A Show of Strength

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L.A. has just been torn apart.


A just-released report on the local economy by the Milken Institute examines seven planning districts within Los Angeles, from the North San Fernando Valley to the Harbor area. The report, first commissioned by former L.A. Mayor James Hahn, finds an economy that has shifted from manufacturing to service firms and increasing numbers of Angelenos working as part of the informal economy, in which cash-only jobs typically operate outside taxation and regulation.


Not surprisingly, the San Fernando Valley and the Westside appeared more robust than the city’s central region, the Eastside, the harbor area and South L.A.



North San Fernando Valley


The northern half of the Valley, which includes Chatsworth, Northridge and Pacoima, is a hotbed of small, service-oriented firms. From 1992 to 2002, the region had a net job growth of 15,800, or 9 percent. The top five industries by employment: restaurants, hospitals and business services. Colleges and universities and doctors’ offices led the way in job creation between 1992 and 2002, while women’s clothing and department stores were the biggest job losers. New and used car dealerships topped the revenue list, followed by semiconductors and related devices.



South San Fernando Valley


The area which includes Woodland Hills, Encino and Studio City – is dominated by show business. Motion picture and video production created the most jobs between 1992 and 2002 and was the second-largest industry, just behind restaurants. Other major industries: legal services, insurance agents and brokers and doctors’ offices. The South Valley had a net increase of 18,900 jobs, or 8 percent. The biggest job-losing industries were aircraft manufacturing and services allied to motion pictures. Hospital and medical service plans had the highest revenues of any sector, followed by medical offices and clinics and search and navigation equipment.



West Los Angeles


The portion of the city west of Beverly Hills and south to Los Angeles International Airport has the most affluent and well-educated workforce and the economic performance to match. The top industries by total employment were restaurants, legal services and colleges and universities. Between 1992 and 2002, the area had a net job growth of 41,500 jobs or 18 percent. Leading the way were gains in employment in colleges and universities, services related to television broadcasting and motion picture and video production. The biggest job-losing sectors were medical and surgical hospitals and airports and related services. The top revenue generator was petroleum and natural gas production, with $7.5 billion in revenues in 2002 (that’s based mostly on Occidental Petroleum Corp.’s location in Westwood). Next came hotels and motels, followed by aircraft production and securities brokers and dealers.



Central Los Angeles


This zone, stretching out from downtown Los Angeles along Wilshire Boulevard to the Miracle Mile and up through Hollywood, has seen a shift from large financial institutions downtown and in the mid-Wilshire district to smaller service businesses ringing the downtown area. The central area economy was volatile between 1992 and 2002, with a net job gain of 16,500, or 2.6 percent. The biggest job gainers were medical and surgical hospitals, electrical services and restaurants. The biggest job losers were insurance and data processing. The top industries by employment were legal services, restaurants and colleges and universities. Life insurance and other insurance-related services was the biggest revenue producer in 2002, followed closely by motion picture and video production.



East Los Angeles


The area of the city that includes Boyle Heights, Eagle Rock and Silver Lake has a high concentration of small ethnic businesses. The largest industries by employment are colleges and universities, medical and surgical hospitals and miscellaneous business services. Between 1992 and 2002, the area had a net gain of 13,100 jobs, or 15 percent. Topping the list of job gainers were medical and surgical hospitals, freight transportation and related services and restaurants. The biggest job losses came in catalog and mail order houses and commercial printing. The biggest revenue generating industry is variety stores, followed by asphalt paving mixtures and plastic products.



South Los Angeles


The shift from manufacturing has been most pronounced in South L.A., an area that includes West Adams, Leimert Park and Watts. The area’s workforce population of 141,000 in 2002 is virtually unchanged from 10 years earlier. The biggest industry sectors by employment are medical and surgical hospitals, restaurants and miscellaneous business services. Reflecting the difficult economic conditions, only three sectors posted job gains in excess of 1,000: restaurants, religious organizations and individual family services. Women’s clothing makers topped the list of job losses, followed by department stores. The biggest revenue generating industry in 2002 was meatpacking and related products, followed closely by insurance and related services.



Harbor Area


Contrary to its name, trade is not the driving force in the Harbor Planning area, which includes Wilmington and San Pedro. Rather, manufacturing is the dominant sector, with 23 percent of the total of the 119,000 jobs. The largest industries in 2002: motor vehicles, medical and surgical hospitals, restaurants and scrap waste materials. Between 1992 and 2002, the harbor area had a net job gain of 18 percent. The biggest job-gaining industry sectors: medical and surgical hospitals, motor vehicles and scrap waste. The biggest job losses occurred in electrical equipment and supplies, canned and cured seafood and petroleum refining. Motor vehicles made up the biggest revenue-generating industry in 2002, with $10.9 billion in sales. Personal credit institutions came in a distant second and electrical appliances third.

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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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