California GDP. Economy of California

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:55

California is a large state in the western United States. It has a shape elongated in the meridional direction, bordering the Pacific Ocean in the west, Mexico in the south, and other US states in the north and east. The date of formation of this state is September 9, 1850. The largest cities in California are San Francisco and Los Angeles. The state of California is growing fast. California's GDP is the largest among all US states.

State Overview

California ranks third in area and first in population among other US states. The capital of California is the city of Sacramento. The most famous city in the state is Los Angeles. Another city in the state of California, San Francisco, has also gained great fame.

California's economy is well developed and includes industries such as agriculture, oil refining, tourism, and information technology. California is also considered the world center of cinematography, whichcontributes significantly to the state's economy.

Geographic features

California is located in the southwestern United States in the dry Mediterranean climate zone. The mountainous terrain prevails. The average height above sea level is 880 meters, and the maximum is over 4000 meters. The seismic situation is quite unfavorable.

The climate is hot and rather dry. In summer, clear dry weather prevails with high temperatures. Winters on the coast are mild and moderately wet. In the north of the state, the climate is cooler and more humid. In the east it is arid, with cold winters and hot summers. In the mountains, a decrease in temperature and an increase in precipitation are associated with altitudinal zonality. In continental regions, there is a large daily temperature range.

Vegetation corresponds to climatic conditions. Depending on the area, it is represented by Mediterranean, mountain forest, semi-desert or desert communities. Much attention is paid to nature protection: there are 8 national parks and 87 other natural parks.

Population

California's population is growing at a tremendous pace. So, in 1900, only 1 million 490 thousand people lived in the state, and in 2016 the number of inhabitants was already 39 million 250 thousand people. Rapid growth has been noted since 1940, and the rate of population increase has hardly changed since then. This is largely due to the rapid growth of the state's economy. But the same factor is also a serious problem for California.

Economy

California's economy is the largest among all US states. In terms of gross domestic product, California surpasses our entire country, including by sector. California's GDP is in 7th place in the world. The share of this state in the gross national income of the United States is 13 percent. California's annual GDP is $2.5 trillion. One of the reasons for leadership in relation to other countries was the appreciation of the dollar against other national currencies. But it was the development of the economy that was decisive. The state's economy is growing faster than the US economy as a whole.

The economy is developing in many directions. The development of new technologies, especially in the energy sector, is of great importance. Thanks to this state, it was possible to reduce greenhouse gas emissions to below 1990 levels, despite rapid population and GDP growth. The transformation of the energy and other sectors towards carbon-free and energy-saving technologies will undoubtedly affect the development of the state's economy as a whole. Various law enforcement agencies, including the military, have received great development in California.

Economic forecast for the coming years

According to analysts' forecasts, in the next year or two, the development of some areas in the economy will be combined with a decline in others. Until the end of 2018, California's GDP will grow and will grow by 3% by the end of the year. At the beginning of 2019, it will decrease by a percentage, and then by another 1.5% in 2019.

The employment situation will continue to improve. The level of personal income of citizens will increase. The largest growth will occur in construction, education and he althcare, information technology, local government, logistics, warehouse services, and professional and business services.

The situation with housing affordability will worsen, which will have a decelerating effect on the economy. While more people will be able to own their own homes by 2020, this will not be enough to meet the huge housing demand.

Expected high population growth rate. Its rate in the coming years will be 0.5% per year or more, and the total population of the state will increase from 39.7 to 40.4 million people.

In relation to other regions of the US, the situation in California will have its own specific differences. Thus, there is a situation in the labor market when the number of low-paid jobs in production is decreasing, while the number of highly paid jobs in the field of information technology is growing. Because of this, the state's manufacturing industry will not be able to compete with those regions of the United States where labor is cheaper.

In the next 2 years, the growth of wages of workers and the level of consumer inflation are expected. In 2018, wage growth will be 4 percent, and the inflation rate will be 2.5 percent. Prior to this, inflation was about 1.2% per year.

Consumer spending is expected to increase by 2.5-3% per year and decrease in 2019. Passenger car sales will fall from 17 million in 2017 to 16.5 million in 2019.

