Local Economy Seen Improving Through 2014Wednesday, February 20, 2013
The Los Angeles economy is expected to continue its steady improvement through 2014 barring sudden impacts of budget cuts or other unforeseen drags on the national economy, according to a forecast to be released today.
The Los Angeles Economic Development Corporation’s annual forecast projects the county’s unemployment rate will fall to an average of 10 percent this year and 9.7 percent next year. The rate averaged 11.1 percent in 2012.
The county is also expected to also add 65,000 non-farm payroll jobs in 2013 and 70,000 jobs next year, for annual growth rates of 1.7 percent and 1.8 percent respectively.
“The private sector will build upon the gains of last year with nearly all sectors showing job gains this year and next,” said Robert Kleinhenz, LAEDC’s chief economist and the forecast’s lead author.
Yet even with this growth, Kleinhenz and co-authors Kimberly Ritter-Martinez and Ferdinando Guerra said the county will not return to pre-recession employment levels until 2015 or 2016.
The forecast also projects 3.6 percent growth in personal income (consistent with last year) and a 6 percent increase in taxable sales this year, down from 12 percent last year.
All this is predicated on continued growth in the national economy. A sharp slowdown resulting from sequestration-related budget cuts or other unforeseen events would negatively impact the local job and income growth figures. Unless an agreement is reached in the next eight days, sequestration cuts go into effect on March 1.
If sequestration cuts are imposed, Kleinhenz said, he does not expect them to result in a sudden, sharp pullback in the national or local economy. Rather, he said, they are likely to have a dampening effect as growth sectors such as defense and healthcare/social service provision as those areas figure out how to deal with federal spending cutbacks.
The forecast, which will be unveiled Wednesday morning at a conference at the Biltmore Hotel, also looks at two key industries for Los Angeles County: entertainment and international trade. Employment in the entertainment industry is projected to increase roughly 4 percent this year, while the total value of trade should increase by 3 percent.