Population growth in L.A. County is slowing as more people move to the Inland Empire, yet the more broadly defined Los Angeles metropolitan area is still the biggest growth engine in the country, according to a new report on international demographic trends.

The report from KPMG International’s Australia division said that L.A. County added 77,000 residents between July 2003 and June 2004, for a growth rate of 0.8 percent. That was down from 97,000 people added during the previous year, a growth rate of 1 percent.

The slowdown pushed L.A. County down from first place to third place in absolute population growth, behind Arizona’s Maricopa County (home to Phoenix) and Riverside County.

Meanwhile, driven by lower housing costs and plentiful jobs, Riverside and San Bernardino counties combined for a total population increase of 148,000, or 4.1 percent, from July 2003 to June 2004, the report said.

The Inland Empire’s growth was the major reason why the five-county L.A. metropolitan region including L.A., Orange, Riverside, San Bernardino and Ventura counties added 260,000 people from July 2003 through June 2004, more than double any other metropolitan area in the U.S.

Population growth is a key economic barometer for the region because it drives demand for new housing and services for new residents, the report’s authors said. It’s an especially big driver for the real estate industry.

“If you’re in the real estate industry, either as a developer or providing services to the industry, then L.A. is the place you want to be,” said Bernard Salt, report author and partner in KPMG’s property division in Melbourne. “You have access to what is by far the biggest population gaining region in the country.”

Salt said that the Inland Empire’s siphoning off of population growth might prompt some land developers to shift operations there. But other providers to the real estate sector including building materials, home furnishings and financial services can remain in L.A. County while serving the entire region.

Nationwide, the report found that 19 of the fastest growing counties in the U.S. between July 2003 and July 2004 were located in the Sun Belt states of Florida, Georgia, Texas, Arizona and California. Meanwhile, 16 of the 20 counties with the biggest declines in population were in the Northeast.

KPMG International publishes the demographic trends report once a year.