State and Local Economies to See Modest Growth This Year
Apparel manufacturers in Los Angeles County may shed a few jobs this year, but clothing and accessories retailers are expected to see sales gains as consumers become more confident about the economy.
“Last year, some of the biggest gains in retail trade [in Los Angeles County] were in clothing and accessories, which had a 3.4 percent increase in jobs, translating into 1,800 jobs,” said Robert Kleinhenz, chief economist at theKyser Center for Economic Research at the Los Angeles CountyEconomic Development Corp. This year’s apparel and accessories sales increases may not be as aggressive as in 2012, but there will be money to be made.
That outlook was part of the center’s “2013–14 Economic Forecast & Industry Outlook,” which was released Feb. 20.
Overall, the economy is improving slowly on all fronts, both locally and nationally.
Los Angeles County has seen good job growth. The county entered 2013 on an upswing from a labor market that accelerated 1.8 percent during the second half of 2012.
Job growth contributed to a nearly 1 percent decline in the state’s unemployment rate, which fell from 11.1 percent in 2011 to 10.2 percent at the end of last year.
Nonfarm jobs in Los Angeles County are expected to grow by 1.7 percent this year and 1.8 percent in 2014.
The largest employment gains for 2013 are expected to be in the fields of leisure and hospitality (8,600 jobs), healthcare (5,000 jobs), construction (4,900 jobs), and professional, scientific and technical services (4,400 jobs).
Job losses will continue in manufacturing and government, but losses won’t be as great as in the past.
As consumers continue to reach into their pocketbooks, total taxable retail sales in Los Angeles County, which mushroomed 9.4 percent last year, will grow 5.9 percent this year and 3.4 percent in 2014.
“The consumer sector will be important to get us moving faster over the next couple of years,” said Kleinhenz, who was the principal author of the economic forecast. Typically, consumer purchases contribute to 70 percent of the country’s gross domestic product.
Last year, California was truly the Golden State as it moved faster on the economic track than much of the rest of the nation. Software companies and the technology industry were responsible for a lot of that.
California’s gross state product grew by 2.7 percent last year, compared with the nation’s 2.1 percent.
Still, California had the third-highest unemployment rate in the country, due to the meltdown of the housing industry. The unemployment rate stood at 9.8 percent at the end of last year, compared with 7.8 percent for the nation. States with higher unemployment figures are Nevada (10.2 percent) and Rhode Island (10.2 percent).
The good news is that job growth in California this year should rev up even faster than in 2012. During the last six months of 2012, nonfarm jobs grew 2 percent year-over-year.
Plus, job growth is hitting nearly all major California cities. San Jose, home to Silicon Valley, led the pack. The city saw a 3.4 percent year-over-year spike in employment. San Francisco wasn’t too far behind, with job growth clocking in at a 2.5 percent increase.
The Central Valley also saw more jobs, with the exception of Modesto, which experienced a 0.2 percent decline.
In Southern California, employment growth was led by Orange and San Diego counties, with 1.6 percent gains.
And Los Angeles County and the Inland Empire, comprising Riverside and San Bernardino counties, had smaller growth, with jobs growing at a 1.4 percent rate.
Of the more than 1.2 million jobs lost during the recession, the state has only recuperated 380,000 of those. Major strides were made last year, when 248,000 non-farm jobs were added.
Job growth was positive in all the private-sector industries in California, with the exception of manufacturing, which lost nearly 3,900 jobs.
And the government, which is the largest industry in the state, with 16.5 percent of all wage and salary jobs, lost more than 34,000 jobs last year, for a 1.4 percent decrease.
“We know it has been a long slog, but in 2013, progress is going to be more evident,” Kleinhenz said. “This will be a consistently good year.”
On the national front, growth should be on an even keel with last year. Kleinhenz predicted that the national gross domestic product this year and next will grow about 2 percent, on par with last year. “I’m not doing any cartwheels, but I am pleased with the direction the economy is taking,” he said.
Business investment on things such as buildings, equipment and software grew 7.7 percent in 2012, with sharp rises in aircraft production along with manufacturing and utilities structures. Business spending is expected to inch up at a more modest 3.8 percent this year and a healthy 7.2 percent in 2014. There will be sizable jumps in purchases of information technology and communications equipment.
On the trade arena, both exports and imports have grown over the past three years. Last year, U.S. exports grew 3.2 percent to $1.83 trillion. Exports this year will be tempered by the international economy increasing at only 2.4 percent, but larger increases are anticipated for 2014.
While imports increased by 2.5 percent in 2012 to $2.24 trillion, they are expected to creep up only 1.5 percent. A more aggressive 5 percent gain is expected in 2014 as the U.S. economy accelerates.