Top 10 Industries Driving Growth in California
California is a national leader in many areas. The state boasts the largest population in the U.S. (more than 37 million), the most cities with the largest population (3 of the 10 largest U.S. cities are in CA), and the largest volume of new business formations in 2017. It's a good place to put down roots for a new business, as it's home to over fifty Fortune 500 companies, including Google, Netflix, Salesforce, and Qualcomm. With such rapid growth, it's no wonder that California has the fifth largest economy in the world—even larger than countries like the United Kingdom and India.
By looking at new business formations in California throughout 2018 so far, we can determine which industries are currently driving the most business growth in the state.
According to the State of Swyft State Report, California saw substantial growth in the consulting industry in 2017—almost 10% since 2012. With almost 20,000 consulting businesses that generate over $20 billion in revenue, this industry is expected to continue expanding over the next five years. The advancement in the consulting industry correlates with other expanding industries in California, particularly health care and IT.
The retail industry has been booming throughout the country—an almost 4% jump from just a few years ago. Industry experts expect even more impressive numbers by the end of 2018. The retail industry has seen growth in California, specifically, as this industry was among the top three industries for new business formations in 2017. Improvements in the state’s overall economic conditions are the driving factor in the surge in the retail industry, as more people are going out and spending money.
3) Real Estate
The real estate industry in California is experiencing a much-needed boost in sales over the past year—a 1% increase over 2017. The commercial side of real estate is still moving forward as well, although the positive trend in the industry leans more toward single-family homes and residential properties. The Golden State’s scaling economyis having a positive effect on the housing market.
California is the entertainment industry mecca of the U.S., and. The expansion of digital media companies like Netflix, BuzzFeed, Amazon, and YouTube has contributed to the industry’s continued growth, with a staggering increase in digital media jobs in the past few years—more than 12% since 2016. Other recent reports show that the entertainment industry had an extraordinary surge of new business formations in 2017.
California's technology industry has engulfed the state's coastal cities, from San Diego to Los Angeles to San Francisco; the Silicon Valley is no longer just a valley, but now makes up almost the entire coast of the nation’s second-largest state. California employs the most tech workers in the country (more than 1 million), and the technology industry is responsible for more than 12% of the state’s economy. LA has seen the largest volume of new tech business formations in 2018 thus far, with San Francisco trailing close behind.
The construction landscape in California looked much different a decade ago when the state was hit hard by the 2009 recession. Now, the construction industry is growing faster than any other industry in the state. Construction-related spending increased over 4% during the last year and was expected to go up another 5% during 2018. Commercial construction is holding strong and is forecasted to remain steady through 2021.
The professional services industry in California is a major force in the progression of the state’s economy. Almost 20% of working adults are employed through this mammoth industry—almost double the employees in the manufacturing industry and more than five times the technology workforce. Professional services also account for a sizeable amount of California's gross national product (almost twice as much as the tech industry).
The healthcare industry recently became the largest employer in the U.S., possibly surpassing the GDP for the entire country by more than 1 percent. In California particularly, healthcare is growing substantially—over 5 million jobs will be flooding the southern regions of the state by the end of 2020. At present, almost 20% of the workforce in California is employed in the healthcare industry.
9) Food Service
California’s food service industry employs nearly 2 million people and raked in more than $80 billion in sales during 2017. As other industries (and the overall economy) continue to climb upwards, food service establishments will also flourish.
The National Restaurant Association projects the food service industry will grow by an additional 10% over the next decade. Beverage manufacturers have another reason to love California—the state legislature recently banned any additional taxes on sodas.
The transportation industry—encompassing logistics services, freight rail, trucking, and more— is highly competitive and employs over 800,000 people—almost as much as the tech industry. Substantial growth has been forecasted throughout 2018 in California, as well as some major changes in the trucking industry over the next decade that will make trucks more efficient and environment-friendly.
SwyftFilings.com analyzed new business formations in California between January 1, 2018 and July 27, 2018 to determine which industries saw the largest volume of new businesses in the state.