Chapman Says the Impact From Asia Still May Be Felt

Concerns about the impact of Asia’s problems on Orange County seem to have waned in the past few months as the local economy has continued growing strongly. The job market appears healthier than ever, with the unemployment rate at a remarkably low 2.8% in March.

“People are discounting it,” said Esmael Adibi, director of Chapman University’s Anderson Center for Economic Research. “It looks like some economists are saying the impact is not going to be as serious as they earlier thought.”

But Adibi and some others believe the full effect of Asia’s troubles just hasn’t been felt yet. One reason many people’s fears have abated is that corporate profits have been meeting expectations, yet Adibi noted that those expectations had been lowered in anticipation of declining exports to Asia. What’s more, he said, recent statistics show that growth in manufacturing employment in the county may be slowing.

Chapman is sticking by its earlier forecast that there will be 5,900 fewer new jobs in the county this year as exports to the troubled Asian countries decline by 15%.

“Nothing really has fundamentally changed for those countries yet,” he said. “They’re getting their IMF bailout packages, but they have lower purchasing power, and credit availability is still very tight.”

Adibi is also worried that the International Monetary Fund bailouts will do little to change the policies, regulations and corruption that are stifling reform in many of the hardest-hit countries. Without fundamental reform, he said, the markets in Asia could take a long time to recover.

Patrice Apodaca covers economic issues for The Times. She can be reached at (714) 966-5979 and at patrice.apodaca@latimes.com