Economy of California

Economy of California

Economy of California, is the largest in the United States. As of 2015, California's gross state product (GSP) is about $2.458 trillion. The state's GSP grew 4.1% in 2015.

In 2002, the U.S government began to use the North American Industry Classification System (NAICS) system of classifying economic activities, to better reflect today's economy.

Government is California's largest industry, like most states, with about 2.5 million employees. The second largest industry, according to the Census, is Healthcare and Social Assistance.

International trade and tourism
California has historically derived significant revenue from international trade and tourism. However, the state's share of America's merchandise export trade has been steadily shrinking since 2000, from 15.4% to 11.1% in 2008. The exports of goods made in California totaled $134 billion in 2007. $48 billion of that total was computers and electronics, followed by transportation, non-electrical machinery, agriculture, and chemicals. California trade and exports translate into high-paying jobs for over one million Californians. According to the US Bureau of Economic Analysis (BEA), in 2005, foreign-controlled companies employed 542,600 California workers, the most of any state. Major sources of foreign investment in California in 2005 were Japan, the United Kingdom, Switzerland, France, and Germany. Foreign investment in California was responsible for 4.6 percent of the state's total private-industry employment in 2009. Total direct travel spending in California reached $96.7 billion in 2008, a 0.8% increase over the preceding year. Los Angeles County receives the most tourism in the state.

Per capita income was $38,956 as of 2006, ranking 11th in the nation, but varies widely by geographic region and profession. Some coastal cities include some of the wealthiest per-capita areas in the U.S., notably La Jolla in San Diego, Beverly Hills, in Los Angeles County, Newport Beach in Orange County and Santa Barbara in Southern California, San Francisco, Silicon Valley and Marin County. The most expensive and largest housing markets in the U.S. are in the state of California, so there are a number of communities where average housing prices hover between US$1–2 million. Generally, the Central Valley in northern California is the least expensive area, as is the Inland Empire in Southern California, though prices in these regions are still much more expensive than most other areas of the country, to the point that there are also communities in these areas where housing prices average around the $1 million mark. The agricultural central counties have some of the highest poverty rates in the state. The high-technology sectors in Northern California, specifically Silicon Valley, in Santa Clara and San Mateo counties, are currently emerging from the economic downturn caused by the dot-com bust, which caused the loss of over 250,000 jobs in Northern California alone. As of spring 2005, data from UCLA Anderson indicates that economic growth has resumed in California, although still slightly below the national annualized forecast of 3.9%.

The international boom in housing prices has been most pronounced in California, with the median property price in the state rising to about the half-million dollar mark in April 2005. Orange County, Ventura County and the San Francisco Bay Area have the highest median prices, each approaching $650,000. The least expensive region is the Central Valley, with a median price of $290,000.

Various real estate markets in California experienced sharp increases in value in the early 2000s, followed by declines in 2007 and 2008, as a housing bubble burst.

However, beginning in 2007 with the Credit Crunch in the banking system, thousands of homes have been foreclosed statewide, thereby leading to plummeting home prices. As of 2014 California was found to be the most expensive state in which to lease a home.