Northrop Grumman won a contract from the Pentagon to build 21 next generation long-range bombers for the U.S. Air Force. The contractor beat out Boeing and Lockheed Martin for the contract which analysts value at around $20 billion. The new bombers will replace the older B-52 and B-1s. Much of the building of the planes is expected to occur at Air Force Plant 42 in Palmdale. This could bring an additional 1,400 jobs to the facilities and be a boost to area suppliers for manufactured parts. Boeing filed a formal protest to the Government Accountability Office regarding the contract. The GAO now has 100 days to review and issue a decision on the protest. The Air Force plans to purchase between 80 and 100 new bombers meaning that future contracts may grow in value of upwards to $80 billion.
Port activity has moderated at the Port of Long Beach and Port of Los Angeles in the months following the August rebound. However, 2015 has been a tale of divergent growth stories between the adjoining ports. As of October, Port of Los Angeles total container counts were down 1.6 percent from a year ago in October. The Port of Long Beach has told a story of growth in 2015. Total container counts were up 6.3 percent from a year ago. The trade weighted U.S. dollar which has appreciated by 12.5 percent since last October and the slowdown in the economies of Asian trade partners are headwinds to area ports heading into 2016.
Monthly home price growth for the Los Angeles Metropolitan Statistical Area has stalled in the third quarter. According to the Case Shiller Home Price Index, Los Angeles saw two monthly declines in home price growth of around -0.2 percent in July and August. Strong home price growth in the Riverside MSA has balanced our home price forecast for 2015. Area home prices are expected to improve with income growth next year.
Click here for the complete Greater Los Angeles Regional Economic Update: Los Angeles 2015Q4.