Orange County Economy

Orange County's surging economy will slow next year as the Asian financial crisis tightens the spigot on foreign trade and the national economy weakens. But a building boom will offset some of the damage. That was the outlook presented Thursday by Chapman University economists in their closely watched annual economic forecast. "The sharp growth will plateau out," said Chapman President James Doti, who is also an economist.

Orange County's economy - a standout in Southern California - is expected to accelerate through 2015, as the region's better-than-expected job growth drives the county's housing recovery, according to a UCLA report released Tuesday. Recent revisions from the state's Employment Development Department showed that Orange County gained more jobs than originally estimated. Since February 2012, employers' payrolls grew 2.6%, adding 35,200 net jobs, according to state figures. California payrolls, in comparison, grew 2.1% during the same period.

The opening of Cars Land, the latest expansion for Disney's California Adventure theme park, made headlines in recent days. But the bigger news for Orange County is that tourism employment - one of its biggest economic drivers - has rebounded while other sectors are improving. After shedding thousands of jobs in recent years, the leisure and hospitality sector has regained all positions lost during the economic downturn. Employment in hotels, restaurants, theme parks and other tourism-related businesses last month hit 181,500 jobs.

Bolstered by a strong export market for its high-technology and medical products, Orange County's economy is growing far more rapidly this year than expected, according to a report released Thursday by Chapman University in Orange. In fact, university economists said, they expect the county to end 1994 well into a recovery from the lingering recession that began in 1990.

A year after its bankruptcy filing cast a pall over the region, Orange County has emerged in its best economic shape in years. The prosperity can be read in the bottom line of many companies as well as in personal observations and an accumulation of economic data released in the last few weeks. The county's jobless rate of 4% in December was the lowest in five years and the lowest in Southern California.

The continuing movement of manufacturers out of Orange County is having a more negative impact on the local economy than the loss of defense-related jobs from federal budget cuts, a Chapman College economist said Friday.

With all major indicators heading south and the Asian financial crisis continuing to drag down exports, Orange County's economy will slow significantly next year, Chapman University said Thursday. But a recession is not imminent, and more robust growth in the county should resume by late 1999, Chapman said. "If you look at each one of the major engines of economic growth, they're all turning negative," Chapman President James L. Doti said. "The impact of Asia is obviously a major factor in that."

UC Irvine added $820 million to the Orange County economy in fiscal 1988-89 and was the county's third-largest employer, according to a December report released by the university's financial planning office. The amount is equivalent to supporting 16,400 households with an average family income of $49,916, the report said. One of nine UC campuses, UCI created 7,600 new jobs in the county from July 1, 1988, to June 30, 1989.

This was the year when the 1980s came back to haunt us. Whether the blame lies with the end of the Cold War, the rising national debt or the Los Angeles riots, Orange County's economy suffered. It was a victim of past excesses. The recovery never took hold. Charles H. Keating Jr., former owner of Irvine-based Lincoln Savings & Loan, was sentenced to the maximum: a decade in jail. Glitzy retailers shut down, undercut in a saturated and overbuilt retail market by discount power centers.

Whether the staggering state budget deficit is greater than $20 billion or $30 billion, statewide transportation cuts will add up to about $1.7 billion through the next fiscal year. Chances are excellent that the cuts will jeopardize at least one project in Orange County and the Southern California region that will directly affect daily trips to destinations important to you. This wake-up call is forcing us to look beyond Sacramento to close the transportation financing gap.

Economists who keep careful track of California suddenly are asking what's wrong with Orange County. So is Milt Thomas, owner of Buena Park-based Wire Cut Co., a maker of medical devices and technology equipment whose annual sales have plunged to $4 million from $12 million since April 2001, forcing him to slash his work force by two-thirds and leaving him with just 27 employees.

Orange County's manufacturing slump continued in the second quarter, but there are signs a recovery may be around the corner, according to a new university survey released Tuesday. Factories in the county, dragged down by the high-tech sector, saw further drops in new orders, employment and supplier deliveries in the second quarter, according to Chapman University's quarterly survey. But the pace of decline was slower than earlier this year.

Chapman University economists have become more pessimistic about Orange County's economy, saying Wednesday that employment won't grow as fast as previously expected, a reflection of the national economic slowdown. The midyear update trimmed projected job growth more than 25%, or 14,000 jobs. After earlier predicting annual job growth of 3.5% for the county this year, the economists now see a 2.4% gain, picking up slightly in 2002.

Chapman University economists have become more pessimistic about Orange County's economy, saying Wednesday that employment won't grow as fast as previously expected, a reflection of the national economic slowdown. The midyear update trimmed projected job growth more than 25%, or 14,000 jobs. After earlier predicting annual job growth of 3.5% for the county this year, the economists now say growth should slow to 2.4% this year, picking up slightly in 2002.

Despite a drop-off of visitors at high-end hotels throughout the region, Anaheim's strong convention traffic and the Disneyland Resort expansion helped boost Orange County's overall hotel occupancy in the first three months of the year. A survey of 75 Orange County properties found an overall occupancy rate of almost 72% in the first quarter--up 2% from the same period a year earlier, according to a report by PKF Consulting, the lodging research firm in Los Angeles.

The Orange County economy will slow considerably in the coming year, but lower interest rates and the region's increasingly diversified business sector will cushion the blow, Cal State Fullerton predicted Tuesday. "This economy is made up heavily of small firms," said economist Anil Puri, who presented the school's annual economic forecast. "That is where our strength is."

Like most economists, Walter Hahn has his own way of drawing a picture by connecting the numbers. And the Kenneth Leventhal & Co. economist paints a pleasant portrait of Orange County contrasted with the sketches of some of his counterparts. Unlike Chapman University economists, who foresee a new recession as early as 1996, Hahn predicts a period of fairly healthy growth and development beginning late this year and continuing to the end of the century before a mild recession sets in.

After two years of consistent growth, Orange County's manufacturing activity slowed significantly in the first quarter, with businesses reporting declines in production, new orders and employment, a survey disclosed Monday. The severity of the slump surprised researchers, who were expecting a less pronounced slowdown. "The decline has been over almost all industries," said Raymond Sfeir, an economics professor at Chapman University, which polls Orange County purchasing managers quarterly.

After two years of consistent growth, Orange County's manufacturing activity slowed significantly in the first quarter, with businesses reporting declines in production, new orders and employment, a survey disclosed Monday. The severity of the slump surprised researchers. It was the worst downturn since the Asian financial crisis walloped manufacturers in 1998.