It’s been a week of forecasts and glimpses of the future. Cal State Long Beach economists presented their regional and local forecasts at the Hyatt, while the Los Angeles County Economic Development Corporation (aka LAEDC) presented an international trade outlook at the always-lovely offices of attorneys Keesal, Young & Logan. (Definitely the best view in Long Beach.)
Perhaps it’s comforting to look ahead to better times when the here and now is grim. They do call economics the “dismal science,” and the CSULB and LAEDC forecasts lived up to the moniker. Both largely agreed that recovery is not coming until 2010 or 2011 (depending on which indicator you’re looking at – unemployment, tax revenue, housing, port cargo volumes, or something else). Long Beach professor Joe Magaddino is famous for using movie titles to sum up his forecasts. This year’s theme: “Dark Knight.” (Leave out the “K” and you’ll get the joke.)
But the forecasts also seemed to agree that we are in the process of hitting bottom now. By measures like housing starts, business inventories, even regional unemployment trends, we are, well, falling less quickly than we were. (That’s what passes for good economic news these days.) Another way of putting a good face on the situation was to point out that we are well positioned for recovery now that housing affordability has dramatically risen (meaning, of course, that home prices have dramatically fallen – more than 50% over 18 months, ouch).
It’s a little harder to accurately report on and forecast our own city’s economy. Data lags, with the most recent showing only the first half of 2008, which was still pretty robust in some sectors. There’s no question that we’re seeing a drop-off in port activity, and hotel occupancy rates are down as business and leisure travelers cut back. Sales tax revenue is down and unemployment is up, though in a repeat of the county and national pattern, Long Beach is projected to lose fewer jobs this year than the 2,500 it shed in 2008. (Total LB employment is estimated at about 200,000.)
One LAEDC economist advised that port cargo volumes will be a leading indicator of recovery: when retailers see consumer activity on the rise, they will begin to increase inventories, and that means more imports and more business through San Pedro Bay. Another glimpse of the future was provided this week by the Long Beach City Council, which, after a 6-hour hearing, voted unanimously to move ahead with the Port’s Middle Harbor project. Four appeals against the project’s environmental impact report had been brought by coalitions of community groups and by the cities of Commerce and Riverside, each of which is affected by port operations that interact throughout Southern California. In discussing the appeals and the project, council members were clearly sympathetic to the appellants’ views, but also mindful of the economic realities we face. While the project may or may not be finished in time for the recovery, its approval was a unanimous vote of confidence in the future of our port, our city, and our economy.