Economic Study Shows L.A. Headed for Trade Growth
A growing global economy did wonders for trade passing through the airports and seaports around the Los Angeles area in 2010. And the trend is here to stay.
“All of the Los Angeles Customs District’s top five trading partners returned to growth mode [in 2010], and the expanding economy will also act as a tailwind in 2011,” said Nancy Sidhu, chief economist at the Los Angeles County Economic Development Corp., which recently released the “International Trade Trends: The Southern California Region: 2010 Review and 2011 Outlook” report.
Some of the key findings of the report were:
bull; With trade growing in 2010, the Los Angeles Customs District kept its position as the No. 1 international-trade center in the United States. The value of two-way trade through the Los Angeles Customs District is expected to grow 7.5 percent in 2011 to $372.8 billion.
bull; International trade was responsible for 516,000 jobs in 2011, up 2 percent from 2010.
bull; China is the area’s No. 1 trading partner, and that country’s economic growth was a key factor in the 2010 trade recovery and will impact continued growth through 2012.
bull; The South Korea–U.S. Free Trade Agreement will help the region’s trade grow because nearly 30 percent of U.S. trade with South Korea comes through the ports of Los Angeles and Long Beach.
bull; With major terminal expansions coming on board at the region’s two major ports (the Port of Long Beach and the Port of Los Angeles) in the next five to 10 years, there should be no concern about capacity to handle more container traffic.
bull; Competition from other ports presents a challenge to Southern California. The Panama Canal expansion project should be completed by 2014, making it easier to ship goods on an all-water route from Asia to the East Coast. Ports on the East and Gulf coasts are expanding in anticipation of higher volumes. However, the international trade community can still influence shippers’ future decisions.
bull; High oil prices are a concern for international trade because they boost transportation costs. Still, LAEDC’s analysts believe the area’s trade volumes will be sustainable because trade partners in developing countries in Asia are growing rapidly.
bull; The recent earthquake and tsunami disasters in Japan have caused a shortage of Japanese-made goods. Tourism from Japan has also declined. But Japan is poised to bounce back on the sheer size of its economy, being the third-largest economy in the world. A recovery in Japan later this year should lead to higher exports from Los Angeles for the rest of this year and in 2012.—Deborah Belgum
