LOS ANGELES – The coronavirus pandemic’s economic impacts, including historic levels of unemployment, on Los Angeles County may be “severe and long-lasting,” according to a study published Thursday by Southern California Association of Governments [view it here].
The study by the association’s analysts predicts the six counties it encompasses — Los Angeles, Imperial, Orange, Riverside, San Bernardino and Ventura — will have an annual unemployment rate of 19.3% in 2020 and 12.2% in 2021. The unemployment rate in January and February was about 4%.
City budgets are likely to feel severe impacts of the pandemic, as the analysis projects a decrease in taxable sales of 26% to 38% in 2020 and 2021, which would range from $178 billion to $264 billion lost for local governments.
Restaurants are projected to have the biggest sales drop over the next two years, ranging from 53% to 65%, according to the study.
Retailers are projected to see a sales decrease of 43% to 57%, car dealers and parts stores to see a decrease of 38% to 48%, and home furnishing and appliance store sales down 34% to 43%.
“There is no segment of our economy that is not impacted one way or another by COVID-19, which only emphasizes the need for an inclusive economic development strategy moving forward,” said SCAG’s first vice president Rex Richardson. “The work we do in the coming months will be critical to how quickly and effectively we put this crisis behind us.”
The analysts believe the pace of the economic recovery will be determined by how businesses reopen and the how quickly a vaccine is available to the public.
The study predicts the low point will be June 1, followed by a long recovery period, with economic impacts felt through the end of 2021.
“This is unlike anything we’ve seen in our lifetimes,” said SCAG Executive Director Kome Ajise.
“We know we’ve got huge challenges ahead of us, and will be working closely with our stakeholders and member cities and counties to identify a pathway to recovery that benefits all Southern Californians.”