Forecast: Cloudy Job Horizon : Study Says Ventura County Can Expect Faint Recovery by End of Decade, but Largely in Services

The statewide economic recovery is sputtering in Ventura County, where high-paying manufacturing jobs continue to dwindle, and the forecast for job growth this decade is modest at best, according to a recent study by the UC Santa Barbara Economic Forecast Project.

There has been a net loss of 6,600 jobs in Ventura County since 1990, according to the report, assembled by a team of researchers and graduate students at the university. The study’s most optimistic forecast predicts the number of jobs in the county may return to pre-recession levels by 1997, with new jobs emerging in the business services and health care industries.

But more restrained projections indicate employment growth will be meager, with the total number of jobs in Ventura County at the end of the decade approaching 256,000, about 9,000 more than in 1990. That pace would represent a significant departure from the booming job growth of the last decade, when 40,000 jobs were created in the county between 1986 and 1990.

“Most of the (economic) decline is probably behind us,” said Mark Schniepp, director of the Forecast Project. But the recovery through the remainder of the decade in Ventura County is bound to be faint, “almost to the point that you don’t even notice it’s occurring,” Schniepp said.

The failure of the recovery to gain traction in the county is largely due to the collapse of the durable manufacturing sector, which traditionally has accounted for more than one-fifth of the county’s high-income jobs, Schniepp said. Durable-goods manufacturers in Ventura County include computer and software makers, as well as aerospace sub-contractors.

About 3,000 durable-goods manufacturing jobs have vanished in the county since 1990, when employment in the industry peaked at almost 25,000, the report said. The trend may continue, Schniepp wrote, “as firms defect to other states where less regulation exists and more tax, housing and infrastructure benefits are frequently offered.”

Meanwhile, the county must nurse painful economic wounds inflicted by the departure of firms such as Abex Aerospace, which employed about 1,000 workers at its Oxnard plant in the late 1980s. Workers there manufactured hydraulic pumps used to power airplane flight controls and landing gear. But the contraction of the aerospace industry caught up with the company, based in Kalamazoo, Mich., and the 33-year-old Oxnard plant was closed in December. About 50 employees were retained at other sites, a company official said, and all that remains in Ventura County is a 14-person sales office in Camarillo.

Because of such layoffs, many formerly highly paid residents have departed for economically healthier climates in states such as Colorado and Nevada. For the first time since 1948, more people moved out of Ventura County in 1993 than into the county, the report said.

Such demographic shifts have contributed to the decline of per capita income in Ventura County, which adjusted for inflation, fell from $22,830 in 1990 to $21,119 in 1993, the report said. Retail sales have also suffered, and the deposit base among local banks and S&Ls; has contracted 8% in the two-year period ending June 30, 1993, the report said.

Property damage in Ventura County from the Jan. 17 Northridge earthquake totaled $850 million, the report said.

Repair work, funded in part by insurance coverage or various federal and state aid packages, is expected to provide a short-term economic stimulus, but rebuilding with borrowed monies will reduce future spending.

“The net long-term effect of the earthquake is very likely to be negative,” Schniepp wrote.

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Despite the gloomy prospects, Schniepp identified several signs of life in the county.

The housing market is experiencing “boom-like conditions,” with home sales in the first quarter up 54% compared to the first three months of 1993, as home shoppers who formerly put off purchases have rushed to beat rising interest rates, Schniepp wrote.

In May, home sales also rose 33% over the same month last year, according to Dataquick Information Systems. But the trend is not expected to continue unless job growth quickens, Schniepp said.

The report forecasts long-term job growth in the health care industry.

“As the massive boomer generation ages and transitions toward retirement, the demand for health care services will rise, and probably dramatically,” Schniepp wrote.

A shining example of the potential Schniepp describes is Ventura-based Meditech Health Services.

The company was started in 1987 as a temporary nursing service, providing trained employees to understaffed area hospitals, said owner and president Sharon Bick.

The company has since expanded to provide home health care service, and its roster of temporary employees swelled from 200 at the end of 1987 to 400 this year.

Bick said she expects 20% business growth in 1994 and total revenues of about $4 million.

But not all medical firms are growing.

About 100 positions were eliminated when Oxnard-based St. John’s Regional Medical Center merged with Pleasant Valley Hospital in Camarillo in February, 1993, spokeswoman Rita Schumacher said.

“We have no plans for further cutbacks,” Schumacher said. “But there won’t be a move toward hiring a lot of employees over the next couple of years.”

Business services, ranging from office security to data processing, are also likely to lead any job expansion in the county, the report said, as larger companies continue to replace permanent employees, and sometimes whole departments, by contracting with outside firms.

The UC Santa Barbara study is based on a model and assumptions used by the widely watched UCLA Business Forecasting Project.