Manufacturers Optimistic, Wary, 2 Surveys Indicate

Times Staff Writer

In fact, according to one report, about 36% of Southern California manufacturers say they are considering moving existing plants and building new facilities outside the region. The firms blamed high labor costs, anti-growth laws and environmental regulations.

"Southern California will continue to be an economic powerhouse," said Daniel Stephan of Location Management Services, a Palo Alto firm that surveyed 1,186 Southland manufacturers. "But for the firms that need to compete on price, they better start thinking about alternatives."

Many of these firms find that they have to relocate in order to compete against lower-cost manufacturers in other parts of the nation and the world. "It gets down to being able to compete," Stephan said.

Stephan notes that of the firms looking to move, 70% said they were considering sites outside of the state, with neighboring Arizona and the Pacific Northwest leading the list. Another popular relocation site was along the Mexican side of the U.S.-Mexico border.

In a much more upbeat report released Monday, executives of more than 90% of 730 manufacturing firms said they expect their companies to be doing as well or better during the next two years than they are now. About 44% said they are looking for a marked improvement, according to the report commissioned by the state Department of Commerce.

California's proximity to Pacific Rim markets played a somewhat to very important role for 72% of the firms. Another 56% said the state has enough trained workers to meet current and future demands.

There was strong support--nearly 66%--for expanding freeway and mass transit systems, and 60% favored a policy of moderate community growth, according to the report, which was conducted by Mark Baldassare & Associates of Irvine.

On the downside, 37% of the firms complained about the cost of complying with environmental laws, and more than 40% said too many agencies are involved.

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