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Southland Economy Will Slow, Study Says

October 28, 1998|PATRICE APODACA | TIMES STAFF WRITER

The Southern California economy will slow next year as the Asian financial crisis dampens job growth, but the long-term prospects for the region remain bright, Cal State Fullerton predicted Tuesday.

Employment growth in the area, for example, will dip from 155,500 new jobs, or 2.5%, this year to 122,100, or 1.9%, in 1999, said economist Anil Puri, who presented the school's annual economic forecast. In the four years after that, however, he predicted increases of at least 2.2% annually in the area, which includes Los Angeles, Imperial, Orange, Riverside, San Bernardino and Ventura counties.

The weakest link will be Los Angeles County, where job growth is expected to slow to 1.5% next year and remain below 2% annually through 2003.

Puri said the county's manufacturing sector, particularly businesses that sell durable goods, will be hurt as the national economy weakens. He also said the motion picture industry has stalled, creating a drag on Los Angeles' economy.

The Orange County economy, the strongest in the region, will also slow considerably in the coming year, but a favorable outlook for interest rates and the increased diversity of the county's business sector will cushion the blow.

This year, the number of jobs in the county is expected to increase by 47,300, or 3.8%, about the same as in 1997, Puri said. But next year, employment growth will slow to 29,600 new jobs, a 2.3% gain.

"We're talking only about a slowing," he said. "The long-term trends are positive."

Unless the financial situation in Asia deteriorates significantly, he believes annual job growth in the county will rebound to the 3.2% level from 2000 through 2003.

Orange County draws its resiliency from its diversity, Puri said. That's why job growth has slowed modestly during the last few months and remains at a healthy annual pace, the upper 3% range. By contrast, Silicon Valley, which is far more dependent on high-tech exports, has seen a sharp drop in employment growth to the mid-2% level from more than 6% a year ago, he noted.

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