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Some Shrinkage in the L.A. Garment Industry

Employment: Cheaper imports are partly to blame in loss of 3,700 jobs in the county's apparel sector. But nationwide, it was worse.

May 12, 1999|STEPHEN GREGORY | SPECIAL TO THE TIMES

Job losses in Los Angeles County's apparel industry accelerated during the first quarter amid stiff competition from cheaper imports and the flight of garment assembly to countries with lower labor costs, according to a report to be released today by local economists.

Roughly 3,700 jobs were lost in garment manufacturing in Los Angeles County from January through March, and the hemorrhaging is expected to continue through the end of the year, the report by the Los Angeles Economic Development Corp. concludes.

The losses have hurt mostly small, private businesses, since roughly 90% of apparel manufacturers in the county employ fewer than 50 people, the report found. Los Angeles County is the focal point of California's apparel manufacturing industry, accounting for 70% of all such jobs in the state.

"Basically this industry is slipping into a danger zone, and we have to sit down and look at what it requires to be more competitive," said economist Jack Kyser, the report's author. The figures were culled from statistics compiled by the state Employment Development Department.

Jobs in the county's $10.6-billion apparel sector began to ebb last year following four years of steady growth in which roughly 19,400 jobs were created. About 1,900 of those were lost by the end of December, the report said, and the leak quickly became a torrent during the first quarter of this year, posting nearly twice as many losses as all of last year.

Ted Gibson, chief economist with the state Department of Finance, said the recent drain could have been a delayed reaction to the U.S. dollar's rising valuation in currency markets last year. A strong dollar, he said, makes imported clothing--especially from countries with weaker currencies--cheaper for American consumers.

The impact of the currency disparities was delayed, he said, because last year's manufacturing orders had been made months in advance.

Kyser agreed that the after-effects of a surging dollar played a significant role in the quarter's cascade of job losses. But he said he thinks the flow has now become a trickle and predicted that only 100 additional jobs would be lost this year.

Despite the losses, Gibson said, the county and state apparel industries still have done better than the national sector, which has suffered major job losses, particularly along the East Coast. According to the U.S. Bureau of Labor Statistics, the overall U.S. apparel industry employed 82,000 fewer workers last month than a year ago.

Still, the local apparel industry must find a way to make itself more competitive to prevent further erosion, said Nitin Bhatt, a garment industry consultant for the USC Business Expansion Network.

Bhatt said buyers are attracted to imported products mostly because of lower prices. He encouraged local manufacturers to "figure out what their customers value outside of cost and how they can add that to their offerings."

Manufacturers in Orange County, however, may not need that advice. Last year, the county posted its eighth straight year of employment growth in apparel manufacturing, Kyser said, and even added 800 new jobs in the first quarter of this year.

Kyser said Orange County's garment sector has been largely shielded from the effects of foreign competition because it caters mostly to the surf-wear and sportswear consumer niches--markets that have been largely untapped by manufacturers abroad.

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