New jobs, recovering housing market restoring California economy
By Kevin Smith, San Gabriel Valley Tribune |Daily Breeze
California is on track to reclaim its status as the Golden State, according to a report released today.
The Los Angeles County Economic Development Corp.’s 2014-2015 Economic Forecast & Industry Outlook notes that California’s unemployment rate is falling, more people are finding jobs, the housing market is improving and budget surpluses are finally in sight.
The state has regained 70 percent of the more than 1.3 million jobs it lost as a result of the Great Recession, the report says, although the recovery continues to be “very slow.”
“Regionally, the recovery is advancing in nearly every part of the state,” the report says. “Now, after nearly five years of recovery, California is on a more solid footing.”
The report notes, however, that the state is currently grappling with one of its worst droughts on record. Southern California will likely receive little water from Northern California this year and increased conservation and recycling will help the region keep pace with growth and reduce reliance on imported water.
Orange and San Diego counties led the Southland’s growth last year with year-over-year job gains of 2.1 percent and 1.8 percent respectively. Los Angeles and Ventura counties were close behind with employment growth of 1.7 percent. But the Inland Empire was still struggling with growth of just 1.2 percent, the report said.
“The Inland Empire has a lot of strength in construction, but that sector was very hard hit in the Great Recession,” said Robert Kleinhenz, the LAEDC’s chief economist, who helped research and prepare the report. “We’re still looking at several years before we recover all of the jobs that were lost in the recession.”
Los Angeles County — boasting the largest county economy in the nation — saw its population surpass the 10 million mark last year and the region is expected to see nonfarm job growth of 1.6 percent this year with another gain of 1.2 percent in 2015.
The county’s unemployment rate is expected to average 8.7 percent this year and 7.8 percent in 2015.
The most current reading from the state Employment Development Department put L.A. County’s jobless rate at 9.2 percent in December.
The county’s biggest job gains in 2014 are expected to come in health services with 12,800 new jobs. That will be followed by employment gains in leisure and hospitality (8,900), professional, scientific and technical services (8,800), administration and support (7,700) and construction (5,800) and manufacturing (4,700 jobs), the report said.
David Aley, an admissions clerk at the West Hills Health & Rehab Center in Canoga Park, said his facility hired more employees in 2013, bringing the total workforce to around 140.
“In health care you’re always hiring and firing … but mostly hiring,” Aley said with a laugh. “People change jobs, moving from one place to another. But we’re always busy.”
Further inland, the report shows that the combined San Bernardino and Riverside counties area has regained more than 40,000 of the 147,000 jobs it lost during the recession, adding more than 14,000 new jobs in 2013 alone.
The Inland Empire’s most recent unemployment rate of 9.2 percent is expected to average 9 percent this year and drop to 8.2 percent in 2015.
“A lot of hope has been placed on the transportation and logistics part of the economy, not just to generate jobs going forward but to also create a sizable number of well-paying jobs,” Kleinhenz said. “Transportation, warehousing and utilities will grow by at least 2 percent this year in the Inland Empire. The job counts have already exceeded the pre-recession peak.”
The Inland Empire’s biggest employment gains this year are expected to come in retail trade (3,200 jobs), leisure and hospitality (3,200 jobs), health services (2,800 jobs) and government (2,500 jobs).
L.A. County and the Inland Empire are both poised for significant growth in residential housing, the study said.
L.A. County saw 15,700 housing unit permits issued last year and that number is expected to rise 34.4 percent to 21,100 permits this year, with another 28 percent gain in 2015. That would bring the total number of permits issued next year to 27,000.
The Inland Empire is primed for even more dramatic gains. The LAEDC said 8,900 housing unit permits were issued last year. That number will rise 53.9 percent this year to 13,700 permits and 45.3 percent next year to 19,900.
Karl Woehrstein, a broker with the Century 21 Amber office in Torrance, said his area is saddled with an all-time low in inventory. The combination of that and multiple bids have driven home prices back up to 2006 levels, he said.
“Usually our multiple listing service would have 3,000 to 4,000 units for sale,” Woehrstein said. “But now we’re down to about 900 to 950.”
The LAEDC report also notes that the Los Angeles and Long Beach ports play a significant role in Southern California’s economy.
The value of two-way trade in the region is expected to rise 4.5 percent this year to $433.3 billion and 6.9 percent in 2015 to $463.2 billion.
