Job growth in the entertainment industry is expected to slow both statewide and in L.A. County next year as runaway production, piracy and declining audiences take their toll, according to a new study of the local film industry by the Los Angeles Economic Development Corp.

The LAEDC study, released Tuesday, shows statewide entertainment industry job growth slowing to 2.7 percent in 2006 from an estimated 3.9 percent in 2005 and a robust 12.7 percent in 2004. While the study does not break out the job growth figures for L.A. County, it does point out the county has more than 80 percent of the state’s entertainment industry employment.

“There will be job growth in the entertainment industry in 2005, but will it continue in the following years? That’s the big question,” said Jack Kyser, chief economist with the LAEDC and the chief author of the report.

The study cites state Employment Development Department and U.S. Department of Labor figures showing 136,000 full-time payroll jobs in the entertainment industry in L.A. County in 2004. When factoring in contract and part-time workers, along with workers in other industries that spend part of their time on entertainment projects (like computer programmers), that total expands to 249,000.

Statewide, the industry generated $34 billion in economic activity in 2002, according to U.S. Census Bureau figures.

According to the study, 2004 was the best year this decade for payroll job growth as the industry rebounded from recession and a threatened strike. Since then, several factors have emerged that the LAEDC says are slowing job growth:

• Runaway production, especially to other states;
• Loss of the young male market segment to video games and other pursuits;
• Slowdown in growth of DVD sales;
• Piracy, which eats into studio profits;
• Aggressive union tactics that could result in more threatened strikes;
• Industry mergers and acquisitions.

The study says that despite the acquisition of several major locally-based studios by multinational conglomerates in recent years, the physical presence of the entertainment industry in the L.A. area has actually been increasing. One example: $1.7 billion in major leases or construction projects in Southern California since 2001.

The study also says that unless major steps are taken to boost state and local incentives for the film industry, the migration of industry jobs to other states will continue to grow.