Expect New Jobs in Lower-Pay Fields : Economy: O.C.’s growth will be modest, Cal State Fullerton economists predict.

Orange County employers could add as many as 19,000 jobs to their payrolls next year, economists at Cal State Fullerton said Tuesday, but the growth will not be in the high-paying industries on which this area once depended.

It will be years--perhaps not until 1999--before the county’s economy is spurred by large gains in high-paying employment categories. Such jobs made Orange County’s economic machine seemingly invincible in the 1970s and 1980s, but the new jobs are not likely to be in aerospace and engineering but in the booming biotechnology and medical-device industries.

Meanwhile, there will be growth: University economists predict a 5.5% increase in the gross county product in 1994--to about $76 billion.

That is better than the 3.5% average annual increase in the county’s economic output since 1991, but it is still less than the 7% average increases of the five previous years.

“Things have been coming to us naturally in the past,” said Anil Puri, Cal State Fullerton’s dean of economics and co-director of its economic studies unit. “Now we are going to have to struggle a little bit.”

The biggest job increases predicted for 1994 are in construction, retail and wholesale trade and business services. Sizable job losses are still expected in the already depleted defense and aerospace manufacturing industries.

The challenge facing government and business in the county is to refocus the economy now that construction and defense industries no longer will be able to prop up the entire superstructure.

“We must try to promote local businesses to move into high-growth, high-paying markets, like biotechnology and medical devices,” said Puri, who leads the university’s Institute for Economic and Environmental Studies.

Orange County has “great fundamentals,” including a motivated and well-trained work force, he said, and should emerge fit and healthy from the next two to four years of economic transition.

Puri’s prediction, given to an audience of about 300 business and community leaders Tuesday morning, was similar to one delivered just two weeks ago by a panel of global, national and local economists at an annual county Chamber of Commerce-sponsored economic conference.

But in both cases, the gloom was tempered by the admonition that things could be worse--and are worse in most other areas of Southern California.

The Cal State Fullerton forecast said that while Orange County is subjected to the same pressures as the rest of the southern half of the state, it can no longer be considered just a smaller version of Los Angeles.

“Orange County’s economy has distinctive features which cause it to change somewhat independently of the rest of the region,” Puri said.

While heavy losses in defense industry jobs will continue--Orange County has lost at least 20,000 such jobs since the recession began in July, 1990--the impact will be far less here than in Los Angeles and San Diego counties, he said.

And while Orange County’s unemployment rate should average just under 6% throughout next year, the university predicts that the Southern California jobless rate will be considerably higher at 9.4%. For the first eight months of 1993, Orange County’s jobless rate has averaged 6.4%.

“We think this will happen because employment will grow here, even in construction, and because we are more optimistic than national (economic) forecasters about the growth of international trade,” Puri said.

A recent university study of the proposed North America Free Trade Agreement’s impact in Orange County showed that the county’s economy would post a net gain from passage of the plan, which calls for removing economic constraints at the United States borders with Canada and Mexico.

“Our major trading partners are Mexico, Canada and Japan,” Puri said, “and while Japan still has some economic problems of its own to work out, we think that with trade growth from Canada and Mexico, as well as with Pacific Rim nations and China, we will see some real gains.”

Local businesses must look to those markets, he said, “to develop areas where the county has a competitive edge. That is what will make the difference in the future.”

O.C. Growth Sluggish

Cal State Fullerton’s review of non-agricultural employment shows Orange County growth is sluggish, but in better shape than the rest of he five-county region:

Percent change: 1994 (Projection) Orange County: 1.28% 1994 (Projection) Southern Califrnia: 0.03%

Source: Cal State Fullerton Institute for Economic and Environmental Studies

O.C. Productivity

Orange County’s gross product, the estimated value of all goods and services produced, outpaces the national gross product in terms of annual percentage increase. But Cal State Fullerton says the county’s projected growth in 1994 will be only half that at its peak in the mid-1980s. How the county’s growth compares to the nation: O.C. gross product: 1994 (Projection): 5.49% U.S. gross product: 1994 (Projection): 3.28% Source: Cal State Fullerton Institute for Economic and Environmental Studies

Researched by JANICE L. JONES / Los Angeles Times