Decline in ’98 Bankruptcies Further Boost to O.C. Image

Orange County isn’t recession-proof, despite the best efforts of business development boosters to make it seem that way.

The county’s diverse business base and high demographic profile has, however, helped it to dodge most of the region’s economic downturns in the past few decades and to recover fairly quickly from the two big recessions that have slammed it since the end of the 1970s.

All that polishes the county’s image as a pretty good place for business, and people, to be.

Now, with unemployment at historic lows--the monthly rate lingers below 3%, well within the range of 0% to 5% that economists consider to be the equal of full employment--comes another plus sign:

While the number of bankruptcy filings nationally and regionally increased slightly in 1998, filings in Orange County dropped by a respectable 5.2%.

The figures, from federal Bankruptcy Court statistician Alan Grenier in Los Angeles, show 16,479 filings in the Santa Ana court last year for business and personal bankruptcies--liquidations and debt reorganizations. That was down from 17,381 in 1997.

Filings in the Southern California district as a whole were up 2.3% for the year, including increases of 6.5% in the Los Angeles court, 3.3% in the Riverside court--which also serves San Bernardino County--and 0.6% in the San Fernando Valley court. The Santa Barbara court, which also serves San Luis Obispo, saw filings drop by 6.3% and was the only court in the region other than Santa Ana to record a decline.

Bankruptcy Court officials don’t offer reasons for the ups and downs--they merely publish the statistics.

But Jack Kyser, chief economist for the Los Angeles Economic Development Corp., suggests that the reason for the local decline is pretty simple. “Orange County’s economy was white-hot in 1998,” easily outpacing local economies in the rest of the region, he said.

That is not without its problems, though. “Now you’ll have all the economic development people from places like Las Vegas and Phoenix showing up and trying to lure away some of the businesses that have been doing so good,” Kyser quipped.