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Signs Indicate Santa Monica's Economy is Recovering, Officials Say
By Jorge Casuso
April 4, 2022 -- Santa Monica's economy is embarking on a path to recovery, with more than 750 new business permits approved last year, but it remains far below pre-pandemic levels, City officials said Monday.
Unemployment and sales tax figures released by the City on Monday reinforce the upward trend and show the recovery is in large part driven by the hotel and restaurant sectors.
The latest numbers show that the unemployment rate in Santa Monica has declined to 4.9 percent from a high of 16.1 percent in spring 2020 and retail sales have risen, with in-store sales catching up with sales online.
In the past year, 103 restaurants and coffee bars, 92 health and wellness businesses, 73 retailers, 65 beauty businesses, 35 fitness/gym businesses, and 17 auto-related businesses have opened, City officials said.
They were joined by a number of new bike shops and "mobility operators," officials said.
“We are excited to see the creativity and variety of new businesses opening in Santa Monica,” City Manager David White said in a statement.
“These businesses are bringing new energy to our commercial areas and helping contribute to the impressive variety of goods and services offered to our residents, employees, and visitors alike.
"Small and locally owned businesses are the backbone of our community and supporting them generates jobs and resources for our schools and vital City services,” White said.
The most recent sales tax figures -- from July through September of last year -- show a 26.2 percent rise in sales tax revenue from the Third Quarter of 2020.
Restaurants and hotels saw a 79.5 percent increase in sales, while both the sale of general consumer goods and autos and other transportation vehicles rose 22 percent.
The latest labor figures show the total number of jobs in Santa Monica increased from 75,000 last April to 83,045 in June.
Once again hotels and restaurants led in job recovery, with 4,819 new jobs, followed by arts/recreation and entertainment with 891 new jobs.
In-store sales also showed "positive signs" after data from prior quarters "showed high trends in online sales at the expense of in-store purchases," officials said.
"Now, retail is as strong as online sales and hopefully will continue to trend upwards," officials said.
They noted that purchases made direct at a local business -- including those made online but picked up directly -- "generate higher proportion of sales tax revenue directly for the City."
Despite the positive signs of economic recovery, "the overall economy is not at pre-pandemic levels," City officials said.
They note that the City’s recent financial projection included an $188 million loss in revenue over a three-year period.
In addition, City reserves are 59 percent below their pre-pandemic level, and the City’s capital improvement budget has been cut by more than half.
These factors are "all having real impacts on city services," officials said.
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