Orange County Outpacing L.A. in Creating New Jobs
By RAJIV VYAS
Orange County Business Journal
Orange County is in an odd but fortunate predicament.
As the California and U.S. economies gird for more job losses this year, Orange County is projected to grow its employment base by about 1 percent, an extra 9,000 to 16,000 jobs, depending on who you ask. The gain, albeit small, compares with a tiny 0.1 percent job growth projected for Los Angeles County and comes after four years of OC outpacing the nation, L.A. and the state.
In fact, Orange County hasn’t seen a monthly decline in job growth on an annual basis for the past eight years.
Services, retail and government are pegged to account for the new jobs. Healthcare and defense also are growing, but those gains are offset by losses in technology and industrial goods. Homebuilding and public works are keeping construction workers busy, though not quite enough to temper the falloff in commercial projects.
“We do not have a very high concentration in the sectors that have experienced most of the weakness mainly high tech and manufacturing,” said Esmael Adibi, director and professor of economics at Chapman University. “Most of our jobs are in sectors that did not get hurt construction, finance, real estate, services.”
Outlook dependent on nation
Some caution is in order. Orange County is in the early stages of an economic slowdown and county job growth is slipping on a sequential, monthly basis. Projections of a positive year are based on a predicted national rebound in the second half of 2002. “If the recovery does not take place, we could go wrong on Orange County,” Adibi said.
“We are going to have a significant data revision on Feb. 22,” added Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. “Sectors such as services and wholesale distribution could be revised downwards.”
In a broader sense, Orange County need only look to L.A. to see how fleeting quality of life and economic growth can be. Congestion, crime and high home prices are elements that Orange County already shares with its neighbor to the north. Orange County already has lost companies to the Inland Empire and other less costly locales.
Nonetheless, the county has a history of being able to lure people and companies in certain sectors, even as it loses jobs in others. Call it the quality-of-life factor, some economists say. This could cause more people and companies to move in than out, even during down times.
“People move to Orange County because it remains a very desirable place to live,” said Keitaro Matsuda, a senior economist at Union Bank of California in San Francisco. “Once people move to a place, they create jobs. The job opportunity they create attracts more people.”
The quality-of-life theory supposes that the county is able to draw enough jobs to offset some high-profile losses, and then some. Tech companies, for example, slashed thousands of jobs last year with more cuts to come. San Diego-based Gateway Inc. plans to shutter its Lake Forest plant, which counts about 400 workers.
In the plus column, however, is Ford Motor Co.’s Premier Automotive Group, which recently moved from Detroit to Irvine. In doing so, the Ford unit joins a host of Asian automakers, including Mitsubishi Motor Sales of America Inc. and Hyundai Motor America, which came to Southern California to be near the ports of Los Angeles and Long Beach.
“The lifestyle definitely is good here, and that is attracting a lot of people and companies,” said Gurd-Ulf Krueger, vice president of market research at Irvine-based real estate venture fund Institutional Housing Partners.
Government leads way
One area of job growth is the county’s service and government sectors, which have been playing catch-up to the population growth of the past few years and could be enough to carry the county through a short and shallow national recession.
In the early ’90s, state agencies and local governments employed 105,000 people in the county, or slightly less than 8 percent of the workforce. In 2001, 143,000 people were working in government, or 9.5 percent of the employment base.
This year, Chapman University projects the government sector will outpace the overall economy by growing employment by 1.7 percent or almost 2,300 jobs though state and county budget cuts threaten to undermine that growth.
Retail jobs also are growing. Wal-Mart Stores Inc., Target Corp. and Wisconsin’s Kohl’s Corp. all are adding stores. New retail jobs could account for 20 percent of the projected new jobs.
Several service companies are setting up or expanding Orange County operations. Among them is insurer Balboa Life & Casualty, a unit of Calabasas-based Countrywide Credit Industries Inc., which is expanding in Irvine with plans to grow from 350 to about 500 workers. Another is Wilmington, Del.-based MBNA Corp., which set up its Western U.S. regional office in Aliso Viejo last year.
