California’s economy is expected to add more than 300,000 jobs this year and in 2020, but that will fall well below some of the more robust growth years the state experienced over the last half-decade.
California will add 322,700 jobs this year and 318,500 next year, the Los Angeles County Economic Development Corp.’s 2019 Regional Forecast and Economic Outlook predicts. By contrast, the state added 424,200 jobs in 2014, 474,000 in 2015 and 427,100 the following year.
On the plus side, California’s average annual income will hit $52,447 in 2020, an annual increase of $7,572 from 2014.
More good news: The state’s unemployment rate is headed down. Last year it stood at 4.2 percent. This year it’s forecast to be 3.7 percent and that’s expected to dip to 3.4 percent in 2020, the report said.
“That will be one of the lowest rates it’s ever been,” said Somjita Mitra, director of the LAEDC’s Institute for Applied Economics.
The demand for housing, particularly in coastal regions of California, is predicted to spur more construction, with a year-over-year increase in permits of more than 8,000 in 2019 and 2020.
But that won’t be enough to meet the demand, according to Mitra.
“It’s still a drop in the bucket,” she said. “We still have a pretty critical housing shortage. We would need 500,000 more homes to meet our population and economic growth — and that would have to include homes that are affordable for people who live here.”
The report also includes economic breakouts for Los Angeles, Orange, Riverside and San Bernardino counties …
Los Angeles County
The county will continue its shift from production operations like manufacturing and logistics to service-based industries, with major growth in professional business services, health care and hospitality.
Major investment in transit will continue to support strong economic growth, although failure to increase residential density along transit routes heavily limits the potential positive impacts.
“One of the big things we are dealing with is traffic congestion and mobility issues,” Mitra said. “It can take a long time to get from one part of L.A. to another. This is a highly desirable market, but there are lots of issues with rules and regulations and height restrictions on how high you can build.”
Orange County will continue to see strong economic output, the report said, and higher-than-average education will continue to drive wage growth higher than the regional average, particularly in middle- and high-skilled industries such as business services and healthcare.
Home prices in Orange County are already some of the highest around, and that trend is expected to continue. December figures from price tracker CoreLogic show the median price for a single-family home in the 92606 ZIP code of Irvine, for example, was $930,000, up 4.2 percent from a year earlier. In the 92612 ZIP, it was more than $1.1 million, a 31.4 percent hike from December 2017.
Riverside County’s economic growth should continue, fueled heavily by its role as a key transportation and shipping hub for Southern California. The relative affordability of housing in the region is expected to drive population growth as families move from high-priced coastal regions.
CoreLogic figures show that home prices are considerably lower there than in Orange County. In December, the median price in Riverside ranged from $390,000 to $525,000, depending on the ZIP code.
Riverside County is predicted to lead the region in personal income growth.
San Bernardino County
The region’s importance as a key logistics hub will continue, according to the report, with strong employment and wage growth coming from transportation and trade. But mounting trade tensions with China will likely cause a drag on local growth, the report said.
“We haven’t seen it yet,” said Inland Empire economist John Husing. “One of the first places you’d notice that would be a slowdown in trade through the ports of Los Angeles and Long Beach, but they both just had a record year.”
San Bernardino County added 22 million square feet of industrial net absorption in 2018, most of which is e-commerce related, Husing said. An equal amount of industrial construction is currently underway.
“We’re filling them as fast as they’re being built,” he said.Related Articles
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