New report says tough times in international trade are hurting LA port outlook

The global recession is pushing down demand for products everywhere. That means a slowdown in activity at the ports of Los Angeles and Long Beach. A report out today says the ports are just the first place in the Southland's international trade sector to feel the pain. KPCC's Brian Watt explains.

Brian Watt: The number of goods containers moving through the ports of L.A. and Long Beach dropped 9 percent last year. The report from the Los Angeles Economic Development Corporation says the volume will sink another 13-and-a-half percent this year. Economist Jack Kyser says the decline in imports and exports has robbed the Southland of 54,000 international trade-related jobs in the last two years.

Jack Kyser: And a lot of times, these are well paying jobs. A lot of people they look at the truck drivers and say, "Oh, they don't make much money." And that's true, but there's a lot of other jobs where they do earn a lot of money, and so it has a ripple impact.

Watt: Those jobs don't just include longshore workers. They also belonged to accountants, customs brokers, and logistics managers.

If the ripple starts in the job market at the ports, it spreads to the real estate market in the Inland Empire. Economist Nancy Sidhu says that in Riverside and San Bernardino counties, developers have built a lot of warehouses and distribution centers.

Nancy Sidhu: They were built in anticipation of international trade activity which is not taking place. And so a number of them don't have tenants.

Watt: So alongside a crumbling housing market, what's called the industrial vacancy rate in the Riverside-San Bernardino area has almost tripled – from a little more than 4 percent last year to just under 12 percent now.

Sidhu and Kyser expect port activity to begin a modest recovery next year. But they say that ripple won't reach the Inland Empire for two or three years.