EARTHQUAKE: THE ROAD TO RECOVERY : Economists Revise Their Rattled Outlook : Recovery: A growing number say state recession will end by early next year, despite previous gloom over quake impact.

As the full economic impact of the Northridge earthquake comes slowly into focus, a small but growing number of economists say the temblor will not delay the Southland’s long-awaited recovery for very long and are renewing their forecasts that the regional recession will be over by the start of next year.

Earlier predictions that the Jan. 17 quake would keep Southern California mired in recession well into 1995 are being replaced by more upbeat forecasts that the temblor may delay the recovery by only a month or two. Some forecasts say the economy will turn around as early as this fall.

Economists credit their new optimism to a variety of factors, including the quick repair of the region’s telecommunications network and a relatively fast and effective response by disaster relief agencies.

The full-scale meltdown of the transportation system that some analysts said was imminent never materialized, so most merchants and manufacturers are having little trouble getting the goods and materials needed to stay in business.

“At worst, I think the quake might push back Southern California’s recovery by 60 days, maybe even less,” Jack Kyser, chief economist of the Los Angeles County Economic Development Corp., said Thursday at a breakfast meeting of downtown executives.

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“The score right now is Optimists 1, Doomsayers 0,” he said. “The recovery should still arrive by the end of the year.”

Although Kyser initially worried that the businesses that were closed by the quake could raise the region’s unemployment rate, he now believes the rebuilding effort could create more jobs than the temblor cost.

For example, before the quake, Kyser predicted that employment in the construction industry would be flat this year. But now he says the rebuilding effort should create 10,000 construction jobs, plus nearly 20,000 others in related industries such as engineering and furniture making.

“If there are any silver linings in the clouds, this is one of them,” Kyser said.

Analysts at Los Angeles-based First Interstate Bank are also more confident about the future of the Southland economy than they were immediately after the quake.

“Initially, I thought the improvements we were seeing (before the temblor) were so fragile that the quake was going to push our recovery back farther into next year,” said Adrian Sanchez, the bank’s regional economist. “But L.A. bounced back quickly, and there’s a lot of insurance money and federal help on the way. So I’m sticking to my original forecast: Southern California will be in recovery by early ’95.”

With the region’s infrastructure on the mend, most economists now are more concerned about tourism than transportation. The quake is expected to cost about 9,000 tourism jobs, according to Pannell Kerr Forster, an industry consultant. But most of those jobs have already disappeared, said PKF director Bruce Baltin, and Los Angeles’ $20-billion-a-year tourism industry should return to normal by the end of May.

Officials at the Los Angeles Convention & Visitors Bureau say the industry could rebound even sooner if no more major aftershocks hit.

“Every time there’s a big aftershock, the networks show it on the nightly news, and it erodes visitors’ confidence in our city,” said Gary Sherwin, the bureau’s spokesman. “People see a collapsed apartment in Northridge and they think all of Southern California looks like that.”

Even assuming the best about the earthquake, California’s economy is hardly out of the woods. Standard & Poor’s Corp. on Thursday changed its long-term outlook on the state to “negative” from “stable,” citing dwindling funds and budget deficits. Although S&P; did not mention last month’s quake, California officials have said the disaster caused $13 billion to $20 billion in damage, making it the second-worst natural disaster in U.S. history.

The credit agency said that, with economic recovery in the state now expected to slip to late 1994 or early 1995, balancing the state’s 1995 budget will be difficult. S&P; said California faces pressures from school, welfare and prison needs. The recovery has been hampered by the loss of 868,000 jobs, or 7% of the work force, since 1990. Half those were in defense and 40% were in construction, S&P; said.