CARLSBAD — The city of Carlsbad’s economy grew by $1 billion to $14.6 billion in 2021 after producing the second-largest gross regional product in San Diego County, according to a city staff report presented to the council earlier this month.
The city’s second-quarter growth spurt for the fiscal year 2021-22 (up 7.3% from approximately $13.6 billion in 2020) was attributed to a number of factors, including new jobs, low unemployment (3.4% unemployment rate in December), improved office and industrial vacancy rates, tourism and rising home values.
“This growth was seen across all industry categories and was led by manufacturing, wholesale trade and professional scientific and technical services,” said Matthew Sanford, the city’s economic development manager of Carlsbad, during a Feb. 8 Carlsbad City Council meeting.
According to the city’s report, Carlsbad’s economy grew by $800 million to nearly $13.6 billion in 2019, but “remained flat” in 2020 due to the COVID-19 pandemic.
Last year in Carlsbad, there were 15,418 unique job postings between October and December, an increase of 2,000 postings from the previous quarter, according to the report. The city’s jobless rate has dropped steadily over the past 21 months, from a staggering 13.8% shortly after the onset of the pandemic to its current 3.4% unemployment rate — just slightly above its pre-pandemic unemployment rate of 2.9%.
“Many workplaces extended remote work indefinitely, which is an indicator of continued operational uncertainty for some industries that rely on people being on-site, like manufacturing,” Sanford said. “As with delta, the impact of the omicron surge in San Diego County was blunted, in part by high vaccination rates and continued capacity in the region’s health care system.”
Carlsbad’s economy is largely dependent on manufacturing, hospitality and food services, and professional, scientific and technical services jobs (including innovation industries such as tech, life sciences). According to the report, the city exceeds the national average in these sectors, which are typically more insulated from economic recessions and “represent significant job growth in the economy.”
Additionally, business licenses citywide have returned to normal levels, with a total of 2,415 business licenses issued last quarter, including 1,035 non-residential, 598 residential, and 782 outside-the-city licenses, according to the report.
“Carlsbad actually lost fewer businesses during the pandemic than the 18 months prior to the pandemic,” the report states.
In 2019, the household median income in Carlsbad was $123,409, far exceeding the county’s income levels for the same year at $79,324. The city’s 2019 per capita income was $63,079, more than $20,000 higher than the County of San Diego ($40,238).
Like most cities, Carlsbad’s tourism industry was impacted by a wave of COVID-19 health restrictions that dampened travel and tourism industries around the world. And while the city’s hotel occupancy rate typically declines this time of year (56.9% occupancy rate in December), the occupancy rate is well-ahead of 2020 numbers and just slightly behind pre-pandemic occupancy rates in 2019.
“Tourism leaders speculate the surge in cases caused by the Delta and Omicron variants have continued to impact travel to Carlsbad, but that trends are normalizing,” a report states.
Due to limited housing supply and strong demand, Carlsbad’s home values rose 32% over the past year. In December 2021, Carlsbad’s median house price rose $1.3 million, a 5% gain from the previous quarter.
“This value is seasonally adjusted and only includes the middle price tier of homes,” Sanford said. “The forecast for the next year shows values increasing an additional 21% from today’s prices.”