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HEARD ON THE BEAT / CORPORATE

O.C. Manufacturers Resisting Small Business Slowing Trend

September 24, 1998|JOHN O'DELL | John O'Dell covers major Orange County corporations and manufacturing for The Times. He can be reached at (714) 966-5831 and at john.odell@latimes.com

A new survey by the Los Angeles Times and the USC Marshall School of Business says that a lot of small businesses in Southern California are struggling with flat or declining revenue--a suggestion that after four years of vigorous growth the region's economy is slowing.

At the same time, though, manufacturing employment seems to be on the way up, with Orange County remaining one of the brightest spots.

In July, the state reported the Orange County manufacturers--most of them textbook examples of small businesses (Boeing Co.'s O.C. empire excluded)--employed 233,900 people, up 5.1% from 222,600 a year earlier. By comparison, the service industries, which employ far more people, posted just a 3% hike in total jobs countywide, to 977,300 from 948,500.

Most of the increase in manufacturing was in the instruments, transportation and communications equipment, sheet metal and industrial machinery segments.

Orange County's manufacturing sector recorded its best-ever employment total in 1988, when 254,300 people made their living working for businesses that made things. A six-year economic slump threw ice water on the party, though. By 1995, when the present growth cycle began, the number of manufacturing industry jobs in the county had plunged to 179,000.

Jack Kyser, chief economist for the Los Angeles Economic Development Corp., said manufacturing is growing in Orange County and the rest of the region because it "is not a classic collection of auto assembly facilities or large semiconductor plants. It is an interesting array of activities that can turn out a space satellite, the latest fashion item or a complicated piece of metal fabrication."

Diversity, in other words, equals growth, something those intent on creating single-industry employment centers, a la the Silicon Valley, might keep in mind.

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