The Los Angeles Economic Development Corporation issued its semi-annual forecast for Southern California today. It predicts substantial job losses for the region this year, as almost every industry struggles with the continuing recession.KPCC's Frank Stoltze reports.
Frank Stoltze: At the Marriott Hotel in Downtown Los Angeles, hundreds of businessmen and women crowded into a conference room hoping to get a better picture of where the regional economy's headed. Nancy Sidhu of the L.A. Economic Development Corporation gave it to them on a giant overhead screen.
Nancy Sidhu: See that gray area? That's the recession period. And see that big, long arrow pointing down? That's the first quarter.
Stoltze: Sidhu said Los Angeles County will lose 90,000 jobs this year... Orange County 43,000... The Inland Empire 40,000... as the construction, retail, manufacturing, finance, and tourism industries falter.
Unemployment will hit 11-and-a-half percent in the Inland Empire, hard-hit by the foreclosure crisis. Robert Kleinhenz is with the California Association of Realtors.
Robert Kleinhenz: We still have to deal with a wave of foreclosures that we think will peak a little bit later on this year. It's really at that point in time that would be the earliest point that we would expect to see home prices stabilize.
Stoltze: Note that Kleinhenz said that would be the earliest point. It could happen later. Economists predicted that job losses would continue through next year, but at a slower pace as the housing market stabilizes and the federal stimulus package kicks in.
Economist Jack Kyser said the health care and private education industries will fare better than others... private education because laid-off workers are going back to school. He also pointed to the defense aerospace industry as one of the economy's few bright spots.
Jack Kyser: We are hoping for more orders for the C-17 made by Boeing down in Long Beach – important for us – 5,000 direct jobs in Long Beach. But also the industry has an aging workforce, and people looking for jobs, look at aerospace, because a lot of their workforce is getting ready to retire.
Stoltze: Carsten Baumann works at Wet, a San Fernando Valley company that designs and manufactures waterfalls for malls and hotels. He left the forecast with more questions than answers.
Carsten Baumann: How long is it – the economic downturn? Where are we in that – are we halfway through, are we two thirds into it? When does the economy turn around? What will the stimulus package do to individual businesses?
Stoltze: Baumann's company employs 400 people. So far it's avoided laying any of them off.
Bauman: We are cautiously – how should I say this? Realistic with a hopeful optimistic outlook.
Stoltze: Economist Nancy Sidhu was less than reassuring as she warned that her own forecast could change at any minute amid rapidly changing economic circumstances. She said the state's multi-billion dollar budget shortfall doesn't help as government workers face layoffs – and local municipalities deal with declining revenues. To individuals, she offered this advice:
Sidhu: Be very, very clear about your own position. Some people work in industries that are at risk. Retail is such an industry. Those people should make sure to save.
Stoltze: Sidhu also noted that everything's cheaper now – from clothing to cars to houses – and that if you're in a good financial position, you ought to consider buying.