Housing stockwill continue to increase. In two years, 1.3 million housing units will be commissioned. This is an average over the past 100 years.

Unemployment will remain low. In 2018, it will be 3.7 percent, and in 2019 - 4.2 percent.

Fed funds rate hike will continue. The rate will continue to rise in 2018 and 2019. The 10-year United States Treasury is down 3 percent through the end of 2018 and more through the end of 2019.

Mortgage interest rates are expected to increase to 4.8% at the end of 2018. At the same time, a decrease in housing affordability is predicted.

California's Biggest Companies

California is the center of concentration of famous companies. The largest enterprises in California accumulate huge production capacities and financial resources. Apple tops the ranking by revenue in billions of US dollars. Her income in 2017 was $229.23 billion. In second place is McKesson with $198.53 billion. In third place is Chevron ($134.53 billion), followed by Alphabet ($110.86 billion). Intel, a well-known company in our country, is in sixth place and has an annual income of 62.76 billion dollars. Facebook's revenue is estimated at $40.65 billion.

California - GDP per capita

California's gross domestic product is over $2 trillion. This sharply distinguishes this state from other US states. However, in terms of GDP per capita, California lags behind many regions of America. The amount of income per personhere is 47401 dollars. In first place is the Federal District of Columbia. Here, the income per person per year is $74,513. In second place is the state of Connecticut ($60,847 per person).

Low compared to other states, incomes in Utah, West Virginia and South Carolina. Here they are 36274, 35613 and 35453 dollars per person per year, respectively. Idaho ($35,382), Kentucky ($36,239), Arkansas ($36,086) are also low.

California Industry

California has long taken a course towards the development of environmentally friendly industries and technologies. Other states have tried to follow this path in recent years, but the scale of technological innovation is the largest here.

In general, California industry is diversified. The food, electronic, space, oil, chemical, pharmaceutical, metalworking, furniture, metallurgical and machine-building industries are developed. Science-intensive technologies have a high share.

It is in California that the headquarters of well-known manufacturers of electronic and computer equipment are located.

California Energy

Energy development is on the path of increasing introduction of solar, wind, hydro and geothermal energy, which are becoming more competitive in the global market. In 2018, California's renewable energy transition goals are even more ambitious than before: 100% renewable energy in electricity generation by 2045 and 65% by 2030. California leads the states and inspeed of development of electric transport.

California's total electricity generation is second only to Texas in the US.

Traditional power industry also has a place. California produces oil and gas. Oil, gas, coal are imported. The state is home to the centers of large gas, oil and energy corporations.

Food industry is represented by winemaking, production of juices, drinks, beer, alcohol (especially wines), canned food.

Agriculture

California's agricultural products are the most expensive in the US. It is most developed in the Great California Valley. They grow grapes, fruits, vegetables, sugar beet, cotton, rice. Cattle breeding is also developed.

Another agricultural area is the Los Angeles Lowlands. Grapes, tomatoes, herbs, citrus fruits are grown here. Dairy farming is developed. Crop areas are shrinking due to sprawling developments.

The third agricultural region is the inland valley of the Colorado River - Imperial. They grow cotton, vegetables, grain; produce meat.

Crop production is the most important (70% share), while livestock production accounts for 30%.

The emphasis is on the cultivation of long-term storage products, including those used for the production of canned food. Various California farmers specialize in the production of one type of product, i.e.e. are highly specialized. Hired labor is widely used, including Mexican illegal immigrants.

California's most developed industry is fruit growing. The maximum volumes fall on grapes, peaches, plums, oranges, lemons, apricots, pears and walnuts. Somewhat less, but also significantly, the production of apples, dates, cherries, tangerines, grapefruits, almonds, olives, avocados, figs.

Animal production is dominated by dairy cows, pigs, sheep, broilers.

Conclusion

Thus, California is one of the world's largest economies. Innovative technologies and developed agriculture play an important role in its development. Per capita incomes are high, but not a record for the states. The main problem is population growth, due to which there is a constant shortage of housing, and valuable agricultural land is being built up. Obviously, without birth control and migration, it will become increasingly difficult to solve the current problems of the state, and the situation in the social sphere may begin to deteriorate over time.