Survey: O.C. Businesses Like What They See in the Future

By JOHN O’DELL

May 9, 1996 12 AM PT

TIMES STAFF WRITER

IRVINE —

The economic recovery that many of the county’s large employers began feeling last year has trickled down into the tens of thousands of small businesses that make the local economy work, an ambitious new survey shows.

Although concerned about government regulation, workers’ compensation costs and the general state of the economy, only about 5% of the businesses in the county are considering moving to other locations in the next three years and only two in a thousand say they are likely to close their doors for economic or other reasons.

In contrast, 43% say they are in the midst of moderate or significant growth cycles and 35% say they are holding steady after five years of economic recession, researchers for the combined community college districts of Orange County said in announcing the results of a nine-month effort to survey almost half of the 92,000 businesses located here.

The survey adds a new voice to the chorus singing of a resurgence of Southern California’s once mighty economy.

“This provides an extremely positive view of the economy,” said Nick Kremer dean of economic development at Irvine Valley College. “Businesses are saying they are doing well and most are talking in terms of expansion and adding new jobs.”

A total of 3,685 businesses responded--the largest sample ever reported by a county-based economic survey. More than 80% of the survey respondents classified themselves as small businesses with fewer than 25 employees.

The survey’s general economic findings closely echo those of UC Irvine’s widely followed Orange County Executive Survey, which was released in February. But the UCI survey this year was based on responses from just under 300 businesses, and 60% of them had more than 50 employees.

The similarities underscore a general agreement by executives in all types and sizes of businesses in the county that things are looking up.

The UCI survey, for example, found that only 4% of local businesses planned to move out of the county, and 83% said their financial position was either holding steady or strengthening because of an improving economy.

In one jarring note of similarity, the community college survey found--as did UCI--that 22% of county businesses expect 1996 to be a year of decline. The community college respondents said they anticipated a drop in business activity generally while the UCI respondents said they expected either payrolls or sales revenue to shrink.

That “should strike an alarm,” the community college survey researchers wrote. The range of “declining” companies found in similar studies last year in Northern and Central California and north Los Angeles County was 11% to 19%.

The implication is that while on the mend, Orange County’s economy still has some weak areas that need attention.

Asked what their needs are, 20% of the survey respondents say they considered government financial incentives and grants--for labor training, plant improvement and tax relief--to be important to their continued success and 12% said that city governments should give local businesses preference on service and supply contracts.

The 52-page Report of the Orange County Business Retention and Economic Advancement Project was sponsored by the eight community colleges and four community college districts of Orange County and co-sponsored by 23 local cities, private businesses and business service and job training agencies.

The community colleges, chartered to help produce a well-trained work force for the state, intend to use data in the survey to help develop educational and job training programs that meet employers’ needs, Kremer said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Growth Environment

A survey of more than 3,600 Orange County businesses reveals a majority holding steady or experiencing growth in business activity. The survey also indicates sales and services will lead other industries in job production for the next three to five years:

Rate of Business Activity

Moderately expanding: 36.7%

Holding steady: 35.5%

Declining: 21.7%

Greatly expanding: 6.1%

Occupation / Jobs to be added:

Food/beverage preparation and service: 1,724

Sales of services: 1,597

Sales of commodities: 1,398

Miscellaneous sales: 1,330

Building and related services: 1,137

Electrical assembly and repair: 812