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Asian Crisis May Hit San Gabriel Valley Hard

September 17, 1998|STEPHEN GREGORY | SPECIAL TO THE TIMES

San Gabriel Valley, which has been a hotbed of economic growth in recent years, is expected to take the brunt of local shock waves unleashed by the worsening Asian economic crisis, according to a report released today by a consortium of cities in the region.

The region stretching from Pasadena to Pomona is expected to reach record employment by the end of the year. However, the region's growth is predicted to slow next year as its large international trade sector suffers from soft consumer markets abroad and as exports experience a possible drop in prices due to a looming surplus in Asian goods, said economist Jack Kyser of the Los Angeles Economic Development Corp., which prepared the report.

The study concluded that the region is particularly susceptible to the vagaries of the crisis because it has many business ties to the Far East, especially in the import and export of high technology. With a total population of 1.77 million, the San Gabriel Valley boasts the county's largest concentration of Asian Americans and and Asian immigrants, the report said.

Despite the region being infected by the "Asian contagion," the report found that the valley will add an estimated 15,300 new jobs by the end of the year, nearly 400 more than previous record employment logged in 1990. In contrast, some studies indicate that job creation in Los Angeles County as a whole is still lagging behind pre-recession highs.

In June, a Berkeley-based economic research firm concluded that the San Gabriel Valley fared better than the rest of the county during the recession of the early 1990s because of the region's diverse range of industries.

Among those industries are service and retail trade, which today's report found are creating the bulk of the region's new jobs. The study also identified manufacturing as another important employment-generator.

While most of these industries are growing, Kyser said they would feel some sting from continued economic turmoil in Asia. Most sectors in the valley flourished as Asian economies soared in the mid-'90s, but the current financial chaos in Japan, Korea and other Pacific Rim nations has wrecked consumer appetites overseas for U.S. goods and caused prices on Asian imports in this country to plummet.

A slowdown in the valley's trade sector will have a ripple effect on other industries in the region, especially retail and real estate, said economist George Huang, who helped prepare the study with Kyser.

The study's release is expected to be the highlight of a conference today on the region's economic future organized by the San Gabriel Valley Commerce and Cities Consortium.

Bruce Ackerman, the consortium's president, said the lasting impact of the Asian crisis on the import-export community in the region should be minimal.

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