A 2025 economic forecast report released last week by the San Gabriel Valley Economic Partnership and Cal Poly Pomona predicted a significant slowdown in economic growth this year while acknowledging the region was well positioned to weather a disaster like the Eaton fire.
Prior to Jan. 7, indicators such as employment growth, subsiding inflation and growing housing prices, were signs of a well-performing regional economy, according to the report.
While many positive trends are expected to continue in 2025, the report forecasted a slowdown in economic growth, citing factors that include slowing housing production, rising insurance costs made worse by the fires, tariffs raising the cost doing business, and new uncertainty in federal policymaking.
The macroeconomic impacts on the entire U.S. economy that are also felt in the San Gabriel Valley include housing production, manufacturing production and oil prices.
The major employment industries in San Gabriel Valley include wholesale trade, healthcare, education, leisure and hospitality and transportation and warehousing.
The projected impact of import and retaliatory tariffs on San Gabriel Valley employment would equate to a dip of 0.2% or 1,100 jobs lost in 2025 and 0.8% in the following two years, according to the report.
President Donald Trump has unleashed an array of tariffs on imported goods from foreign nations in an effort he says will raise revenue for the United States and ultimately bring jobs back to the United States.
He also set into motion 25% tariffs on vehicles and auto parts, set to go into effect on April 2.
The tariffed nations have pledged retaliatory tariffs in what has become an escalating trade war in the months since Trump became president.
In the San Gabriel Valley, the hits to the local economy from various economic factors would fall disproportionally on manufacturing, with damage also to construction, wholesale and retail trades, and transportation and warehousing, according to the report.
“Historically, our data show that California wildfires tend to increase rents in the housing market permanently, and it takes multiple years for construction activity to grow significantly,” Cal Poly Pomona Professor Anthony Orlando said in an email. “Therefore, we forecast that most of the needed rebuilding will not happen in 2025.”
Orlando presented the report with fellow Cal Poly Pomona professor Gerd Welke at an event last week.
The report noted that the impact of natural disasters spill over into neighboring communities and that in this moment the slowing housing production will also mean less space to resettle displaced fire victims.
Eaton fire’s impact on San Gabriel Valley employment, the report said, would be hard to quantify. The report referenced a 2014 study that looked at western wildfires from 2004 to 2008. Using that study, it is estimated that about 4,300 jobs in San Gabriel Valley will be lost in 2025, excluding the construction sector.
It is estimated that 27 million worker-hours would be required to complete full clean up and rebuilding of the more than 10,000 structures both damaged and destroyed.
According to the report, an estimate from past California wildfires found that two years on from a fire, about 8% of homeowners had pulled permits to rebuild.
The report noted that uncertainty about the impact comes from the fraction of employment that will be relocated out of the San Gabriel Valley.
According to the report, wildfires, in general, create winners and losers during the recovery phase. Trends include employment shifts between sectors and wages increase for some jobs that are in high demand.
Retail establishments are traditionally hit hard because customers are driven away and sometimes don’t return.
Altadena businesses that survived the fire now enter into an uncertain future with the loss of so many customers and patrons.
“If we are looking for slight good news, wildfires do not tend to spark regional recessions or financial crises,” the report read. “Although they are devastating for the families and businesses whose properties are damaged, they do not generate a significant decline in employment or wages for the surrounding communities.”