Industry Outlook

Real estate experts will discuss the outlook for the industry in California at a midyear forecast June 11 at the Beverly Hilton Hotel in Beverly Hills. Hosted by UCLA Extension, the daylong conference will include a report and forecast to be distributed by Grubb & Ellis; featured speaker Kathleen Connell, former California state controller; and remarks by conference chairman William Kamer, partner at the law firm of Cox, Castle & Nicholson.

After debating competing buyout offers, the parent company of the Carl's Jr. hamburger chain said it would be acquired by an affiliate of Apollo Management, spurning an earlier suitor. Apollo's offer is the latest twist for a storied Southern California company that was founded as a Los Angeles hot dog stand in the 1940s by charismatic entrepreneur Carl Karcher. The transaction is significant because it may mark the first in a series of restaurant chain sales, said Randall Hiatt, president of Fessel International Inc., a Costa Mesa-based restaurant industry consulting firm.

Concerns about interest rates, the promise of exports and California's recovering economy will be some of the key factors influencing business in 1995. Here is what key industries can expect. * AEROSPACE: The defense sector will keep shrinking--cutting costs and consolidating--even though Pentagon spending cuts won't be as severe as in recent years. Commercial aircraft firms will slowly begin pulling out of a long tailspin, and prospects remain bright for commercial space ventures. --JAMES F.

Nancy D. Sidhu is chief economist for the Los Angeles County Economic Development Corp., a private research and business development group that prepares economic forecasts of national, regional and local business trends. A former economics professor and corporate planner with Inland Steel Industries in Chicago, Sidhu moved to California in 1987 from the Midwest, first to work at Toyota Motor Sales before joining Bank of America as a senior economist. Sidhu joined the LAEDC in 2000 and eight years later succeeded longtime forecaster Jack Kyser, now the group's founding economist.

HOME BUILDING: Construction in California could surge nearly 20%, to 102,000 new homes and apartments, after a year that was the worst for development since the depths of World War II.

A construction site in Irvine is alive with the sound of the boom years. Workers hammering fresh wood beams shout orders at each other in Spanish. Diesel trucks rumble through newly paved subdivisions. Men with scrolls of construction plans tucked under their arms bark instructions into mobile phones. The cacophony emanating from the Irvine Co.'s newest project -- 685 houses and town homes in the company's Woodbury and Woodbury East developments -- is rare these days. To get the project off the ground, Irvine Co., which typically sells land to builders, is financing the project itself after enlisting six builders to put up the homes for a fee. "All of these people were probably unemployed or underemployed," Thomas G. Veal, Irvine Co.'s vice president for residential marketing, said as he stood on a stack of plywood surveying one of the company's work sites.

You think the economy is sending mixed signals? Just look at the newspaper industry. For every "green shoot" that appears, there's a tumbleweed or two rolling by next door. On the positive side, advertising sales firmed a bit in June at major chains such as Gannett Co. and New York Times Co., enabling those companies to post unexpectedly strong second-quarter profits. Newspaper stocks rallied sharply -- Gannett shares have rocketed 156% since the end of June -- as some investors bet that aggressive cost cutting has positioned the companies for higher profit once the economy rebounds.

Reinsurance companies including Munich Re and Swiss Reinsurance Co., the world's largest, may raise premium rates "across the board" after Hurricane Katrina, insurance ratings firm A.M. Best said. "Katrina has made the prospect for an uplift in reinsurance rates more realistic," A.M. Best senior analyst Miles Trotter said Sunday in Monte Carlo. "Losses for Katrina are ballooning by the day."

EMI Group shares slid Monday after the world's third-largest music company forecast zero growth in its troubled industry this year, even though sales in the United States were on the upswing and losses to online piracy had slowed. The British company, home to such artists as Norah Jones and Radiohead, said it expected the global music market to be flat to down 4% by revenue in the current fiscal year. The company posted a net loss of $130.7 million, swinging from a profit of $368.

The U.S. cruise industry, which bet billions of dollars in ship-building money on expected growth this year and next, now faces tumbling stock values and an estimated 40% to 50% drop in bookings since last week's terrorist attacks. The cruise lines' first response has been price cuts. This week Carnival Corp., the largest line, cut its lowest price for a three-day Carnival cruise from San Pedro to Ensenada by $50, to $249.

Real estate experts will discuss the outlook for the industry in California at a midyear forecast June 11 at the Beverly Hilton Hotel in Beverly Hills. Hosted by UCLA Extension, the daylong conference will include a report and forecast to be distributed by Grubb & Ellis; featured speaker Kathleen Connell, former California state controller; and remarks by conference chairman William Kamer, partner at the law firm of Cox, Castle & Nicholson.

The trucking industry, with few exceptions, took investors on a hair-raising journey during the last year, and analysts see a bumpy ride for the stocks again in 1997. As the overall stock market climbed to new highs in 1996, shares of several major truckers went in the opposite direction as the companies' already weak earnings came under added pressure from rising diesel-fuel prices. As a result, truckers had one of the worst showings of the nearly 100 industry groups tracked by Dow Jones & Co.

California came several years late to the nation's economic recovery party, but the state should be celebrating all through 1997. Here is what key industries will be up to: LABOR: Organized labor, which contributed millions to the reelection campaign of President Clinton and to aid other Democrats in November, will be looking for legislative and regulatory payback in 1997.