The declining Southern California economy may bottom out as soon as this summer, but more financial grief is coming as local industries struggle to cope with the recession, a prominent business trade group said in a forecast to be released today.
Economic news this year will be "mostly bad," according to the 2009-10 forecast by the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp. The state's economic downturn is expected to hit bottom before the end of 2009, but when growth resumes it will be moderate at best, the Kyser Center said.
Nonfarm employment in California this year will fall 3%, or 447,500 jobs, while the unemployment rate will average a painful 10.5%, the report said. This region won't be spared.
"The five Southern California metro areas will continue to struggle in 2009," said Jack Kyser, founding economist of the center. "Job losses will continue in construction, manufacturing, retailing and financial services."
Ventura County and the Inland Empire area of Riverside and San Bernardino counties will feel the most pain, each recording declines of 3.2% in employment, the report said. Orange County will see jobs drop 2.9%, while Los Angeles County will record a decline of 2.2%. Employment in San Diego County will be down 1.8%, the report predicted.
Home-building activity in the region is expected to reach new lows, especially in the Inland Empire, where developers are expected to seek building permits for just 6,300 new units in 2009, compared with the recent high of 52,696 units in 2004. Ventura County developers will seek permits for about 800 units, compared with 4,516 units in 2005, the Kyser Center estimated.
At least the aerospace industry should hold steady, which is good news for the local economy. No major changes in federal military spending are expected for the next year or so.
Also, the federal government's $787-billion stimulus package should be positive for the Southern California economy, especially when it comes to spending on infrastructure improvements. However, the effect of that spending won't be felt before the end of the year.