Southland Job Gains Expected to Accelerate

Job creation in Southern California will speed up this year and outpace that of the nation, thanks in part to the region’s strong aerospace, international trade, entertainment and tourism sectors, according to an economic forecast to be released this morning.

But key industries -- including apparel and international trade -- face challenges that could hinder growth, the forecast said.

And cost pressures and government regulations seem to be driving more jobs into the “informal” cash economy, where they are not included in official government statistics.

That’s the outlook from the Los Angeles County Economic Development Corp., a business research and support organization.

The forecast, slightly more optimistic than the organization’s previous forecast in July, reflects a view that Southern California will continue to benefit from having several major industries in economic sweet spots.

Southland companies -- which have relied on investments in technology and other productivity enhancements instead of aggressively adding more employees -- will find this year that they simply must hire more to accommodate revenue growth, said LAEDC Chief Economist Jack Kyser.

“They are getting to the point where those investments can’t carry them anymore,” Kyser said.

Accordingly, the LAEDC estimates that Southern California employment will grow 2% this year, versus 0.9% in 2004. By contrast, national job growth will rise 1.6% this year, versus 1% in 2004, the forecast said.

The faster Southland job growth will come even though the region’s overall economic growth is expected to slow this year -- reflecting a more mature economic recovery after the 2001 recession, Kyser said.

Challenges threatening the region’s growth this year include continued transportation bottlenecks and the end of global textile quotas, which could further hurt apparel industry employment, the forecast said.