Orange County Faces Possible Net Job Loss In Reversal of Trend
By RAJIV VYAS
Orange County Business Journal
Orange County is flirting with its first annual employment decline in nearly a decade.
Economists said the county is on track to lose jobs for the second half of the year, upping the odds that there could be a net loss for the entire year.
“The probability that we would have a negative year is less than 30 percent,” said Esmael Adibi, director of the school of business and economics at Chapman University.
A year of job losses would bring Orange County in line with the state and the nation, which are on track to lose jobs in 2002. A down year would be the county’s first since 1993.
Last year, Chapman forecast that payroll would increase by 1.1 percent, or by about 15,700 jobs. Adibi now says that the area will be lucky to add 7,000 jobs this year.
Last November, California State University, Fullerton projected employment would grow by 1.6 percent, or 23,000 positions.
Anil Puri, Cal State Fullerton’s business school dean, now says the county could narrowly escape a job contraction this year. Puri has revised his 2002 forecast to 3,400 new jobs, a 0.2 percent growth rate. “We ran into Enron and other stuff like a possible war with Iraq,” Puri said.
Cal State Fullerton also forecasts a decline in jobs for the second half.
“Year to date, the non-farm growth rate for OC is 0.48 percent very close to zero,” said Mark Schniepp, director of California Economic Forecast, a Santa Barbara economic consulting firm. “The probability that negative growth would occur this year is small. But it is a possibility.”
The shifting sentiment follows two months of job losses in August and September 4,400 job cuts in all. Whether the county loses jobs for the year hinges on the fourth quarter.
November and December are key months for retail jobs. Last year, retail jobs rose by 5,500 in November, but last year’s retail jobs total was 256,100, a record. If spending fails to pick up for the holidays, there could be a steeper decline in the fourth quarter than in August and September.
“A lot depends on what happens in retail and travel and tourism,” said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. “But the year is going to be very much weaker than anybody had imagined.”
Until recently, retail was one of the area’s strong points, along with government and business services. By contrast, manufacturing has lost jobs for each of the past 18 months.
