Forecast L.A. Study Shows Mixed Bag for City’s Economic Future
According to the recently-released Forecast L.A. study, Los Angeles residents and economists are optimistic about economic growth for the area. At the same time, they are concerned about the cost of living as well as housing affordability in the area. Overall, fewer Los Angeles residents feel there is likely to be an improvement to the economy that will affect their daily lives. Generally speaking, they felt that the higher costs in Los Angeles coupled with what they perceive to be a growing disparity between the rich and the poor will have a negative effect on their financial standing. On the other hand, many feel the economy will be better next year and believe their neighborhoods are good places to live.
The perception that the economy will grow in a favorable manner appears to be backed by evidence. For the fourth year in a row, jobs were added at a faster pace at the state level than at the national level. This is expected to continue through the year, with the state forecasting job growth at just over two percent. In Los Angeles County, local employment is expected to grow by 1.7 percent through the end of the year. On the other hand, unemployment is expected to grow to 6 percent.
When surveyed about their perception of the area’s economic future, 35 percent of Los Angeles residents expecting to see unemployment increase further. Furthermore, only 16 percent indicated that housing is affordable while the majority reported that they expect housing costs to grow even more costly. A recent Beacon Economics report seems to agree, showing that single-family home prices are likely to increase by 5 to 10 percent this year. Rents are also expected to increase in response to a shortage in single-family and multi-family developments.
Los Angeles International Airport Offers Economic Boost
Los Angeles International Airport serves as an economic engine for Southern California, as it provides an estimated 620,610 jobs and generates $126.6 billion in revenue for the local economy. This includes $37.3 billion in labor income, $6.2 billion in state and local taxes and $8.7 billion in federal tax revenue. Due to the airport’s massive renovation program, which is expected to be completed in 2023, it has created an additional 121,640 jobs. This translates into $7.6 billion in wages, $20.3 billion in business revenue, $20.3 billion in business revenue, $966 million in state and local taxes and $8.7 billion in federal tax revenue.
Due to the economic resurgence that the airport is helping to support, L.A. Mayor Eric Garcetti has pledged to invest billions into the airport in order to help it grow to be even stronger. Currently, there are over 30 projects in development as part of a 15-year plan that was implemented in 2008.
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(all data current as of 5/29/2017)
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