Southern California’s Economy Growing
The economy may be moving slowly, butretail sales in Los Angeles County are predicted to see a nice 5.6 percent bumpthis year.
In faster-growing areas, such as Orangeand San Diego counties, retail sales should perk up about 6.7 percent.
That’s the prediction from the Los Angeles County Economic Development Corp., which released its 2012Mid-Year Economic Forecast on July 25.
“We are seeing some modest growth inhousehold income,” observed Robert Kleinhenz, chief economist for the LAEDC.“That means people may havea littlemore discretionary income than in the last few years, and they will spend it ondurable goods, such as cars, and then on other retail items, such as clothing.”
In the past few years consumers havebeen making purchases based more on what they needed as opposed to what theywanted. That will change as disposable incomes grow.
Overall, Southern California’s economyis just inching along. Next year, the economy will grow at a moderate pace thatwon’t break any records but will be welcome. “We are moving forward,” Kleinhenznoted.On the employment front, Los AngelesCounty in 2011 saw a 1 percent gain in jobs. That 1 percent gain should holdtrue in 2012 and then rise 1.2 percent in 2013, the LAEDC forecast predicted.
It will take several years to see jobgrowth that rivals what it was before the recession ended in June 2009, butjobs should be added this year and next in all sectors except government andmanufacturing.
The county’s unemployment rate,currently at 11.2 percent, is expected to dip further this year and hoveraround 10.8 percent in 2013.
The technology sector, both inCalifornia and Los Angeles County, has helped the unemployment rate shrink.That sector added 31,000 statewide jobs in 2011 and grew by a healthy 3.4percent.
“The fact of the matter is technologyencompasses a wide area where innovation is really thriving and leading to jobcreation,” Kleinhenz said. “We should be thankful that we have got the economicbase here that attracts these jobs and nurtures those industries.”
However, apparel manufacturing inSouthern California is not expected to be a growth area. Employment hasdeclined steadily for several years and will probably continue along that path.
The apparel-manufacturing workforce inSouthern California numbered 53,000 people in 2011, down 4.5 percent from 2010.Also, the average wage in 2011 for Los Angeles County apparel-manufacturing employeesdecreased by 1 percent to $35,000 a year.
The LAEDC does not expect job growth inapparel manufacturing unless there are technological innovations that increaseproductivity or consumers change their buying habits to prefer “Made in USA”labels.
However, the “Made in USA” label isstill popular overseas, with apparel exports from Los Angeles County up $7.4million in the first five months of this year over last year.
On the apparel wholesale side of thebusiness, employment grew slightly to 26,900 jobs in 2011, compared with 26,400in 2010.
That has helped to keep local designersbusy creating new styles. The Bureau of Labor Statistics estimates that in2011, there were 3,560 fashion designers working in Southern California. Theirsalaries ranged from $64,500 in Orange and San Diego counties to $75,900 in LosAngeles County.
California shaping up
The U.S. gross domestic product isexpected to grow 2 percent this year and next, which is below the preferred 3percent seen in past years.
Still, there will be no double-diprecession despite economic woes in Europe and no financial crisis in the UnitedStates even though Congress hasn’t decided whether to extend tax cuts that havehelped average consumers put more money in their pockets.
The 2 percent GDP growth will helpCalifornia reduce its current unemployment rate of 10.7 percent to 10 percentnext year.
Job growth so far this year has beenprimarily in the Silicon Valley and San Francisco Bay area along with OrangeCounty. Other areas in the state—such as Los Angeles County, the Inland Empire, Sacramentoand parts of the Central Valley—have added jobs but at a much slower pace.
International trade continues to play animportant role in the state’s economy, particularly in Southern California,where the Port of Los Angeles andthe Port of Long Beach handle 40percent of all the ocean-going cargo coming from Asia. California is thesecond-largest exporting state in the country, with exports coming from theaerospace, pharmaceutical, information technology and agriculture sectors.
In 2011, statewide trade rose 11.1percent to $558.4 billion, setting a new annual record. This year, trade isexpected to grow 3.9 percent to $580.1 billion with a 5 percent increasein 2013.