Job Growth in O.C. Exceeds Estimates

Providing fresh evidence that Orange County is one of the major forces behind California’s remarkable rebound, a new government report shows the county’s red-hot economy created even more jobs last year than previously estimated.

The number of people working in the county is now estimated to have grown by a stunning 3.8% in 1997, to 1.23 million, the state Employment Development Department said in releasing its annual revisions.

One of the biggest upward adjustments recorded by any county in the state, the new figure was a full percentage point higher than the preliminary estimate of a 2.8% gain and the strongest growth in county payrolls in a decade.

“That is spectacular,” said Jack Kyser, chief economist at the Economic Development Corp. of Los Angeles County. “There is tremendous momentum in this economy.”

The growth was fueled largely by resurging construction and manufacturing sectors. Economists were cheered in particular by a jump in high-tech manufacturing, an export-oriented industry that provides a strong bulwark for the economy because of its mostly high-paying jobs.

Esmael Adibi, director of Chapman University’s Anderson Center for Economic Research, said the revised figures confirm what was generally believed but hadn’t yet shown up in the official data--that the county’s economy was growing faster than previous reports indicated and was outpacing even the most optimistic forecasts made earlier in 1997.

Indeed, the county’s economy gained momentum throughout the year, going from a 2.8% rate of growth in new jobs in the first quarter to 4.4% in the fourth quarter.

“We are a large economy, a very diverse economy. We have highly skilled workers, and a concentration of a bunch of firms,” Adibi said. “We’re a main factor now in the growth of California’s economy, and our growth rate now will probably exceed that of Northern California.”

The news followed Friday’s report by the Employment Development Department that showed the California economy created 479,800 jobs last year, more than 100,000 more than previously estimated and the most since 1984. Analysts said the revised state data showed strong growth in a wide range of industries, including the retail and wholesale sectors, manufacturing, finance and software.

The revised state and county data are based on an annual audit in which the employment department gathers additional information on start-ups, small companies and other businesses that are difficult to track on a monthly basis.

One reason Orange County’s upward revision was so large is the area has a large number of these small, fast-growing high-tech and entrepreneurial firms, said Ted Gibson, chief economist at the state Department of Finance.

Also on Monday, the state reported that despite post-holiday cutbacks by retailers and the service sector, Orange County’s labor market remained healthy in January, with virtually every industry showing significant employment gains from a year earlier.

Total January nonfarm employment swelled by 62,300 jobs from a year earlier, an impressive 5.3% increase, as manufacturing, construction and service firms expanded. The number of workers was down slightly from December, and the unemployment rate rose to 3.1% from a revised 2.6% the month before.

But Orange County’s jobless rate is not seasonally adjusted, and an increase after the holidays is typical. The county still enjoys one of the lowest unemployment rates in the state, and the lowest by far in Southern California.

“This is an economy that is surging at the moment,” said Mark Zandi, chief economist at Regional Financial Associates in West Chester, Pa. “Anyone who wants to work is working.”

Job growth in the county is so robust, Zandi said, that he expects the unemployment rate to resume its descent, possibly reaching the mid-2% range by summer.

The financial crisis in Asia, a large export market for the county, remains a concern, and by the end of the year it probably will be a drag on the economy, Zandi noted. But so far it has helped rather than hurt many businesses and consumers by keeping interest rates and prices low.

The January report showed that manufacturing added 13,300 jobs in the last year, a 6.2% increase, and remained about even with December at a total of 227,300 workers.

Services were ahead by 17,100 jobs since the start of 1997, led by an increase of 6,900, or 6.9%, in business services. Construction employment was up by 6,900 jobs, or 13.1%, in the past year.

Adibi cautioned that January’s big increase from a year earlier was unsustainable and might be revised downward later on. He also warned that negative effects from Asia’s troubles will no doubt surface before long, leading to more tempered growth for all of 1998.

“But,” said the state’s Gibson, “we’re now coming off such a huge year for growth, even if you’re talking about slowing, you’re still talking about a good year for growth.”

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Job Machine

Total nonfarm employment in Orange County jumped 5.3% in 1997, paced by a huge increase in construction jobs. Here’s the growth in the major job sectors:

Construction: 13.3%

Manufacturing: 6.2%

Wholesale trade: 5.6%

Finance*: 5.3%

Services: 4.8%

Service producing**: 4.6%

Retail trade: 3.9%

Government: 3.1%

Total nonfarm: 5.3%

* Includes insurance and real estate

** Includes transportation, public utilities, electric/gas/sanitation services etc.

Source: State Employment Development Department