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Saturday, Mar 2, 2024

Economy Has a Long Road to Recovery, Says LAEDC

The longest running recession since 2002 could have a very slow upturn, according to Carrie Rogers, Vice President of Business Assistance and Development for the Los Angeles Economic Development Corporation. Rogers presented an overview of national, state and Los Angeles County economies during the Valley Industrial Association of Santa Clarita’s Business-to-Business Industry Expo on June 11. While some economists see the current economic downturn as following a ‘V’ pattern, (with a dramatic drop followed by a dramatic recovery), and others insist the economy will follow a ‘U’ pattern, “the LAEDC economists are actually predicting this is to be more of an ‘L’, which means a very sharp decline, and a rather long road to recovery,” Rogers said. The high unemployment rate of 11 percent is especially problematic. “For California and LA County in particular this is the highest unemployment since the 1982 recession, which was one of the worse recessions we’ve had in recent history,” Rogers said. “At LAEDC we believe unemployment is going to rise and continue [to rise] through 2010.” Rogers said unemployment could rise to well above 12 percent through 2010. Most hard hit by the economic downturn in Los Angeles County are the construction, manufacturing and retail trade industries. The economy’s toll on the auto industry is also leaving a deep mark. “We worry about auto dealerships that are downsizing or closing. What concerns us is the challenge entwined to fill that space as auto dealerships are a unique configuration,” Rogers said. “We’re also concerned because auto dealers are very charitable very philanthropic, and with the downturn in the economy we think there will be a deep impact on charities.” A decline in motion picture and TV production in the County has also resulted in billions of dollars lost for the local economy, Rogers said. Out of the 120 feature films that will be developed in 2009, only three will be made in L.A. County this year. The typical cost for production is $70 million per film. “This leaves a potential loss of $8 billion to California and the L.A. County economy,” she said. The number of permits for the production of TV pilots is also down by about 42 percent, Rogers said. Last year only 59 TV pilots were filmed in L.A. compared with 101 in fiscal year 04-05. “That was a net loss of $100 million in the LA County economy,” Rogers said. “This is Hollywood, we’re the entertainment capital of the entire country and we have lost almost all of our filming to other states.” On the upside, the City of Santa Clarita breaks the mold. Santa Clarita has seen an increase of 13 percent in filming days in 2009 compared to last year, growing revenues from $2.2 million in 2008 to $5.4 million in 2009, she said.

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