Valley Economy Is Showing Its Vitality
Van Nuys businessman Ron Regenstreif doesn’t need a glossy, 100-page report to tell him that the San Fernando Valley economy is emerging steadily from the post-9/11 recession.
He just has to look in his accounting books.
“Business is up, and this will be our biggest growth year in six years,” said the owner of Regency Lighting, a national distributor of illumination products.
This morning in Woodland Hills, the Valley Industry and Commerce Assn. is meeting to hear the statistics that reflect Regenstreif’s firsthand observation -- the sixth annual San Fernando Valley Economic Report.
Unlike last year’s report when most indicators pointed to a dicey economy for the nearly 1.8 million residents of the 290-square-mile plain stretching from Glendale to the east edge of Calabasas, the news is good.
“We’re not totally out of the woods, but we’re certainly on the right path,” said the report’s author, Daniel Blake of Cal State Northridge’s business college. “It looks like a recovery is underway, but it’s not startling in its speed.”
Valley job growth is up, home prices continue to bound forward and the population increased by a net 28,000 residents. Those and other indicators compared favorably with -- and in significant instances outpaced -- county, state and national figures.
In the key area of jobs, for instance, the Valley posted a modest but positive gain of 0.3% in the number of private sector employment positions, while Los Angeles County lost 1.6% and the state declined by 1%.
Data in the report are from the calendar year 2002, but Blake said that quarterly government and private-sector updates suggest that the trends have been holding for 2003.
For Regenstreif, in business for 23 years, the recovery does not seem to have a logical base but he welcomes it just the same. “When I look around the world -- things are blowing up in Iraq, everything’s being made in China -- I’m not sure I can understand the reason for the improvement. Maybe we’re having to get better at what we’re doing, and the past couple of difficult years have given us motivation to do better, starting with 9/11.”
Bruce Ackerman, president of the nonprofit Economic Alliance of the San Fernando Valley, sees another factor prodding the local economy forward.
“It’s because of the diversification of industries we have here,” he said. “We’ve got seven or eight industry groups -- manufacturing, motion pictures, telecommunications, retail trades, hotels and restaurants, health care -- so no one industry controls the entire economy.”
While San Diego depends on tourism, for instance, and the Silicon Valley on high technology, the Valley never reeled as heavily from post-9/11 travel fears or the dot-com turndown. “So the recovery factor has been equally consistent,” said Ackerman, whose organization focuses on job growth and retention.
The report cites two important areas that suffered setbacks, however. The Valley’s two top industries, information (publishing, Internet services, telecommunications) and manufacturing, each lost large numbers of jobs. Information shed about 5,500 of its 92,500 workers, or 6%, and manufacturing dropped nearly 10% of its 83,000-person payroll.
Nonetheless, the overall economic signposts are encouraging, Ackerman said. “This is a lot better than last year, when the numbers were flat, and we think next year will be even better. We’re looking for a 2.5% to 3% growth rate next year,” a figure he termed respectable if not fast-paced.
More businesses leasing building space provided another good omen, Blake said. “Industrial vacancy rates are very low, at 2.6% -- the lowest in the Los Angeles Basin and down from their recent high of 5.5%,” he said. “Nationwide, it’s 8%.” Valley commercial vacancies inched down to 13% after a 2001 recession high of 16%.
As in other areas of California and the nation, home prices continue to spiral upward. In the Valley, the median price -- with half of the homes costing more and half costing less -- rose to $369,000 while the average price climbed to $420,000. Blake expects home price increases to continue, though more slowly, in coming months.
