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Thursday, Jun 13, 2024

FORECAST—Trade Boom Fuels Strong Economic Forecast for L.A.

The Los Angeles economy is chalking up a year of exceptionally strong growth, according to the latest forecast from the Los Angeles County Economic Development Corp. In particular, record growth in international trade is driving the local economy and is expected to buffer the effects of the long-anticipated “soft landing” of the national economy. The LAEDC reports that the total output of goods and services in Los Angeles is expected to increase by 5.3 percent this year, compared to growth of 5.1 percent last year. Total personal income is expected to increase by 6.3 percent this year, up from an increase of 5.8 percent last year. The value of two-way trade through the Los Angeles port district will be an estimated $229.8 billion this year, a 16.6 percent increase over last year, and is projected to grow an additional 10.3 percent next year. “International trade is the poster child of regional economic growth,” said Jack Kyser, chief economist with the LAEDC. “It’s growing like a house on fire, just like the entertainment industry used to do a few years ago, and it has become one of the linchpins of the local economy.” Fueling the stream of imports through the ports is the insatiable appetite of U.S. consumers for everything from toys to apparel to electronic gadgets from Asian countries. At the same time, the recovery of the Asian economies over the last two years has stimulated demand for U.S. exports. As a consequence, the ports of L.A. and Long Beach have seen month after month of record container volume. The surge has not just created jobs and work for longshoremen, but also for truckers, freight forwarders, logistics operators and affiliated support services. At the same time, the growing volume of goods arriving at the ports is creating concern about the ability of the local infrastructure to handle the flow. “It’s becoming a bigger and bigger challenge,” said Jay Winter, executive director of the Foreign Trade Association of Southern California. “The 710 Freeway is getting very congested and there is an increasing shortage of truck drivers to move all the containers off the docks.” The LAEDC expects higher inflation and interest rates to slow down the national economy, from a growth rate of 4.8 percent this year to 3.3 percent in 2001.

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