LOS ANGELES (CBSLA) — A study is predicting Southern California’s local governments will suffer “severe and long-lasting” impacts from the coronavirus crisis.
Los Angeles, Imperial, Orange, Riverside, San Bernardino and Ventura counties are predicted to have an unemployment rate of 19.3% this year and 12.2% in 2021. The sharp change comes after the region saw an unemployment rate of about 4% in January and February.
The analysis by the Southern California Association of Governments is projecting a decrease in taxable sales of 26% to 38% this year and next year, which would mean between a loss of $178 to $264 billion for local governments.
“This is unlike anything we’ve seen in our lifetimes,” Executive Director Kome Ajise said.
The biggest sales drop will be from restaurants, which are expected to lose between 53% and 65% of its business over the next two years. Retailers would also see a sales decrease of 43% to 57%, car dealers and parts store sales are projected to drop 38% to 48% and home furnishing and appliance sales are expected to drop 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,” Rex Richardson, a Long Beach City councilman and the association’s first vice president.
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.
(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)