Economic Forecast ‘Partly Cloudy’

The economic period ahead will be rocky for some industries and regions, but the depth and diversity of the California and Southern California economies should prevent a recession in the region in 2008-09, according to Los Angeles County Economic Development Corporation forecasts. Jack Kyser, LAEDC’s chief economist, reported the housing industry will continue to slide in price and sales numbers of new and existing homes, according to the “2008-2009 Economic Forecast & Industry Outlook.” Citing the sub-prime mortgage crisis driving that slide, Kyser said in a statement, “The most distress will be in the Riverside-San Bernadino area and Orange County, with the latter being in a ‘spot’ recession as measured by employment, during the first half of 2008.” Kyser said the current “two-track” economy provides a buffer for the region, state and nation. One track, he said, is the housing industry and the adjunct industry and financial sectors that are moving downward. Buoyancy is provided to economy by segments not impacted by the housing market, Kyser said. The year ahead will be affected by eventual benefits from the Federal Reserve money market manipulation and the federal stimulus package. Locally, fallout from the writers strike, the pending Screen Actors Guild negotiations and a coast-wide Longshoreman’s Union contract renewal could shadow the region’s strong tourism draw and good prospects for the professional, scientific and technical services industries, the LAEDC forecast reported. Employment projections for Ventura County may indicate a spot recession due to forecasts of non-farm employment growth of 0.3 percent in 2008 and 1.0 percent in 2009, the LAEDC said.