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LOS ANGELES-Further evidence that the national economy is improving: the country's gross domestic product is on track to surpass the 2% annual growth rate it has seen over the past four years and reach 3% by 2014. According to a recent UCLA Anderson Forecast, the housing and automobile sectors are the biggest contributors to this growth, along with renewed growth in business construction and exports.

“After enduring the slowest postwar recovery on record, the economy is slowly beginning to ramp up,” said David Shulman, senior economist with the UCLA Anderson Forecast, in the report. “To be sure the acceleration will be more of a 2014 event, but the seeds are being sewn for real GDP growth to rise from the tepid 2% we have been used to to something more on the order of 3%.”

Still, this is below the 4%-6% growth rates associated with prior recoveries, Shulman pointed out. “Specifically, after growing at 2.2% in 2012, we are forecasting real GDP to advance 1.9% in 2013 and 2.8% and 3.1% in 2014 and 2015, respectively. Indeed, we anticipate the economy to achieve a sustained 3% growth rate starting in the second quarter of 2014.”

The report also calls for inflation in excess of 2.2% in 2014 and 2015, “as the Fed's extraordinary monetary policies catch up to a slow productivity growth economy,” according to Shulman.

The Forecast's report for California in particular during 2013 and 2014 is similar to December 2012's projection, with adjustments to recent data. Total employment growth for 2013, '14 and '15 is expected to be 1.6%, 2.2% and 2.3%, respectively, and non-farm payroll employment will grow more slowly at 1.4%, 2.1% and 2.3% for the same time.

As GlobeSt.com reported in January, developer sentiment remains optimistic toward multifamily and industrial asset types and cautiously optimistic toward commercial office markets, according to the latest Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey. The three-year outlook for the state's overall CRE industry remains predominantly upbeat, the survey that was conducted in November 2012 revealed.

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If you're planning to be in the Downtown L.A. area on March 27, consider attending RealShare Los Angeles at the Hyatt Regency Century Plaza, part of the RealShare conference series by ALM Real Estate Media Group. Panel discussions among top industry executives at the all-day event include “Economic Outlook: 2013 and Beyond,” “West Coast Investing,” “Retail in Los Angeles,” “CoreNet SoCal Presents the Needs of the Office User,” “Brokerage Leadership Insights,” “Capital Markets in 2013: Making a Real Comeback?”, “Industry Leaders: C-Suite Roundtable,” “The State of the Ports and Industrial Update,” “Multifamily Opportunities” and “Development Update.”

Instant Insights /

Forecast: GDP to Reach 3% by 2014

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