2014 San Gabriel Valley Report
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2200 1144 SSaann GGaabb rriieell VVaalllleeyy Economic Forecast and Regional Overview Prepared for the San Gabriel Valley Economic Partnership By the Kyser Center for Economic Research Los Angeles County Economic Development Corporation TABLE OF CONTENTS Executive Summary ................................................................................................................ 1 Industry Clusters in the San Gabriel Valley ........................................................................ 3 The Economic Environment .................................................................................................. 4 The U.S. Economy .............................................................................................................. 4 The California Economy ..................................................................................................... 8 The Los Angeles County Economy .................................................................................. 11 San Gabriel Valley Economic Indicators ............................................................................ 13 Demographics ................................................................................................................... 13 Employment ...................................................................................................................... 15 Income and Wages ........................................................................................................... 17 Business Establishments .................................................................................................. 18 Industries of the San Gabriel ............................................................................................... 19 Health Care ....................................................................................................................... 19 Higher Education .............................................................................................................. 20 International Trade/Goods Movement .............................................................................. 21 Manufacturing ................................................................................................................... 23 Professional and Business Services ................................................................................ 24 Real Estate: Nonresidential ............................................................................................. 25 Real Estate: Residential .................................................................................................. 27 Retail Trade ...................................................................................................................... 30 Tourism and Hospitality .................................................................................................... 32 The Nonprofit Sector ......................................................................................................... 33 Statistical Tables ................................................................................................................... 36 Cultural and Infrastructure Assets ..................................................................................... 56 REPORT RESEARCHED AND PREPARED BY: Robert A. Kleinhenz Ph.D George Entis Chief Economist Research Assistant Kimberly Ritter-Martinez Dymphna Menéndez Economist Kyser Center Intern Ferdinando Guerra Economist Executive Summary EXECUTIVE SUMMARY The San Gabriel Valley is named for the river that flows southward through 1771: Franciscan the center of the valley, which itself was named for the Spanish mission San Missionaries, Fathers Gabriel Archangel. Covering 385 square miles, the San Gabriel Valley is Angel Somera and defined by its namesake mountains to the north, the cities of Pasadena, Pedro Cambon, founded the original South Pasadena and Monterey Park to the west, the crest of the foothills that Mission San Gabriel parallel the Pomona (SR-60) freeway to the south, and the Los Angeles/San Archangel. This Bernardino county line to the east. Its population of 1.76 million is larger than marked the beginning that of 52 of California’s 58 counties. Its 31 cities represent more than a third of the Los Angeles of the municipalities in Los Angeles County and its population and industries region’s settlement by Spaniards. are as diverse as any geographic area in California.1 The San Gabriel Valley Economic Forecast and Regional Overview offers a snapshot of the region’s resources, tracks its recent economic performance, and summarizes the economic outlook over the forecast period of 2014 and 2015. The findings contained in this report serve as a valuable tool for business people, government officials, and households as they make spending and investment decisions for the forecast period and beyond. Over the course of 2013, as the recession receded from view, the San Gabriel Valley economy made notable progress against a wide array of indicators. Although the Valley’s economy continues to lag some of the larger improvements taking place in the whole of Los Angeles County, the focus in the San Gabriel Valley has shifted from recession and recovery to growth and new possibilities. The ethnic composition of the San Gabriel Valley’s population has undergone significant changes but it has been quite stable in terms of total numbers. Since 2000, the Valley’s population has edged up by just under 1.7%. After peaking in 2004, the Valley’s population had declined by 27,700 people by 2009. Population growth turned positive again in 2010 and is expected to continue on an upward trend through the forecast period (2015). Population growth rates of just over 0.6% are forecast for this year and next. Stronger population growth last year was accompanied by more robust gains in jobs and worker payroll. In 2013, employment in the San Gabriel Valley increased by an estimated 2.0% to 645,430 payroll jobs. Although employment in the region has not yet recovered to prerecession levels, that goal is finally within reach. With the improvements anticipated this year and 1 This year, at the request of the San Gabriel Valley Economic alliance, this report will include the City of Montebello for the first time. While Montebello is geographically a part of the san Gabriel Valley, it also belongs to the Gateway Cities Council of Governments. Where ever possible, data tables have been updated to include current and historical data related to Montebello. LAEDC Kyser Center for Economic Research 1 Economic Forecast and Regional Overview Executive Summary next, job counts are expected to reach 674,900 in 2015, exceeding the pre- recession peak of 674,400 reached in 2008. Likewise, worker payroll in 2013 totaled an estimated $29.5 billion, up by 3.0% from 2012. Most of the growth was the result of higher job counts as opposed to wage increases, which with the exception of some high-demand occupations, have been relatively flat. Total nonfarm payroll is projected to increase by 3.6% to $30.6 billion in 2014 and by 4.5% in 2015 to nearly $32.0 billion. Ten of the fifteen major industry sectors in the San Gabriel Valley added jobs in 2013. Payrolls in health services posted the largest gain on both a numerical and percentage basis. However, while the health care sector is doing well, much of that jump was due to a reclassification of home health care workers from “other services” (which saw a corresponding decline in jobs) to health services. Leisure and hospitality, along with wholesale trade were also major sources of employment growth. Total taxable sales in the Valley have made an impressive comeback and are close to regaining all the ground lost during the recession. In 2013, the LAEDC estimates taxable sales in the San Gabriel Valley increased by 5.6% compared with 2012, reaching $21.4 billion. By the end of 2014, taxable sales in the Valley are expected to climb to $22.4 billion surpassing their prerecession peak of $22.2 billion. Recovery in the housing market is well underway but it will take a few years to unfold completely. Median prices continue to rise due to limited supply. Increased demand was also a factor, but higher interest rates and declining affordability are starting to have a dampening effect on buyer activity. New home construction has been slower to recover, but rising median prices are boosting homebuilder confidence. Permits for new homes increased by 76.4% in 2013 to 1,529 units, and are expected to rise by 24.3% and 15.3% annually in 2014 and 2015 respectively. The San Gabriel Valley also has a noteworthy nonprofit sector made up of over 6,000 organizations that include world-renowned hospitals, educational institutions, foundations, charitable groups, arts organizations and trade associations, to name just a few. Nonprofit activity makes a significant contribution to the Valley’s economy especially in the areas of health care and education. The San Gabriel Valley regional economy will continue on a track of modest expansion during 2014 and 2015. The growth trajectory of the region’s economy will depend largely on the performance of the overall national economy and, given the importance of international trade to the region, the performance of the nation’s largest trading partners as well. LAEDC Kyser Center for Economic Research 2 Economic Forecast and Regional Overview Executive Summary The San Gabriel Valley has made significant progress since the end of the recession and, while