A new LAEDC report finds employment growth in healthcare, business services and biopharmaceuticals, while entertainment, aerospace and apparel lost jobs. Here’s what business owners should take from those changes.
You run a cleaning company, and one of your biggest customers starts cutting back. Or you supply materials to a manufacturer that’s suddenly ordering less.
Your own business hasn’t changed much. You’re still providing the same service, doing the same work and trying to keep your employees busy.
But something around you has changed.
A new report from the Los Angeles County Economic Development Corporation (LAEDC) helps explain why some local businesses may be seeing more activity while others face a tougher market.
Released October 21, the report identifies industries that gained and lost jobs during 2025.
Healthcare, business services and biopharmaceuticals gained employment. Entertainment, aerospace and apparel lost jobs.
For Los Angeles small-business owners, these changes matter because their customers may depend on industries they don’t work in directly.
The opportunity is to understand where demand might be changing before making decisions about customers, contracts or expansion.
Where jobs are growing in Los Angeles
LAEDC’s 2026 Industry Clusters Report examines employment, wages and competitive strengths across 23 industry clusters.
Among the industries reporting employment gains in 2025 were business services, healthcare and biopharmaceuticals.
These are different kinds of businesses, but they all rely on goods and services provided by other companies.
Think about a medical office. Beyond doctors and nurses, it may need equipment maintenance, cleaning, technology support, supplies and administrative services.
A laboratory or professional services firm may also purchase products and services from outside vendors.
For a small company looking for new customers, those relationships could be worth exploring.
But growing employment doesn’t tell you whether those organizations are spending more with independent suppliers.
They may already have long-term contracts, handle certain work internally or require specialized qualifications.
Before investing money to serve a growing industry, an owner needs to find out what potential customers are actually buying.
Where Los Angeles is losing jobs
The report also identifies employment declines in entertainment, aerospace and apparel.
These industries have helped shape Los Angeles’ economy for decades. Their reach extends well beyond the companies that directly employ workers.
Consider a transportation company serving entertainment productions. When customers have fewer projects, they may need fewer deliveries.
A small manufacturer supplying apparel businesses could face a similar problem if orders slow.
These examples illustrate how changes in a major industry can reach smaller companies. The LAEDC report does not establish that every supplier in those industries experienced a decline.
That’s why owners should pay attention to their own customer relationships alongside regional employment trends.
If several customers in the same industry are ordering less, postponing projects or renegotiating contracts, it may be time to examine how dependent the business has become on that market.
Something else; Los Angeles’ uneven job growth and the loss of higher-paying work, another reminder that headline job numbers don’t tell the whole economic story.
A growing industry doesn’t guarantee new business
Suppose you own a cleaning company and see that healthcare employment is expanding.
You start thinking about serving medical offices.
That could be worth investigating. But before hiring more employees or buying equipment, you’ll need answers to some practical questions.
Do medical offices in your area hire outside cleaning companies? What insurance, training or cleaning standards do they require? How much do they pay? Who already has their contracts?
Then come your own numbers.
How much would you spend on labor, transportation, equipment and supplies? Would the contract bring in enough money to cover those costs and leave a reasonable profit?
The same thinking applies to supplying laboratories, working with professional offices or pursuing contracts in other industries.
An industry can be growing without creating a profitable opening for your particular business.
The important question is whether you can find customers who need what you offer and are willing to pay enough to make the work worthwhile.
Five questions to ask before changing your business plans
You don’t need to become an economist to make use of the new report.
Start with what you already know about your customers.
1. Which industries pay your bills? Look at where your revenue comes from. Are most of your customers connected to the same industry?
2. Are their buying habits changing? Review orders, contract renewals and customer conversations. Are people buying more, less or differently?
3. Where might new customers be? Identify businesses in other industries that could use what you already sell.
4. What would it cost to serve them? Consider additional equipment, training, insurance, transportation and other expenses.
5. Can you test demand first? Talk with potential buyers or pursue a smaller project before making a major investment.
You can follow broader trends through California’s Employment Development Department, which publishes employment figures by industry and geographic area.
Use that information alongside your own sales records and conversations with customers.
What the changing economy means for your next decision
Los Angeles isn’t growing or shrinking evenly.
Some industries are adding jobs while others are losing them. Businesses connected to those industries may experience very different conditions.
That doesn’t mean every company serving a growing industry will succeed, or that every business tied to a declining one is in trouble.
It means understanding your customers’ industries has become another important part of running your business.
Before expanding, switching markets or making a major purchase, find out where demand exists and whether your company can serve it profitably.
The new report can tell you where Los Angeles’ economy is changing. Your customers and your numbers will help you decide what to do about it.
