sustainability and economic equity. Full reports for the region's counties will be released following the event.
You can access the report and accompanying materials here. Accompanying materials are available on the SCAG website.
SCAG’s Economic Roundtable
This "2025 Southern California Economic Update” was prepared by SCAG and its Economic Roundtable, a select group of economists from across the region who meet quarterly to discuss trends, data, and current events impacting the region’s economy. The Economic Roundtable provides common, consensus-based understanding of regional economic data, trends, and themes affecting regional planning. The roundtable’s Quarterly Reports can be found on SCAG’s Economic and Demographic page, and all accompanying economic data for the region can be visualized on and exported from the SCAG Economic Trends Tool.