OC Is SoCal’s Tightest Job Market

Orange County has led Southern California’s office growth, and despite already being the tightest market, the market has continued to see job growth this year. According to a recent report from JLL, Orange County hit an unemployment low in April and May of 2018, at 2.6%. While education and health services has led employment growth, the market has seen job growth across job sectors with nonfarm employers adding 170,000 jobs in the last five years.

“With 2.9% unemployment, Orange County has been Southern California’s tightest job market for a couple of years now, yet has continued to manage positive job growth,” Paulina Torres, research analyst at JLL, tells GlobeSt.com. “In the last 12 months, total nonfarm employment has increased by 14,400 jobs—a 0.9% increase—compared to a 2% increase from the 12 months prior.”

In November 2018, however, Orange County job growth climbed to 2.8% from the low earlier in the year. “Employers in the county are expected to continue to add jobs but at a slower pace so more cooling is in store for the market,” adds Torres. Manufacturing jobs in particular have fallen, with the sector losing 30,400 jobs in the last 15 years.

Outside of manufacturing jobs, job growth has been consistent across all job sectors. Education and health services have led the pack, followed by leisure and hospitality, construction, professional and business services and government jobs, according to the JLL report. “Education and health services have been prominent components of leasing activity in Orange County in the last few years,” says Torres. “Important examples of leases signed in the last two years are Hoag in Costa Mesa, Westcliff University in Irvine, and Agilon Health in Anaheim.”

Job growth has helped fuel leasing activity throughout the Orange County market—not only in educational and health services. The top job growth sectors have turned into leasing activity in the market. “Three of the top four sectors that have experienced the most growth—education and health services, leisure and hospitality, and professional and business services—also account for a total of 36% of the county’s total payroll employment, with professional and business services accounting for almost 20% alone,” explains Torres. “This sector has experienced a job growth of 21%, adding a total of 55,000 jobs in OC over the past 15 years. The tremendous increase in this sector directly translates into demand for office space, which has played an integral role in the rise of rents, the development of new office product, and increased property values.”