Experts and regular people alike are predicting 2015 will be a better year for the Los Angeles economy than 2014, according to this year’s Forecast LA report.
The forecast is 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 were correct about the expanding economy last year, and they expect things to improve even more this year,” said Fernando Guerra, director of the center and professor of political science and Chicana/o studies at LMU. “Respondents in our survey remain wary after the extended downturn, but overall they predict growth across the board.”
Among the report’s major findings:
- The outlook for the Los Angeles County economy remains positive, with local employment projected to grow by 1.7% through the end of 2015 and unemployment expected to dip to 7.3%. Home prices will also continue to grow in Los Angeles over the near and long term: from 2016 through 2020, prices are expected to appreciate at an annual rate of 4%.
- Housing remains an interesting issue. More survey respondents this year say people can afford homes, but they also predict further increases in the cost of buying a house. Beacon Economics forecasts single-family home prices to rise 2.6% through the end of 2015.
- Employment growth in California is forecast to exceed 2.5% in 2015, with unemployment falling below 6% next year. But residents were split when asked about unemployment: 36 percent expect a decrease, 30 percent see an increase, and 34 percent see no change.
- U.S. domestic demand is picking up steam, a trend that will push the nation’s 2015 economic growth into the 3% range, and lead to even better numbers in the years following.
The economy does face challenges, mainly in the form of frothy financial markets and gridlocked politics. “But these aren’t enough to diminish our relatively bullish near-term outlook,” said Christopher Thornberg, founding partner of Beacon Economics and one of the forecast’s lead authors. “Expect ongoing gains in the U.S. economy, for now.”
The opinion poll is based on the results of a telephone survey administered in January 2015 to 2,400 Los Angeles County residents. Additionally, LMU students interviewed 57 of the county’s 88 city managers (or their equivalent in cities with a different structure) to see how these leaders’ opinions line up with those of residents.
The participating city managers, like the mayors whose opinions were surveyed in last year’s Forecast, 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 Angelenos express a high level of optimism,” said Brianne Gilbert, associate director of the Center. “The number of people who said they would recommend someone to move to their neighborhood, or that ‘things are going in the right direction’ indicates a level of confidence and commitment to the region that we think only exists in Los Angeles.”
The full report was released at a morning event at LMU on April 7, when researchers from Beacon Economics and the Center for the Study of Los Angeles discussed their findings. The full forecast can be found here.