The two-county area is again pulling ahead of other regions in the state in terms of growth in home prices and new residential and nonresidential construction, said the forecast, written by Los Angeles-based Beacon Economics and released in partnership with the UC Riverside School of Business Administration.
"The Inland Empire has started moving forward. It's not a blistering pace, but it is up," said Christopher Thornberg, founding partner of Beacon Economics.
"Everything is moving in the right direction," he said. And it should continue that way, unless decisions in Washington "push us into an austerity recession."
He was referring to a schism between congressional Republicans and the White House over taxation and other budget issues - known as the "fiscal cliff."
Experts say if no compromise is reached by the end of the year, the result will be higher taxes, which will pull money out of the economy, as will cuts in programs.
"In this region the new growth is beginning to help bolster the underlying tax bases for local governments," the forecast said.
Helping to give cities a needed boost is a surge in vehicle sales, up 17percent over the first half of 2011 and building material sales, up more than 11 percent.
"Beacon Economics is forecasting that Inland Southern California, which was one of the state's fast-growing areas before the housing bubble collapsed, will resume its place as the leading edge of the recovery in the coming years, despite getting off to a relatively slow start," he said.
The report is part of the 2012 Riverside/San Bernardino Economic Forecast Conference to be held today at the Doubletree by Hilton Hotel in Ontario.
"Despite slow growth in employment in Inland Southern California...the economy continues to show signs of improvement, with progress beginning to be seen in most of the region's key sectors and across most of the Riverside-San Bernardino metropolitan area.
"Gains in consumer spending, residential and commercial real estate, tourism and logistics continue to drive the economy forward," the report said.
Here are some highlights:
Sales tax: Receipts through the first two quarters of 2012 are up 9percent over the same point in 2011. The forecast calls for the region to reach its pre-recession peak level of taxable sales by 2013.
Hotels and restaurants: Up nearly 9percent on a year-to-date basis. This is "perhaps even more important than auto sales from an employment perspective," the report says.
Hotel occupancy, which fell to just below 50percent during the recession, was nearly 60percent in October. Prices have been trending up since early 2010. Ontario has experienced the biggest improvement in its hotel market, with its largest gains in both occupancy and room rates.
Employment: Growth has been "relatively disappointing," the report says. The slow growth is, in part, related to continued job losses in the public sector.
Factoring out the government contraction, the two-county area's employment is up 4percent since hitting bottom.
Private-sector employment growth in the two-county region has outpaced year-over-year growth in the rest of the state, except for the most recent two-month period.
Leading job-growth areas: Administrative support, a category that includes staffing agencies and temporary workers, has led the charge - adding 10,000 jobs in the two-county region over this point in 2011.
Many of these jobs will translate into permanent jobs, the report says.
Wholesale trade, transportation and warehousing has added nearly 5,000 jobs on a year-to-date basis in 2012.
Real estate: San Bernardino and Riverside counties have experienced eight consecutive quarters of price appreciation through October with prices up nearly 23percent from the troughs in May 2009.
The San Bernardino-Riverside region has been leading the state in multi-family permit growth. Through July 790 new multi-family units were given permits - up 70percent over the same period in 2011.
Beacon Economics predicts new home construction will pick up steam in 2013, with roughly 3,500 new building permits issued. By the end of 2017, 17,000 permits will be issued for residential units, the report says.