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Thursday, Mar 28, 2024

Study: Valley Economy Holds Steady

The San Fernando Valley economy’s growth since 2004 will likely ebb slightly over the next two years as manufacturing jobs decline and the housing market stumbles, according to a study of the region made public Friday. The San Fernando Valley Economic Report, prepared by the California State University Northridge San Fernando Valley Research Center, found that the Valley’s economy grew at healthy rates over the past two years but will face a slowdown in 2008. The Valley created 1.9 percent more jobs in 2005 than a year prior, surpassing the county in job growth. Earnings also increased 3.2 percent, the report found. One industry heavily contributing to that expansion is the entertainment business, which continues to register as the Valley’s most visible export, said Center Director Dan Blake. “It’s a very important industry to us in the Valley,” Blake said. “But the Valley is also important to them.” Entertainment-related jobs increased 2.2 percent in 2005, with payrolls increasing 5.4 percent to an average of $80,300 a year, the report said. The healthcare industry has also grown, with a 5.4 increase in health-related jobs in 2005. With 80,000 employees, healthcare is the third largest employer in the Valley. Those numbers could be cut short, however, as hospital operating costs continue to skyrocket and outstrip revenues, as it has for the past five years. Another sector facing loses was manufacturing, which has grappled with increased competition from overseas. Nominal wages increased 2.2 percent in 2005, but high inflation reversed the gain and pushed real wages down by 2.1 percent, the report found. The report also pointed to some concern in the construction industry, which produced more jobs in 2004 and 2005. “It’s been a proud recipient of the real estate boom,” Blake said. That could change, however, as the real estate industry repositions itself. One clear sign: the number of homeowners with notices of default are on the rise. “We see them going up,” Blake said. “This is a sign of distress.” The 48-page report was released at the Valley Industry and Commerce Association’s Business Forecast Conference, an all-day seminar at the Universal Sheraton hotel Friday. It also gave wide-ranging predictions on biotechnology, banking, air transport and retail, all of which are poised to see growth in coming years. Jack Kyser, chief economist for the Los Angeles Economic Development Corp., said the Valley’s economic climate mirrors that of the region: strong but slowing. “Most major industries are in growth mode,” he said, “but there are signs of a slowdown.”

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