Region’s 2002 Job Growth to Be Slow

Southern California will experience sluggish job growth for the rest of this year, but the region’s employment pulse should quicken in 2003, according to an economic forecast to be released today by Cal State Long Beach.

Researchers project a recovery across most sectors in the five-county Southern California region, composed of Los Angeles, Orange, Riverside, San Bernardino and Ventura counties. The big exception looks to be manufacturing, which isn’t expected to see a meaningful rebound until 2004, according to economist Lisa Grobar, an associate director of the Office of Economic Research at Cal State Long Beach.

“There are too many negatives” weighing down the manufacturing sector, said Grobar, who expects local factories to continue shedding jobs through late next year.

Among the factors hampering a quick manufacturing recovery are a post-Sept. 11 collapse in commercial aircraft sales that has pounded Southern California’s aerospace industry.

Weak foreign economies and a relatively strong dollar are making it tough for the region’s exporters to find markets for their goods. Meanwhile, cheap imports continue to undercut local makers of apparel, furniture and other consumer goods. Los Angeles County has lost about 25,000 factory jobs over the last 12 months, and even the Inland Empire, a growing manufacturing stronghold, has experienced declines.

Continued manufacturing job losses, coupled with weak job creation in other sectors, will result in regional employment growth of 0.8% this year--only about half of what it was in 2001.

The good news, Grobar says, is that the recent economic slowdown is nothing like the long, deep recession that struck Southern California in the early 1990s. She predicts regional employment growth will accelerate to 1.8% next year, led by gains in construction, services, retail and wholesale trade.

The Inland Empire, the region’s top job generator over the last decade, will continue to lead the pack, thanks to plentiful open space for new factories, offices, stores and housing. The Cal State Long Beach forecast calls for job growth of 3.2% this year in Riverside and San Bernardino counties, increasing to 3.7% in 2003.

“They have room to build ... at lower costs,” Grobar said. The Inland Empire “will continue to be the fastest growing area of our region.”

Perennial laggard L.A. County faces more of a struggle. L.A.’s aerospace industry and apparel-heavy manufacturing base have been hit particularly hard. So has the county’s travel and tourism industry, which is more dependent on international visitors than other California destinations. Cal State Long Beach forecasters predict virtually no job growth in L.A. County this year, and a modest 1.2% gain next year.

Orange County is projected to see employment growth of 1.3% this year, followed by 2.1% growth next year, according to the forecast, while Ventura will see almost flat employment this year, followed by 1.3% job growth next year.