Sacramento economy grows at fastest pace in a decade
The Sacramento region's economy grew 3.5 percent last year, the fastest increase since 2005, after adjusting for inflation, according to new figures from the U.S. Bureau of Economic Analysis.
The positive numbers come just days after the U.S. Census Bureau reported a significant, broad increase in the region's household incomes during 2015.
The four-county area's gross domestic product - the value of goods and services produced - rose to about $119 billion last year. Adjusting for inflation, that is the highest the region's GDP has ever been, eclipsing even 2006, the last year before the Great Recession.
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Three sectors drove much of the increase: Government, construction and health care.
Adjusting for inflation, GDP tied to construction jumped 13 percent from 2014 to 2015. Developers are starting to build again though the sector still contributes much less to the local economy than it did a decade ago.
The health care sector has grown steadily for years, fueled largely by an aging population. GDP for that sector grew by 6 percent in 2015.
The government sector GDP grew by 2 percent, after adjusting for inflation. Even such modest expansion makes a difference in Sacramento, where government is the largest economic driver.
The Sacramento region's GDP growth was higher than growth in San Diego and Bakersfield and similar to growth seen in Orange County, Los Angeles and Fresno. But it lagged behind booming Silicon Valley, where GDP grew by almost 9 percent, after adjusting for inflation.
Nonetheless, Sacramento and other California regions "are now fully participating in the state’s growth," said Stephen Levy, senior economist at the Center for Continuing Study of the California Economy.
This chart shows the annual change in Sacramento's gross domestic product during the last 15 years.