The City of Industry’s 3,000 businesses generated roughly $31 billion in sales in 2016, a number that surpasses the gross domestic product of 100 countries, according to statistics released in a new economic report.
If the city of 219 residents made it on to the World Bank’s GDP rankings, Industry would have the 95th largest economy, above Latvia and just shy of Bahrain.
The new economic impact report released by the Emerson Consulting Group and commissioned by Industry says the business-centric city’s wealth creates a ripple effect in Los Angeles County that contributes directly and indirectly more than 209,000 jobs, $19 billion in wages and $52 billion in sales to the region.
“Given the economic inter-connectivity of the City of Industry with the larger Los Angeles community, economic growth and development depends on their mutual prosperity,” the authors wrote in the report.
Cal Poly Pomona professors Sandra Emerson and Carsten Lange conducted the study along with Emerson’s husband, Parker Emerson, the president of the consulting company.
The direct $31 billion in sales and the $10 billion spent on the 67,000 employees working in Industry is only a “fraction of the overall impact” on the local economy, the authors wrote. Industry’s businesses require goods and services from surrounding communities that in turn create additional employment and sales, according to the report.
Industry was incorporated in 1957 for the purpose of helping businesses, and city officials over the decades have stuck to the founders’ vision.
Ben Wong, the executive director for the Industry Manufacturers Council, the city’s chamber of commerce, said Industry’s contributions to its neighbors aren’t always visible or discussed.
“The report shows we have a huge impact on the region,” Wong said. “To have a city like this, it is a real asset.”
The Emerson Consulting Group’s report highlights just how different Industry is from traditional cities. Besides having 13 times more businesses than actual residents, the anomalous city is heavily dependent on wholesalers and manufacturers with little of their budget coming from property taxes, the main revenue source for most cities.
Approximately 63 percent of the sales in Industry in 2016, $19.9 billion, were from wholesale companies. Retail, by comparison, generates $3 billion in sales a year.
On a percentage basis, Industry has 25 percent more wholesalers than Los Angeles County, according to the report.
Those are companies like Golden State Foods, which provides ketchup, hamburger buns and other products to national chains Starbucks, Chick-fil-A, KFC, Taco Bell and others.
Industry operates on a $51 million budget with 63 percent, or $32 million, coming from sales taxes. Only 5 percent comes from property tax.
In interest alone, Industry brought in $9 million generated by its holdings in 2016. That’s almost as much as La Puente, Industry’s 40,000-population neighbor, spent on its entire operations that year.
Industry has faced scrutiny from neighbors and state officials in the last two years. The state controller audited the city and found dangerous flaws in its financial controls. In response, a state senator used threats of legislation to convince officials to hire an independent reform monitor to oversee the city’s fixes.
Since then, Industry’s efforts to build a solar farm on 2,500 acres of land on the edge of Los Angeles, Orange and San Bernardino counties, have drawn sharp criticism from officials in Diamond Bar and Chino Hills, who have tried to stop the sale of the land.
