Things are getting better, according to a report that combines an economic forecast with a survey of Angelenos and their local elected leaders. The only question is, how much and how soon?
The report is Forecast LA, a partnership between the Thomas and Dorothy Leavey Center for the Study of Los Angeles at Loyola Marymount University and Beacon Economics, LLC. Researchers at both organizations found evidence of growth at the Los Angeles, California, and national level.
“Angelenos have a pretty strong sense of the economic realities facing our region, and they expect things to improve this year,” said Fernando Guerra, director of the center and professor of political science and Chicana/o studies at LMU. “They still remember the negative effects of the recent downturn, of course, and that may be why respondents in our survey say significant economic growth is still several years away.”
Among the report’s major findings:
- The Los Angeles County economy will see steady but not stellar improvement over the next few years, with employment growth rising to 2.5% and growth in home prices slowing to the low double digits in 2014 before dropping to the 5% to 7% range during 2015 and 2016.
- Housing remains a major concern for the region. Population growth is outstripping new construction, while a whopping 83 percent of survey respondents said home ownership remains out of reach for most residents.
- Employment growth in California is forecast to reach 2.1% in 2014 and accelerate to the 3% range in 2015 and 2016. But residents were split when asked about unemployment: 35 percent expect a decrease, 31 percent see an increase, and 35 percent see no change.
- Overall U.S. economic growth is forecast to be above 3% for 2014 – one of the better results since prior to the ‘Great Recession.’
“The fundamentals have significantly improved, and the probability of another major shock hitting the system and disrupting things this year is not high enough to worry us,” said Christopher Thornberg, founding partner of Beacon Economics and one of the forecast’s lead authors.
The opinion poll is based on the results of a telephone survey administered in January 2014 to 2,400 Los Angeles County residents. Additionally, LMU students surveyed 60 mayors (out of the county’s 88 cities) to see how these leaders’ opinions line up with those of residents.
The participating mayors, whose cities represent 85 percent of the county’s population, held a more positive view about the prospect for economic growth than residents. However, the responses of both leaders and residents reflect increasing optimism the closer one gets to home: neighborhoods will do better than the city, cities better than the region, the region better than the state, and so on.
“We found that direct involvement with the area in question is a strong driver of optimism,” said Brianne Gilbert, associate director of the Center. “For example, 100 percent of mayors foresee an improvement in their city’s economy in 2014, while only 83 percent said the same for the nation.”
The full reports were released at a morning event at LMU on Feb. 25, when researchers from Beacon Economics and the Center for the Study of Los Angeles discussed their findings with a group of business and political leaders. Copies of the forecast can be found in two parts here and here.