The San Gabriel Valley economy is expected to slow sharply in 2025, as reduced construction activity and broader financial pressures weigh on the region’s prospects, according to a new forecast report.
Construction Pullback Weakens Outlook
The 2025 San Gabriel Valley Economic Forecast Report identifies several headwinds that will restrain local growth. Among the most significant is a decline in new housing production, which economists say will limit job creation and investment.
A newly developed San Gabriel Valley Leading Economic Index shows that multiple factors are converging to dampen momentum. These include fiscal austerity measures, continued trade tariffs, and an overvalued stock market that may not sustain recent gains. The report cautions that while no forecast can perfectly capture every risk, the indicators point to a marked slowdown across key sectors.
“This is not just a typical construction cycle,” the report states. “The housing shortage is a structural weakness that will affect nearly every community.”
Wildfire Recovery Remains Slow
Natural disasters have intensified these challenges. Many residents displaced by recent wildfires have yet to rebuild. The report notes that most property owners will likely remain in limbo through 2025.
Experts cite the importance of regional cooperation to address both immediate recovery and longer-term housing needs. Without sufficient new development, the report warns, the region will struggle to resettle displaced families and absorb future shocks.
“The impacts of natural disasters always spill over neighborhood borders,” the authors wrote. “Far from the burned sites, San Gabriel Valley residents are feeling the economic ramifications.”
Resilience and Community Cohesion
While the economic outlook is subdued, the report also highlights the strong spirit of solidarity among local residents. Community groups have provided critical support to wildfire survivors and other families in need. Economists stress that this social cohesion is vital to building resilience.
“No community is an economic island,” the report states. “When we build for each other, we create a powerful force that undergirds long-term economic success.”
Housing Shortage Undermines Stability
The decline in construction is not only a sign of weakness but also a risk to future stability. Fewer housing starts mean less capacity to accommodate population growth and disaster recovery.
The report urges local governments and civic leaders to prioritize affordable housing development. It describes the shortfall as a barrier to economic mobility and an obstacle to maintaining a thriving middle class.
As the San Gabriel Valley economy prepares for a slower year, policymakers and residents alike face a pivotal moment. The coming months will test the region’s ability to balance fiscal pressures with the need to rebuild and rehouse.
For more details on the forecast and recommendations, visit the San Gabriel Valley Economic Partnership.
