(Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)
LOS ANGELES-According to Beacon Economics, concerns over the economy dipping back into a recession are overblown. “The economic slowdown seen in recent national numbers is largely due to an unseasonably warm winter that made winter growth stronger—but borrowed against growth in the spring—rather than any ‘real’ slowing of the economy,” says the forecast just released by the firm as part of the 2012 Los Angeles Economic Forecast Conference, which was hosted with Pepperdine University’s Graziadio School of Business and Management.
But the firm is still less optimistic than it once was. “Economic growth over the next one to two years will be frustratingly slow,” says the firm. Beacon Economics has downgraded its previous US outlook for 2012 to a growth rate that is below 3% but still north of 2%.”
According to founding partner Christopher Thornberg, “There aren’t any gut-wrenching internal imbalances threatening the economy like the ones that drove us into recession in 2008…Growth is going to continue for the US but it’s going to be sluggish because of overseas issues that will keep the trade deficit stubbornly large, uncertainty being wreaked by an exceptionally divisive presidential election, and the ‘fiscal cliff’ being faced by the nation in January of 2013 when various temporary tax cuts end.”
California and Los Angeles County will continue their economic recovery, according to the firm, but like the nation, at a slower than desired pace. The state’s nonfarm employment growth will average roughly 1.5% this year and accelerate to 1.9% in 2013. The firm maintains that California’s pace of recovery is faster, however, than in the US overall, a sentiment GlobeSt.com recently reported on.
According to the firm, leading service sectors driving the state’s job growth include gains in technology, agriculture, hospitality, and business and professional services sectors.
The biggest worry we have for Los Angeles is the fact that manufacturing—traditionally an important source of growth in the region—does not seem to be experiencing the same renaissance being seen in much of the rest of the nation, explains director of economic research Jordan Levine.
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| The firm also points out that median home prices in California are expected to inch upwards into the $260,000 range by the end of 2012 as sales increase and inventories of foreclosed homes decline. “Expect home price appreciation in the 3.5% to 4% range over the next two to four years,” says the forecast. |
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| In terms of consumers, according to the forecast, consumer spending and taxable sales are only 3% off their pre-recession peak. The outlook sees California’s taxable sales reaching their pre-recession peak by the end of the year and growing at a solid pace thereafter. |
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
