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Asia Crisis May Hit San Gabriel Valley Hard

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

The San Gabriel Valley, which has experienced booming growth in recent years thanks in large part to its burgeoning Asian community, is expected to take the brunt of local shock waves triggered by the economic turmoil in Asia, according to a report released today.

The study by the Los Angeles Economic Development Corp. concluded that the valley is particularly susceptible to the vagaries of the crisis because its vast Asian and Asian American population--the largest in Los Angeles County--has many business ties to the Far East, especially in the import and export of high technology.

The region stretching from Pasadena to Pomona is expected to reach record employment by the end of the year. It is expected to add 15,300 jobs by year's end and surpass by 400 its previous record job level logged in 1990, said Jack Kyser, chief economist for the Employment Development Corp.

However, growth is predicted to slow in 1999 as its large international trade sector suffers from soft consumer markets abroad and a possible drop in the price of exports as a result of a surplus in Asian goods, Kyser said.

The report found that the service industry and trade created the bulk of the region's new jobs. Manufacturing was another important employment generator.

As Southern California emerged from the recession of the early 1990s, these and other sectors in the valley flourished, due in part to the soaring East Asian "tiger" economies. But the financial chaos in Japan, South Korea and other Pacific Rim nations has wrecked consumer appetites overseas for U.S. goods and caused prices for Asian imports to plummet.

A slowdown in the valley's trade sector could have a ripple effect on other industries, especially retailing and real estate, said economist George Huang, who prepared the study with Kyser.

"There are a lot of side effects of the Asia crisis that don't turn up in the official reports," Huang said.

But Bruce Ackerman, president of the San Gabriel Valley Commerce and Cities Consortium, said the lasting impact of the Asian crisis on import-export firms should be minimal.

" I think they will be able to hold up very well because they are small enough to be able to turn on a dime and redirect their efforts to new and different markets," Ackerman said.

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 consortium.

While the valley grapples with economic upheaval abroad, it must also tackle problems closer to home that could be equally detrimental to business. Demand for industrial space in the region is high, but the study found a shortage of high-quality facilities.

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