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San Francisco experienced the largest increase in its real gross domestic product (GDP) of any major U.S. state in 2021, a counterpoint to the grim economic news that has prevailed in recent months.
From 2020 to the end of last year, San Francisco saw a 14% increase in real GDP, which is a measure of the inflation-adjusted total value of goods and services produced in a given region. Between those two years, the county’s GDP grew from $175.9 billion to $200.5 billion
That was the largest increase among counties with more than 500,000 residents measured by the Bureau of Economic Analysis. The agency said the main contributor to San Francisco’s growth was the financial and insurance industries, which benefited from the booming stock market.
Across California, GDP grew 7.8% over the same period. San Francisco’s economic growth between 2020 and 2021 ranked first among all counties in the state, outperforming other counties in the Bay Area such as Santa Clara (13.3%), San Mateo (12.9%) and Alameda (6.5 %).
San Francisco saw its GDP decline slightly due to the pandemic and saw its economic output contract by 0.2% from $176.2 billion to $175.9 billion between 2019 and 2020. But the economy got back into full swing in 2021, with San Francisco’s GDP at $200.5 billion, the fifth-highest in the state behind Los Angeles, Santa Cruz, Orange and San Diego counties.
The Financial District in San Francisco on Thursday, November 17, 2022. | Camille Cohen/The Standard
The Bay Area as a whole benefited from the major economic changes sparked by the pandemic, which pushed commerce, communications, and corporate activity online.
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But that rebound has bottomed out again in 2022 amid a retreat in venture capital investment, a stock market slowdown and higher interest rates to fight inflation.
Now, with many experts forecasting a 2023 recession and Downtown SF’s economic woes proving to be a hot topic nationwide, it remains to be seen how resilient the local economy can be in a challenging environment.
“Unfortunately, the technology sector is the wind beneath the wings of the Bay Area economy, and that breeze seems to be dying,” said Charles Dougherty, senior economist at Wells Fargo.
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