Limited Economic Growth
RIVERSIDE (CNS) – Prospects for the Inland Empire economy going into 2026 are nothing to brag about, but the region will continue to realize marginal growth in a few sectors, according to a report released Thursday by the Southern California Association of Governments.
SCAG published its annual “Southern California Economic Update” to rate the previous year’s developments and provide predictions on what may be in store over the ensuing 12 months.
“The logistics sector will face a slowdown if tariffs give rise to weaker trade coming through the ports,” Inland Empire Economic Partnership Chief Economist Manfred Keil, who worked specifically on the IE segment of the Update, said.
“Industries such as agriculture, manufacturing, logistics and construction, which rely heavily on the immigrant workforce, may face labor shortages in the year ahead, limiting growth in these sectors and the overall regional economy,” he said.
According to Keil, performance indicators for 2025 reflected sluggishness throughout the regional economy, and that will be no different for the coming year.
Job creation for new entrants to the labor force will be low, though the construction, healthcare, manufacturing and professional business services sectors will continue to gradually add positions. Overall economic growth was predicted to range between 0.5% and 0.8% in 2026, according to the report.
Along with impacts from disruptions to the labor market from immigration controls, artificial intelligence and workplace automation are now barriers to some employment opportunities available in the past, SCAG said.
Economists, however, cited possible economic boons on the horizon as preparations get into full swing for the 2028 Olympic Summer Games. SCAG further pointed to declining mortgage interest rates as fueling increased real estate activity.
Keil said the Inland Empire has recaptured the jobs lost during the COVID lockdowns and associated regulatory measures that led to many businesses closing permanently, and others downsizing to stay afloat. But he attributed most of the bounce back to growth in healthcare and public sector employment, with other segments of the economy flat or below prior thresholds.
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