Solid Job Growth Forecast for L.A. County’s Economy

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L.A. County’s economy should continue to see solid job growth as outlying areas from Long Beach to the Antelope Valley rack up record levels of employment, according to a mid-year economic forecast released last week by the Los Angeles County Economic Development Corp.


Overall, the county is projected to add about 53,000 jobs in 2006, for a growth rate of 1.3 percent. That should be followed by a 48,000 job gain in 2007, a growth rate of 1.2 percent.


“While the public has been grumpy about the performance of the economy, 2006 will be a very decent year for Southern California,” said Jack Kyser, chief economist for the LAEDC. “It’s a quiet boom.”


The employment levels represent the most robust job growth in L.A. County since the year 2000, and it’s being led by strong performance in areas throughout the county many of which are projected to reach record or multi-year employment highs, according to the LAEDC forecast.


The West San Fernando Valley, the Santa Clarita Valley, the Antelope Valley communities of Lancaster and Palmdale, the San Gabriel Valley and the Westside are all projected to hit record employment levels this year.



Affordable land


The Antelope Valley’s forecast level of 73,000 jobs is the result of considerable economic development in recent years, thanks to an abundant supply of affordable land and housing. Some of this price advantage may be diminishing with assessed land values shooting up more than 20 percent in the past year. But the area is also a center for aerospace-related companies, especially for production of unmanned aerial vehicles.


Housing and new commercial and industrial construction have also driven growth in nearby Santa Clarita, pushing the number of jobs to 84,000 this year. Indeed, the forecast notes, “going counter to trend, the area has even managed a little growth in manufacturing employment.”


In the West San Fernando Valley, employment is projected to reach 291,000, thanks to thriving business and health service sectors. Growth in these areas has more than offset job losses in manufacturing and flat job performance in the motion picture sector.


In the San Gabriel Valley, manufacturing is giving way to an array of other industries, including financial services, construction and retail. These sectors, along with international trade, have combined to push employment to a projected 647,000, an all-time high. While manufacturing remains a strong presence, it has seen job losses and is hampered by an industrial vacancy rate of just 1.9 percent.



Trade juggernaut


Meanwhile, in Long Beach, international trade and tourism have been the forces leading to a projected record of 209,000 jobs. This comes despite continuing losses of aerospace jobs as production of the Boeing 717 commercial jet ended in the second quarter. The area has also seen a revival of its downtown, thanks to an influx of new residential development and a thriving commercial corridor.


Just up the coast, the South Bay/Los Angeles International Airport region could reach a multi-year high in employment this year. The area has been adding jobs since 2002 and could post a 15-year high of 489,000 jobs. That’s still not up to the 547,000 jobs recorded in 1991 as the aerospace industry was collapsing. But aerospace has made a comeback with Northrop Grumman Corp. and other firms adding to their payrolls.


Moving into the gap left by aerospace has been an explosion of trade-related jobs in the transportation and warehousing sectors. This may also help to fill the void that will be left when Nissan Motor Corp. completes the relocation of its corporate headquarters to Nashville, Tenn.


Finally, L.A. County’s Westside is also poised to post a record level of employment at 435,000 jobs. The LAEDC forecast notes this area is a “crazy quilt of economies and business bases,” but that growth is coming primarily from professional and business services, finance, construction and retailing. The average annual salary on the Westside is $60,000, the highest in L.A. County.


However, looming as problems for the Westside are its legendary traffic congestion (some of which might be alleviated by construction of the Exposition light rail line from Downtown to Culver City that begins next year) and opposition to any further residential or commercial development projects.



Inner core lagging


While the areas ringing central Los Angeles have been performing well, there remains a “doughnut hole” in the urban core.


Despite a surge in residential construction and major cultural projects, the downtown L.A. area has remained stagnant in terms of job growth over the last four years, hovering around 445,000 jobs. That’s down from 480,000 in 2002 and 624,000 in 1995. The report attributes this job loss to wide fluctuations in government employment as budget crises have taken their toll and to an unrelenting stream of corporate mergers in the 1990s.


Private sector employment has made somewhat of a comeback downtown, thanks to wholesale trade and business and professional services. But at 205,000 jobs, it’s still down from the peak of 227,000 jobs reached in 1991.


The Crenshaw/Mid-City/Hollywood region has also seen stagnant job performance in recent years. Bright spots have been steady employment growth in Koreatown and in business and professional services. However, manufacturing employment has declined while motion picture and television industry jobs have fluctuated wildly.


Hardest hit of all has been South L.A., which has never completely recovered from the 1992 riots. The forecast notes that “job losses have been seen in most major sectors,” pushing employment to a projected record low of 81,000 jobs this year, down from 96,000 jobs in 1991. South L.A. has seen a steady erosion of manufacturing jobs over the last quarter century, which was one of the key economic factors behind the riots.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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