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Friday, Mar 29, 2024

Measuring Out a Dose or Two of Optimism

We’re an optimistic bunch here in the Valley. We’re also smart and take a long-range view of things. Maybe that’s why those in other parts of L.A. don’t think we’re as cool as they are. The recent San Fernando Valley Economic Forecast released by CSUN showed that area businesspeople were optimistic about the future despite concerns about the current economic downturn. – 38 percent of those responding to a survey said they expected to expand their plant capacity in 2008 while 5 percent expected to contract. Last year, 33 percent expanded. – 60 percent of Valley companies responding expect their gross sales to increase in 2008 compared to 57 percent in 2007. Nearly 24 percent expect level gross sales and 17 percent anticipate lower sales. Most local businesspeople expect heightened or intense competition this year and businesses expect to expand their workforces this year. In fact, the average expected reduction in workforces in 2008 is 8.6 percent compared to 14.3 percent last year. Yes, there are some severe problems in the local economy. Residential real estate is troubled. Home prices have come down at double digit rates and home sales are at new lows. Foreclosures are edging ever higher. Construction permit activity slumped last year. So these troubled conditions in the real estate sector tend to trickle down through the economy. Massive layoffs in the mortgage industry reduce the buying power of those people in that sector and related industries. Some uncertainties cloud things, too. A Screen Actors Guild strike this summer could send a jolt through the economy at a bad time. And of course there are fuel costs. But some experts say the housing sector has hit bottom or is close to it and then will recover. We’ll get through this. Key businesses see long-term growth and are planning for it. This Business Journal tries to be very cautious in jumping on the media bandwagon of doom and gloom that is all too prevalent today. I think our coverage reflects that. You see stories of businesses and sectors of the economy that are doing well and stories about how businesses are getting through this storm. And some stories of optimism. Let us know the good and the bad out there. Business Journal Editor Jason Schaff can be reached at (818) 316-3125 or at [email protected] .

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