The Southern California economy will chug strongly into 1997, with Los Angeles County providing the only misfiring cylinder as it struggles to regain its pre-recession pace, according to a local jobs promotion group.
In its annual economic forecast released today, the Economic Development Corp. of Los Angeles County said Southern California will enjoy a 2.4% gain in nonfarm employment in 1997, slightly ahead of the 2.3% increase expected for this year. That matches growth statewide and is better than the 1.5% increase expected nationwide next year.
But the local improvement will not be felt equally, said Jack Kyser, chief economist for the economic development group.
Orange, Riverside, San Bernardino and Ventura counties will reach record employment levels in 1997, whereas Los Angeles has yet to
regain all of the jobs lost during the 1990-93 recession, Kyser said.
"Overall, the five-county area is looking real good. You just have a lot of exciting things happening out there," he said.
"But Los Angeles is still a ways away" from attaining the vigor it had before the recession, Kyser said, adding that the San Francisco Bay Area is in the same predicament. "It's interesting that the two largest urban areas in the state are still struggling."
The regional rebound is being pushed by virtually every business sector, including housing and aerospace, Kyser said. In fact, the entertainment industry has grown so fast that future expansion is being constrained because companies can't find specialized workers or enough sound stages for productions, he said.
Although Los Angeles County will post the same 2.4% job growth rate next year as Orange County, "we have a lot farther to go" because Los Angeles lost the most jobs during the recession, Kyser said.
Kyser predicted an average unemployment rate in 1997 of 7.4% for Los Angeles County, down from 7.9% for 1996 and 9.7% at its worst in 1993. Orange County's unemployment rate will be 3.7% in 1997, he said, down from 4.3% in 1996 and 6.7% in 1993.
Some of the biggest challenges for the local and state economies, Kyser said, are mistrust of the rebound by investors outside California, implementation of welfare reform, continuing budget problems for local government and the potential of more turmoil in the financial services sector.
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Total nonfarm employment for the five-county* Southern California region, in millions of jobs:
Note: 1996 figure is estimated; 1997 and '98 figures are projections.
*Los Angeles, Orange, San Bernardino, Riverside and Ventura counties.
Source: Los Angeles Economic Development Corp.