San Diego Economy and the Drought (May 2015)
Tuesday, May 19, 2015
SAN DIEGO – A new study released today from the National University System Institute of Policy Research (NUSIPR) finds that drought-related water cut backs are likely to have only a limited and localized impact on the San Diego economy.
Analyzing a unique dataset on the water consumed by different industries in the region, NUSIPR researchers found that, on average, non-agricultural businesses annually use 54,000 gallons of water per employee. Most of this is for outdoor landscaping, health, and hygienic uses. While cutbacks and restrictions are likely to pose inconveniences to certain businesses, NUSIPR does not see these as having region-wide impacts on employment.
Instead, NUSPIR researchers identified five industries, employing approximately 50,000 San Diegans that could have impacts that are more pronounced.
Of chief concern is the region’s agricultural sector, which consumes an average of 34 times more water per worker than the rest of the private sectors. Employing 10,400 San Diegans as of March 2015, it is likely that cut backs in acreage under production could negatively impact employment in the sector.
Four other industries were identified as consuming more than double the amount of water on a per employee basis than the average private sector firm: Soft drink manufacturers and brewers, dry cleaners and laundry services, food manufacturers, and construction firms. These industries are likely to experience the greatest impact if restrictions tighten and continue.
Said Erik Bruvold, President of NUSIPR, “The data would seem to indicate that area businesses already use water efficiently and that further restrictions would not impose significant downward pressure on regional employment.” Bruvold went on to add,“restrictions are likely to be felt among a handful of industries, which use water in core processes. First among these will be agriculture but we could see negative impacts on a half dozen other industries based upon this data.”
The report calls special attention to the regions’ “Professional, Scientific and Technical Services” industry, the category encompassing many of San Diego’s high-tech and life science industries. On a per-employee basis they use 45% more water than the private sector average. Trade associations like BIOCOM San Diego and CONNECT have, in the past, voiced concern that water restrictions could impose significant hardship on certain firms in this industry which use water as part of their core research activities.