In Southland, Recession Has Hit O.C. Hardest : Jobs: Yet the county is better off now than it was during the 1981-82 downturn, Cal State study indicates.

The Orange County economy has been more severely crippled by the recession--now into its 19th month--than that of any other county in Southern California, according to a just-released economic report from Cal State Fullerton.

But despite the relative hardship, Orange County is much better off today than it was during the last recession a decade ago, when a lower job base resulted in unemployment levels nearly twice as high.

Anil K. Puri and Stewart Long, who operate the state-run university’s Institute for Economic and Environmental Studies, say the current recession has had far less impact on the county’s economy--in terms of job losses--than the 16-month recession of 1981-82.

But they also found that Orange County has been hit harder, relatively speaking, than the state as a whole.

“There’s been a lot of talk about consumer confidence levels and how they affect things, and we did this study to see how reality matches up with people’s perceptions,” said Puri, assistant director of the institute.

“What we see is that people are worried because this recession already has lasted longer than the last one and isn’t over yet. And Orange County has had more severe job losses than surrounding counties, so things here are worse when we look at what is happening around us.”

But the numbers don’t support an argument that things are worse now than in the last recession, Puri said.

That finding is likely to come as a shock to many, particularly in the construction and manufacturing industries.

“It’s a surprise to me,” said Jeb Stuart, a Laguna Niguel air quality issues consultant with a broad clientele in construction and manufacturing.

“Most of the people I deal with figure there have been a lot more manufacturing jobs lost this time. I guess we think that things are worse because this is a broader-based recession and that is making people more aware,” he said.

“And in 1981-82 there wasn’t the same concern there is now that it would keep going and could turn into a depression. That,” said Stuart, “is keeping a lid on the optimism that otherwise might help turn things around.”

The numbers compiled by Puri and Long show that while manufacturers trimmed 17,600 jobs from their Orange County payrolls during the 1981-82 recession, for a 7.7% job loss, manufacturing job loss in the county for the first 18 months of the current recession totals 11,900 jobs, for a 4.7% decline.

In real numbers, however, the construction industry has been hit as hard this time as in the last recession.

The percentages differ because there were fewer total construction jobs a decade ago, but the net job losses of 12,800 in the current recession and 12,900 in 1981-82 are almost identical.

Kenneth Ackbarali, senior economist for First Interstate Bank in Los Angeles, said there are several additional reasons why the recession’s impact is worse in Orange County than in other areas of Southern California.

“It is a major area for tourism, which gets hit when families’ discretionary income falls, as it does in a recession,” he said. “And it is a major center for retail shopping. There are so many retail shopping plazas in Orange County that I suspect the impact of declining sales generally was accentuated there, especially declining sales of higher-priced items.”

Finally, he said, “the presence of several very large aerospace employers and lots of small companies that supply them helps explain why, relative to surrounding counties, Orange County got hit real hard.”

Compounding matters, said Puri, is the fact that Orange County’s vaunted service economy is no longer growing at the blistering pace set in the 1970s and ‘80s and can no longer make up in a recession for the jobs lost in construction and manufacturing.

To measure the relative severity of this recession, the Cal State Fullerton economists used state Employment Development Department job tallies--the count of jobs located within individual counties--rather than unemployment rates, which measure the number of county residents who have lost jobs but do not indicate where those jobs were located.

Orange County employers, Puri said, slashed a total of 20,300 jobs from their payrolls between the official start of this recession in July, 1990, and the end of 1991--the last month for which job figures are available. That still left 1.2 million jobs in Orange County on Dec. 31, compared to 851,000 jobs in November, 1982, the end of the last recession.

In contrast, businesses in Los Angeles County had only 9,000 fewer jobs on Dec. 31--the net result of new jobs created minus those lost--than when the recession began. And employment in San Diego County was down by 7,900.

The number of jobs in Riverside and San Bernardino counties at the end of December was 30,200 higher than in July, 1990.

A decade ago, Orange County job losses were almost the same--20,000. But Los Angeles County employers had collectively slashed 132,200 jobs from their payrolls, the Inland Empire had a net loss of 500 positions and San Diego employment had grown by 2,000.

A “severity index” constructed by Puri and Long shows that job losses in Orange County so far in the current recession are 35% worse than the statewide average but were 161% worse than the statewide average in the 1981-82 recession.

“There are several very real reasons why people feel this recession is so bad,” Puri said.

“For one, the service sector is a bigger percentage of the total employment in Orange County than it was in 1981-82, and there have been quite a few layoffs in the service industries.”

That makes the job losses more widespread than in 1981-82, when they were concentrated in manufacturing and construction, “so there is more widespread discussion of the recession these days,” Puri said.

“It seems to me that this has been a middle-class recession, affecting people with good, mid-level jobs.”

* MANY FEEL THE HURT: Recession is affecting even those keeping their jobs. D1

County Recession: Bad, but 1982 Was Worse

The current recession has hit employment in Orange County far more severely than in Los Angeles, San Diego and the Inland Empire. But things aren’t as bad as in the 1981-82 recession. Los Angeles County suffered the most in job losses in the previous recession. A look at the job loss index, which compares the counties’ job losses to the state’s.

JOB LOSS INDEX: The index measures relative job losses in the state. California was assigned an index rating of -1.00.

Net Loss in Jobs

Orange County leads Southern California region in net job loss in the current recession.

Orange County Close-Up

Industries with the greatest job losses between July 1990 and Dec. 1991: Construction: -18.0% City Government: -8.7% Mining: -8.3% Federal government: -7.9% High Technology**: -5.3% Manufacturing: -4.7% ** This is a composite of several manufacturing categories and includes job losses already reported for manufacturing.

Source: Institute for Economic and Environmental Studies, Cal State Fullerton