Bankruptcy? So what? Stockton’s economic output grows in 2012

Contrary to popular belief, the Stockton economy is growing, albeit at a slower pace than the national average. On Tuesday, the Bureau of Economic Analysis—a subset of the US Department of Commerce—released GDP information for all of the nation’s 381 metropolitan areas. Despite high crime rates and bankruptcy looming over the city, Stockton’s 2012 Gross Domestic Product (GDP) grew at a modest 1.7% over the past year. While this is below the national average of 2.5%, Stockton’s growth is welcome news as the previous two years saw contractions in the region’s economic output.  

When compared to the Central Valley’s other metro areas, Stockton ranks somewhere in the middle. The valley is bookended by high-growth areas like Bakersfield (5.9%)—whose growth can be mostly attributed to natural resources (i.e. oil, natural gas)– and Sacramento (3.2%). Here’s a full comparison.

 

Metro

region

Total 2012 GDP in millions

(2005 dollars)

National rank

% Change from 2011

National rank

Sacramento

84,281

33

3.2%

80

Stockton

17,204

109

1.7%

184

Modesto

13,423

130

1.7%

177

Fresno

26,735

75

0.6%

276

Bakersfield

28,492

69

5.9%

14

There is no single industry in particular that is leading the way in Stockton, which is not necessarily a bad thing. Regions that are buoyed by just one or two specific types of industry run the risk of collapsing once that industry leaves town to head overseas (i.e. manufacturing) or natural resources dry up (i.e. oil and natural gas). The region’s fastest-growing industries were trade (.63%), Transportation and Utilities (.40%), Financial Activities (.34%) and Information (.19%). If you are interested in a national breakdown of GDP across metro regions, here is a nice summary.

Trade was Stockton’s fastest growing industry in 2012 (photo via Bay Crossings)

There are two ways to look at this information. For Stockton to really recover, this growth has to be expanded. The region still lags well behind others in California, particularly in the Bay Area. However, we can be cautiously optimistic that Stockton’s economy is trending in the right direction. 1.7% growth is nothing to write home about, but it’s certainly better than contraction. Our growth shows that we are in much better shape than other cities of similar size which continue to see a drop in GDP.

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Categories: Community Commentary

Author:David A. Garcia

David A. Garcia founded SCL in March of 2012. He holds degrees from UCLA as well as Johns Hopkins University and currently works as the Chief Operating Officer at Ten Space in Downtown Stockton, and previously worked as a researcher/analyst for a congressional agency in Washington DC. The views expressed here are solely of the author.

One Comment on “Bankruptcy? So what? Stockton’s economic output grows in 2012”

  1. Jon Seisa
    September 19, 2013 at 1:26 pm #

    Good news is good news no matter how modest. We’ll take it.

    But how timely, Forbes Magazine (online) just published a very fascinating article, “A Map Of America’s Future: Where Growth Will Be Over The Next Decade,” that projects vibrant decadal (2013-2023) economic growth and industry/market demographic analysis of the U.S. divided into 7 economic regions and 3 major city-states (LA, NY, Miami).

    Notice how Stockton (and the Central Valley) is on the border between the Left Coast Eco-Demographic Region and the most rapidly growing sector, the Inland West Eco-Demographic Region. The Left Coast sector will have a projected $0.4 Trillion GDP decadal growth increase, and a 12.2% projected collective job growth rate, while the highly robust Inland West sector will have a projected $0.5 Trillion GDP decadal growth increase, and a 14.6% projected collective job growth rate.

    In other words, logistically, Stockton is positioned to access and network the best of both these worlds (but just doesn’t know it, yet).

    The projected growth industries and expanding markets will be:

    LEFT COAST (Capital City San Francisco)
    1. Technology & Software
    2. Healthcare
    3. Manufacturing

    INLAND WEST (Capital City Denver)
    1. Energy
    2. Technology & Software
    3. Business Services
    4. Tourism
    5. Education

    Additionally, under the current 2013 “Key Industries” Stockton has a connective commonality of Agriculture with the Inland West, but also is additively strengthened with the key industry of Trade, due to the Port of Stockton and exports to the Pan Pacific Nations. Furthermore, Stockton’s proximity to technology development (Silicon Valley)can create a combined economic synergy between these 3 drivers if Stockton, in my analysis, grasps the vision of positioning itself as a major Western US hub and conduit for agri-tech research and development, interfacing with the 11 Western States (west of the Rockies) per a premiere regional agri-tech alliance or NGO, and via establishing agri-tech institutes, high-tech agri-labs and feature annual domestic and international, as well as ongoing state-regional, agri-tech trade expos, conferences and information exchange. This consolidated marriage between the high-tech of Silicon Valley and agribusiness and hosted in the setting of the Great Central Valley for the Inland West Region could make for some great and positive growth and economic dynamics for Stockton.

    This analysis also appears to confirm and substantiate previous observations I made on Stockton’s emerging position as a major healthcare hub primed for a biomedical institute, research and lab-tech nucleus. The city/county needs to start mobilizing and strategizing on these 2 major fronts in a big way, aggressively, to catch the crest of this next decadal wave.

    ANALYSIS MAP – “AMERICA’S NEXT DECADE”: http://images.forbes.com/special-report/2013/assets/gate.jpg

    FORBES ARTICLE – “A Map Of America’s Future: Where Growth Will Be Over The Next Decade”: http://www.forbes.com/sites/joelkotkin/2013/09/04/a-map-of-americas-future-where-growth-will-be-over-the-next-decade/

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