San Diego EDC warns of weak job growth, high churn even as hospitality recovers

Eduardo Velasquez, vice president of the San Diego Regional Economic Development Corporation, gave a regional economic update that the subcommittee used to frame local strategy discussions.

Velasquez said Carlsbad has a tight labor market (about 4.1% unemployment) and a high median household income (he cited about $143,000). Regionally, he said only roughly 2,600 net jobs were added in 2025, well below historical averages; removing health care from the totals suggests the region is experiencing near-term weakness in job growth. He flagged that many innovation-cluster industries (aerospace, clean tech, life sciences, technology, advanced manufacturing) have seen headcount declines since 2022 and that some firm exits or relocations drove a net decline in the number of firms in certain sectors.

Velasquez described increased churn in business formation: about 46,000 new businesses formed in the region in the prior year while roughly 43,000 closed or relocated, which he called higher-than-normal dynamism. He also noted that much of recent hiring growth has been concentrated in lower-wage sectors, which has a weaker effect on overall economic growth.

He discussed workforce-demographic shifts and the continuing premium for bachelor'level jobs in the innovation economy, the potential role of AI and productivity tools in altering hiring patterns, and the challenge of affordability for new homeowners. Members asked about the EDC's role in advocacy and youth/college pathways; Velasquez said the EDC is not an advocacy organization but helps connect employers and educational institutions and offers free services to businesses.

Next steps and context: Velasquez encouraged local staff to use the EDC as a regional partner for site selection, workforce connections and strategic partnerships; councilmembers requested relaying local priorities and exploring ways to support small-business talent pipelines.