Since the bottom of the Great Recession in 2009, and through 2012, San Diego's gross domestic product, or total output of goods and services, has grown only 4.5 percent, compared with 5.3 percent for Caifornia and 6.7 percent for the United States, according to economist Kelly Cunningham of the National University System Institute for Policy Research.
By comparison, San Jose (Silicon Valley) grew by 21 percent, highest among the nation's larger metro areas. San Diego was among the most slowly recovering metro areas such as Riverside-San Bernardino, Sacramento, and Las Vegas. As of last year, San Diego's economy had not quite reached the levels of production reached in 2007 and 2008, notes Cunningham.
Last year, the San Diego economy grew by 2.7 percent adjusted for inflation, but that lagged San Francisco (7.4 percent), Los Angeles/Orange County (3.1 percent), and San Jose/Silicon Valley (2.8 percent).
A big reason for San Diego's weak performance during the recovery period is that military and defense expenditures have softened since 2010, says Cunningham.
Government (federal, state, local) is the largest part of the local economy at 17.8 percent. Military contracting is large. Including government contracting, more than 25 percent of the local economy is generated by government spending.