LAEDC Releases 2025 Economic Forecast Report

FOR IMMEDIATE RELEASE

LAEDC Releases 2025 Economic Forecast Report: Rebuilding, Recovering, and Increasing Resilience in Los Angeles County

Los Angeles, CA – February 26, 2025

The Los Angeles County Economic Development Corporation (LAEDC) today released its 2025 Economic Forecast Report, a comprehensive analysis prepared by the LAEDC’s Institute for Applied Economics. The report examines national, state, and local economic indicators, offering key insights into emerging trends and challenges in the wake of the devastating Palisades and Eaton Fires while also highlighting opportunities for economic recovery and resilience across Los Angeles County.

“Our 2025 Economic Forecast reflects the continued resilience of Los Angeles County’s economy as we rebuild and recover from the recent wildfires,” said Stephen Cheung, President and CEO of LAEDC and World Trade Center Los Angeles. “In recent years, our region has navigated a global pandemic, high inflation, and dual Hollywood strikes, yet our strong economic growth in 2024 demonstrates that Los Angeles is well-positioned to address the challenges ahead.”

“This year’s forecast underscores the need for our regional economy to ‘do more’—particularly in the face of wildfire recovery, housing affordability, rising unemployment, and uncertain federal policies like tariffs,” said Shannon Sedgwick, Senior Director of LAEDC’s Institute for Applied Economics. “However, with the 20th largest economy in the world and a diverse set of industries, Los Angeles County remains inherently resilient.”

Key Findings of the 2025 Economic Forecast

Economic Growth and Employment

• Real GDP growth for Los Angeles County is projected at 2.1% in 2025 and 1.3% in 2026, a slowdown from 2024’s unexpectedly high 3.4% growth.
• Nonfarm payroll jobs are expected to grow by 0.7% in 2025 and 0.2% in 2026, continuing a positive but slowing trend.
• Unemployment is projected to rise to 6.1% in 2025, up from 5.7% in 2024.
• The education, healthcare, and leisure & hospitality sectors will continue to drive job growth, while manufacturing faces long-term decline.

Housing and Population

• Los Angeles County’s population decline has stabilized, with a slight increase of 4,800 residents in 2024.
• Housing affordability remains a crisis, with just 11% of households able to afford a median-priced home.
• While residential building permits have modestly increased, new construction remains well below the levels needed to alleviate the housing shortage.

Business Environment

• The cost of doing business in Los Angeles remains approximately 20% higher than the national average, continuing to pressure local businesses.
• Employment in Film and TV production has not fully recovered post-strikes, with employment remaining below pandemic levels.
• Major upcoming events, including preparations for the 2028 Olympics, continue to drive infrastructure investment and business opportunities in the region.
• Regional wildfire risk and climate resilience remain significant concerns for long-term economic planning.

Policy Recommendations

The 2025 Economic Forecast highlights the need for coordinated regional efforts to address ongoing and emerging challenges:

1. Accelerate Housing Development – Expand production at all price points to improve affordability and reduce population loss.
2. Support Small & Mid-Sized Businesses – Implement targeted programs to mitigate the high cost of doing business in Los Angeles.
3. Invest in Infrastructure – Prioritize improvements in transportation, broadband, and clean energy to enhance business efficiency and quality of life.
4. Expand Workforce Development – Align job training programs with growing and priority industries to address skills gaps and unemployment.
5. Strengthen Climate Resilience – Develop comprehensive strategies for wildfire prevention, water management, and infrastructure hardening to support sustainable development.

Event & Report Access

The 2025 Economic Forecast event took place today at East Los Angeles College, drawing over 400 leaders from business, research, and economic development. The event provided an exclusive, data-driven outlook on the economic trends shaping Los Angeles, California, and beyond, with discussions on the impact of recent wildfires, shifting federal immigration policies, tariffs, and the ongoing effects of the Hollywood strikes.

The full 2025 Economic Forecast Report is available at https://laedc.uw2.rapydapps.cloud/laedcs-2025-economic-forecast or upon request.

About LAEDC

The Los Angeles County Economic Development Corporation (LAEDC) works to advance opportunity and prosperity for all through collaborative economic development leadership, objective economic research and analysis, strategic business assistance, workforce development, and policy advocacy. Founded in 1981, LAEDC is a 501(C)(3) private, non-profit, public benefit corporation committed to creating a resilient and inclusive economy.

Learn more at: www.laedc.org

Media Contact:

Josaline Cuesta
Director of Strategic Partnerships
Josaline.Cuesta@laedc.org
213.236.4846