Orange County’s economy shows signs of a recovery
The opening of Cars Land, the latest expansion for Disney’s California Adventure theme park, made headlines in recent days. But the bigger news for Orange County is that tourism employment — one of its biggest economic drivers — has rebounded while other sectors are improving.
After shedding thousands of jobs in recent years, the leisure and hospitality sector has regained all positions lost during the economic downturn. Employment in hotels, restaurants, theme parks and other tourism-related businesses last month hit 181,500 jobs. That’s the highest amount for May on record, and exceeds the previous peak of 181,400 jobs set in July 2008.
Healthcare is also proving to be a bright spot for Orange County, home to facilities including UC Irvine Medical Center and St. Jude Medical Center in Fullerton. The sector continued to expand through the recession and employment reached an all-time high of 137,500 jobs in April.
More hiring is ahead. Children’s Hospital of Orange County in Orange is finishing a $562-million expansion that includes a new seven-story tower with a pediatric emergency center. It’s looking to add 400 positions to staff that new facility, which when filled would equate to an 18% increase in its workforce, according to Rossedy Anderson, the hospital’s director of employment and volunteer services.
“It’s pretty significant,” Anderson said. “We’re hiring at all different levels, not just licensed clinical professionals.”
Growth in these and other industries is why Orange County had one of the lowest unemployment rates in the state in May, at 7.5%, trailing only the high-tech hotbeds of Marin, San Mateo and San Francisco counties.
Meanwhile, businesses are more confident in their economic outlook.
A survey of Orange County firms conducted by Cal State Fullerton had a jump in its index, rising to 90.7 for the second quarter; two quarters earlier the index was at 46.3. A reading above 50 indicates future growth in the economy.
Orange County “is getting back to a more normal state of affairs,” said Anil Puri, dean of the university’s Mihaylo College of Business and Economics. “We’re not there yet, but making progress.”
Indeed, not all is sunny in Orange County. The county has regained just 27% of the 184,000 jobs lost since employment peaked in October 2006, a good chunk of those in construction, finance and other activities linked to the housing market.
In the midst of the housing bubble, in May 2006, the county’s unemployment rate was just 3.2%.
Economists say Orange County’s recovery has been aided by the area’s economic diversity.
Irvine is home to a cluster of technology, banking and other professional firms, while manufacturers line the 91 Freeway, which cuts through the central part of the county. The county’s tourism sector is anchored by two Disney theme parks in Anaheim and Knott’s Berry Farm in Buena Park, not to mention 42 miles of coastline.
As jobs trickle back, some sectors have made decidedly stronger gains than others. In particular, Orange County’s professional and business services sector has added 12,300 jobs since May 2011, a 5% rise, compared with 1.8% overall job growth in the county over the same period.
An improved labor market has also boosted consumer spending in Orange County, experts said. In April, auto dealers sold 11,468 vehicles — a 12.8% jump compared with the same month last year, according to the most recent data available from the Orange County Automobile Assn.
“It’s a great measure of consumer confidence. People out buying cars is a great sign,” said John Sackrison, the association’s executive director. “People are starting to see the storm’s over and we’re on the path to a good solid recovery.”
At Costa Mesa’s South Coast Plaza, retail sales last year reached $1.4 billion and are projected to increase 10% this year, said Debra Gunn Downing, the shopping center’s executive director of marketing. She added that luxury goods sales have been particularly strong, with several high-end retailers set to open.
Government remains a weak spot, given California’s and local municipalities’ ongoing budget woes. Still, Orange County has shed fewer government jobs than other counties in Southern California.
Orange County has lost 5,800 government jobs since the beginning of 2009, a drop of 3.7%. By comparison, Los Angeles County lost 39,600 government jobs, a 6.5% decline, over the same period.
Economists attributed the discrepancy to a legacy of the county’s crippling bankruptcy in the mid-1990s, as government emerged from that debacle operating more leanly.
“The management structure of the county improved,” Puri said. “That has served the county well. The Board [of Supervisors] is a lot more vigilant about spending. Prudent management on a day-to-day basis has helped them make fewer drastic cuts than some counties have had to make.”
County leaders and economists are still watching for a housing recovery.
Data show that last month, 18.5% of the homes on the resale market were foreclosures, the lowest level since November 2007, according to DataQuick, signaling a possible bottom to median home prices.
And on Tuesday, luxury builder Toll Bros. Inc. announced it would build 2,000 new homes and apartments on a 386-acre site in Lake Forest.
The move signals that the builder is confident there will be demand for homes in the master-planned community, analysts said.
Despite the improved economic picture, some have been left out of the recovery. There still are almost 120,000 unemployed residents in Orange County.
Among them is Sherryl Wiseman, a 67-year-old Huntington Beach woman who has been unemployed since November.
A former architectural designer, she had been working part-time as a restaurant hostess in Westminster. Last week, she left a state One-Stop Career job center in Westminster feeling pessimistic about her job outlook.
“Getting a job like I had, I just don’t think that’s going to be possible,” she said, adding that she thinks her age makes her less attractive to employers. “I just don’t think the economy is turning around that quickly.”
Payrolls need to swell considerably before Orange County can proclaim a recovery, said Wallace Walrod, chief economic advisor at the Orange County Business Council.
“There’s nothing that I see that’s specific to Orange County that troubles me,” Walrod said. “I think the economy is on good footing.... We’re definitely moving in the right direction.”
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