California will continue its steady pace of recovery in the next two years, boosted by a pickup in the labor and housing markets that is lifting many parts of the country.
The state is poised to add more than half a million jobs this year and next, pushing the current 8.3% unemployment rate down to about 7%, according to an annual forecast by the Los Angeles County Economic Development Corp. scheduled to be released Wednesday.
“While we are seeing faster growth nationally, it is still modest growth and we see corresponding modest gains here in Southern California,” said Robert Kleinhenz, the group’s chief economist.
By the end of last year, California had regained nearly 70% of the more than 1.3 million jobs it shed from the start of the recession until January 2010. Job growth should accelerate to 2.1% in 2015, up from 1.7% last year.
Los Angeles County has lagged behind some other Southland counties in the recovery. Its 9.2% jobless rate is higher than that of Orange County (5.2%) and of San Diego County (6.4%).
L.A. County may not fully rebound to its pre-recession job levels until later next year or early 2016, Kleinhenz said.
Its sluggish but steady growth has been tethered in part to reliance on sectors such as government and trade, transportation and warehousing.
Governments in the county are expected to drop an additional 400 jobs this year, according to the L.A. County Economic Development Corp., a nonprofit that does economic research and promotes local business growth.
In the private sector, the construction industry is expected to lead gains, adding an estimated 18,000 jobs in the next two years. Professional, science and technical services is forecasted to add 17,900 jobs, and healthcare will gain 16,600 positions.
Jobs in the entertainment industry, such as motion picture and sound recording, could pick up depending on the success of the California film tax credit program; legislation introduced this week could expand the incentives to big-budget movies and premium cable shows.
International trade at the ports of Los Angeles and Long Beach, the two busiest container ports in the country, should also expand this year and next as goods travel between the United States and its trading partners.
All told, Los Angeles County could add 109,600 jobs to its payrolls in 2014 and 2015. However, it’s going to take at least a few years before the county hits its normal unemployment rate of 7.5%.
“L.A. has been adding jobs but not as fast as other parts of the state,” Kleinhenz said.
Orange County, by contrast, was the first in Southern California to begin recovering after the recession officially ended in 2009. Over the last few years, its economy has expanded at a faster pace than that of both the United States and California, the report said.
Orange County, which once relied on orange groves and oil, is now a hub for high tech, aerospace, manufacturing and tourism. The jobless rate is expected to fall to 4.6% in 2015.
The housing market will continue to rebound. Last year, new home building gained traction with a 63% jump in total housing permits. “Stronger economic growth and demographic pressures will push new home construction higher this year and into 2015,” the report said.
The battered Riverside and San Bernardino counties of the Inland Empire will continue to struggle, although momentum should pick up this year and into next. The region should finally recover all of its lost jobs by 2017.
Eventually, the Inland Empire is expected to regain its reputation as the location of choice for people priced out of more expensive counties near the coast.
Growth “should accelerate as it once again becomes the destination in Southern California to relieve pent-up demand for affordable housing and lifestyles,” the report said.