County Economic Report Is Encouraging : Chapman Study Sees Local Jobs Increase, but Outlook Tempered by Stubborn Realities

The power of the recession in Orange County could not be underestimated. How else to explain this solidly Republican terrain’s flirtations in 1992 with Ross Perot and even Bill Clinton? But if we have learned about the soft spots in previously fixed national political stereotypes about the area, we continue to surprise ourselves as the region tries to climb ever so slowly out of trying economic times.

Now comes an encouraging mid-year report from Chapman University, which finds that overseas sales in high-technology products and the medical industry are expected to add 10,000 jobs this year. The result is a more favorable economic outlook for the county than had been forecast at the end of last year. Welcome to Orange County, international crossroad and marketplace.

If there has been an uptick in the wind before now, it also has been tempered at key turns by stubborn realities. There are threats of more layoffs in the aerospace industry, and an impasse continues in Anaheim, where the Walt Disney Co. has put plans for a theme park expansion on hold. Orange County, like the region, has been battered by the recession, and has been especially hurt by a stalled housing market.

Now, the Chapman Center for Economic Research finds hopeful stirrings in the housing industry with appreciable growth in both housing sales and in retail sales. A projected increase in building permit values to $1.9 billion has to be favorable.

However, while the report shares the UCLA Business Forecasting Project’s assessment that the state’s recovery is underway, it also concludes that the recovery is being reined in by short-term interest rate increases and the continuing layoffs in aerospace. The UCLA study found that higher interest rates prompted by the Federal Reserve’s efforts to head off inflation have put a lid on residential building in the state during the first quarter. The Chapman report projects encouragingly that demand for housing in Orange County will result in nearly double the construction of housing units through the decade. However, it too sees recovery affected by interest rates for the state.

This new activity reflects consumer growth, but alas, this can be a fragile thing. The increase in costs for mortgages and other loans can put the lid on California’s and specifically Orange County’s rebound.

But it has to be heartening to find evidence of the county’s stirring international economy, of its economic diversity, and also of the prospect of somewhat better times.