The Santa Clarita Valley economy is entering a new phase.
After several years of strong growth, the latest data shows a shift. Job growth has slowed. Real estate is adjusting. Some industries are moving forward, while others are taking a step back to recalibrate. Across the board, businesses are taking a more measured approach to growth.
While that might feel uncertain, it’s actually a necessary adjustment after several years of strong growth.
This is what a transition period looks like.
And for businesses, site selectors, and investors, this kind of moment is worth paying attention to.
Because when the market shifts, so do the opportunities.
The Q4 data reflects an economy that is recalibrating after a period of rapid expansion.
Some parts of the economy are cooling slightly. Others are holding steady. And a few are still growing. Together, it paints a picture of a market that’s adjusting, not standing still.
Hiring hasn’t stopped, but it has become more selective.
By the end of 2025, job growth in the Santa Clarita Valley had slowed, reflecting a broader trend seen across Los Angeles County and California. The region saw a net decline of just over 300 jobs (~.2%), a relatively modest shift within a labor force of roughly 150,000.
This data reflects not a pullback across the board, but a shift in where growth is happening.
Job growth was concentrated in healthcare, education, local government, manufacturing, and transportation and warehousing, with momentum picking up in some of these sectors toward the end of the year. Job losses were primarily seen in professional and technical services and hospitality, reflecting broader industry shifts and evolving business models.
Even with these shifts, the unemployment rate moved below 5%, signaling a labor market that is adjusting but still fundamentally stable.
What this means:
Companies are becoming more intentional in how they grow their teams by prioritizing efficiency, specialization, and long-term alignment over rapid expansion.
For employers, this means a more targeted hiring environment. Competition remains strong for highly skilled roles, particularly in healthcare, manufacturing, and technical fields, while other areas may begin to see improved access to talent as the labor market rebalances.
At first glance, more “for lease” signs can raise questions. But the data tells a more complete story.
In the industrial sector, leasing activity continues at a healthy pace even as new buildings come online, increasing availability across the market. Much of the recent rise in vacancy is tied to new product entering the pipeline, including more than 400,000 square feet delivered in Q3. While net absorption remains soft as the market works through that inventory, transaction activity in 2025 has exceeded levels seen in any year since 2021.
The result is a more flexible and accessible market for companies looking to grow in 2026.
The office market is still adjusting to hybrid work, but recent data shows steady signs of progress. Availability has improved, net absorption turned positive in 2025, and lease rates have started to stabilize, with more than 120 lease deals completed across the market.
Part of that shift is being driven by healthcare. As healthcare employment grows and more services move into outpatient settings, demand for medical office space is helping to fill space and support overall occupancy.
Retail is a mixed picture. Occupancy is stable overall, yet certain categories face continued pressure from inflation and shifting consumer behavior.
These trends in industrial and office space are also reflected in broader economic conversations, including a recent SCV Means Business podcast discussion on regional and national market shifts.
What this means:
Businesses have more options, whether they’re expanding, relocating, or reevaluating their space needs. Activity is increasing alongside availability, giving companies more choices and more leverage than they’ve had in recent years.
The housing market is beginning to shift after several years of tight supply.
Inventory is increasing, which means:
At the same time, prices and sales remain strong, and new development is still moving forward.
Overall, consumers remain active, but more selective in how and where they spend.
What this means:
Things are easing, not dropping off. The market is becoming easier to navigate, for both businesses and employees.
That momentum is reflected in recent high-profile projects, including One Battle After Another, filmed at LA North Studios in the SCV, which earned six Academy Awards. Achievements like this highlight the caliber of work being produced locally and reinforce the region’s role as a film-friendly production hub within the greater Los Angeles market.
Many of these trends are part of broader patterns shaping the region. SCVEDC’s Economic Outlook explores these dynamics in more depth, offering a longer-range view of where the Santa Clarita Valley economy is headed.
Periods of transition can create uncertainty, but they also create clarity.
When the market changes, it influences how businesses make decisions about hiring, space, expansion, and timing. That shift brings both challenges and strategic opportunities.
After several years of tight labor conditions, the SCV workforce is entering a more balanced phase.
