Slowed job growth drags down San Diego's 2025 economic ranking
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San Diego dropped to 71st among the country's best-performing cities, per an annual report from the Milken Institute.
Why it matters: The 2025 ranking evaluates U.S. city metros on several economic factors that make it an attractive place to live, including job growth, affordable housing and economic equality.
State of play: San Diego's metro, which is the county, dropped 34 spots from last year, after seeing big declines in its job growth rankings, particularly the short-term and in high-tech sectors.
- Part of that was due to a nationwide downturn in the tech industry, but it hit hubs like San Francisco harder.
- Meanwhile, growing labor markets in Raleigh, North Carolina; Ogden, Utah; and Salt Lake City pushed those cities to the top of Milken's list.
By the numbers: Short term job growth was around 1-1.4% in San Diego, and 4.7% from 2018 to 2023, per the Milken report.
- In 2024, overall job growth was about 0.5% across the region — about half the rate of the U.S., according to Eduardo Velasquez, senior director of research and economic development at the San Diego Regional EDC.
Zoom in: San Diego is seeing job declines in some of the highest-paying and traditionally fastest-growing industries, Velasquez told Axios.
- Life sciences saw a bit of a giveback of the pandemic-era job growth that was fueled in part by a surging investment in biotech tools, pharmaceuticals, medical devices and genomics. The industry is seeing some job losses as the companies "right-size," Velasquez said.
- Employment in the local manufacturing industry, which accounts for nearly one in 10 private sector jobs across the region, has also been hurt by high operating costs and federal funding targeting other markets.
Between the lines: More people are moving out of San Diego than moving in, and those departing are taking their jobs with them, which has contributed to the employment decline.
- Remote work has also allowed people to do these types of jobs in less expensive cities.
- Since 2019, San Diego has seen an 80% decline for job postings for software developers, which has been one of the region's most in-demand jobs for the past decade, Velasquez said.
The other side: San Diego's tourism and hospitality industries are recovering well, and the national tech industry is set to rebound this year, which should be reflected in future job growth numbers.
- Housing affordability still ranked low in the Milken report, but it improved slightly.
Reality check: The report doesn't explicitly look at other quality-of-life factors people may consider when picking a place to live, like traffic congestion, public transit access and park space.
What we're watching: Emerging AI technology will probably affect the job market as companies incorporate those tools into their workplace.