San Francisco saw the biggest jump in its real gross domestic product (GDP) of any large county in the U.S. for 2021, a countervailing point to the grim economic news that has predominated in recent months.
From 2020 to the end of last year, San Francisco saw an increase of 14% to its real GDP, which is a measure of the total value of goods and services produced in a specific region, adjusted for inflation. Between those two years the county saw its GDP increase from $175.9 billion to $200.5 billion
That was the largest upswing measured by the Bureau of Economic Analysis among counties with populations greater than 500,000. The agency said the leading contributor to San Francisco’s growth was the finance and insurance industry, which benefited from the booming stock market.
California as a whole saw its GDP rise by 7.8% over the same period. San Francisco's economic growth between 2020 and 2021 ranked as first among all counties in the state, outstripping fellow Bay Area counties like Santa Clara (13.3%), San Mateo (12.9%) and Alameda (6.5%)
San Francisco saw a small decrease in its GDP due to the pandemic, experiencing a 0.2% drop in its economic output between 2019 and 2020 from $176.2 billion to $175.9 billion. But the economy came roaring back in 2021, with San Francisco's $200.5 billion GDP ranking as the fifth highest in the state behind Los Angeles, Santa Clara, Orange and San Diego counties.
The Bay Area as a whole benefited from the large economic shifts that were kicked off by the pandemic, which shifted commerce, communication and corporate activity online.
But this boost has crashed back down to earth in 2022, amid a pullback in venture capital investments, a cooldown in the stock market and higher interest rates put in place to combat inflation.
Now, with many experts projecting a recession in 2023, and Downtown SF’s economic struggles proving itself a hot topic nationally, it’s yet to be seen how resilient the local economy can be in a challenging environment.
“Unfortunately, the tech sector is the wind beneath the wings of the Bay Area economy, and that breeze does appear to be dying down,” said Charles Dougherty, a senior economist at Wells Fargo.