What this means:
Companies in the SCV have an opportunity to refine hiring strategies, focusing less on volume and more on alignment. Companies are prioritizing roles that directly support growth and operations, while gaining more flexibility in areas that were previously difficult to staff. Expanding companies looking for local talent can visit our Santa Clarita Valley hiring platform, the SCV Job Board.
The industrial market is shifting but remains active.
What this means:
For companies that need space, this is one of the most favorable environments the SCV has seen in years. More availability, combined with ongoing market activity, gives businesses the ability to be more selective—whether they’re expanding, relocating, or entering the market for the first time.
Periods of transition often create the best entry points, and that’s exactly where the SCV is today.
What this means:
For companies evaluating office space, this is a more flexible and accessible market than in recent years. Businesses have greater ability to right-size, upgrade, or reposition their space—while still benefiting from the SCV’s workforce, location, and business environment.
Today’s market conditions are creating a more strategic environment and opening up more access than it has in recent years.
What this means:
Companies evaluating the SCV today have more room to make strategic decisions, whether that’s entering the market, expanding operations, or repositioning for growth. Availability, industry depth, and regional coordination are aligning in a way that supports both near-term decisions and long-term investment.
There’s no question that things feel different.
What this means:
We’re in another moment of adaptation. Businesses that stay close to their customers and adjust how they operate—whether through pricing, staffing, or service delivery—will be better positioned to stay competitive as conditions continue to shift.
This is exactly the kind of environment where economic development plays a critical role.
In 2025, growth slowed across the region. (Review the SCVEDC's 2025 Annual Report for a deeper dive.) In response, SCVEDC focused on protecting momentum, supporting businesses, and positioning the region for what comes next.
SCVEDC worked directly with local companies to help them navigate challenges, expand where possible, and stay rooted in the Santa Clarita Valley.
In total, that meant supporting 896 jobs in 2025—well above the 164 jobs projected for the year.
SCVEDC’s efforts remained focused on the industries that drive the local economy, including aerospace and defense, bioscience and medical devices, advanced manufacturing, digital media and entertainment, and information technology.
These sectors continue to provide resilience and long-term growth.
Even in a slower year, activity didn’t stop.
Companies continued to expand. Projects moved forward. Firms continued to invest.
These outcomes reflect a broader reality: businesses are continuing to operate and grow in the SCV while adapting to changing conditions. And the numbers reflected it.
By the end of 2025, there were 1,866 jobs in the active pipeline heading into 2026.
That pipeline matters; it’s what turns today’s activity into tomorrow’s growth.
Upcoming initiatives like Made in SCV will highlight the companies, products, and people that make the region competitive, by supporting both business attraction and workforce recruitment.
At the same time, SCVEDC continues to work alongside the City of Santa Clarita and Los Angeles County to support business growth and reduce barriers to expansion.
As the SCV moves through this period of transition, 2026 will be shaped by a few key questions:
The Santa Clarita Valley economy is evolving and continuing to adapt in real time.
And in moments like this, the businesses that pay attention, stay flexible, and act strategically are the ones that find the biggest opportunities.
Explore the Full Q4 Economic Snapshot: For a deeper look at the data and trends shaping the Santa Clarita Valley economy, download the full report.
Tune in as host Ondré Seltzer, President & CEO of the Santa Clarita Valley Economic Development Corporation, sits down with economist Mark Schniepp, Director of the California Economic Forecast, for a year-end economic update and forward-looking conversation.
Together, they break down the trends shaping the Santa Clarita Valley economy, from workforce shifts and AI-driven productivity to industrial and office real estate activity. The conversation also explores why industries like manufacturing and healthcare continue to show strength in the SCV, and what onshoring, tariffs, and evolving workforce dynamics could mean for regional growth.
From housing supply to consumer sentiment and interest rate expectations, this discussion offers a clear-eyed, forward-looking perspective on what to watch in 2026.
SCV Means Business streams anywhere you listen to your podcasts like Apple, Spotify, or visit us on Youtube to watch the recording!
The Santa Clarita Valley Economic Development Corporation (SCVEDC) is a unique private / public partnership representing the united effort of regional industry and government leaders. The SCVEDC utilizes an integrated approach to attracting, retaining and expanding a diversity of businesses in the Santa Clarita Valley, especially those in key industry clusters, by offering competitive business services and other resources.