Jobs Forecast Painfully Better

The region is expected to continue to lose jobs in the next year, although not at the same rate as in the past several months, and the Santa Clarita Valley will lose more than other areas, economists say. According to the mid-year forecast from the Los Angeles County Economic Development Corp., Santa Clarita and Valencia come up last in expected job loss improvement with a 2.4 percent decline. By comparison, the Antelope Valley will have a 1.1 percent job loss and the San Fernando Valley will have a 0.1 percent loss. The unemployment rate is tied to a still sluggish construction industry that is not building homes and commercial buildings at the rate prior to the recession, said Jack Kyser, a co-author of the mid-year forecast and retired senior economist with the LAEDC. Kyser cautioned that because the Santa Clarita Valley is a small area, any percentage change in job loss will appear to be dramatic. Also, the forecast report is just that – a forecast. “We have to see what happens in the course of the year,” Kyser said. “You have to look at the overall Southern California economy. It is going to be a slow challenging recovery.” That those numbers may change is not news to Jason Crawford, marketing and economic development manager with the City of Santa Clarita. After all, the forecast from a year ago for his city had a job loss rate of 6 percent in the city while the actual number turned out to be 5 percent. That turned out to mean 2,000 more jobs than the LAEDC had predicted, Crawford said. “From our perspective we feel we have a lot of momentum going and we expect to perform better than their expectations for 2010,” Crawford said. The numbers used in the forecast came from employment and wage figures supplied by the state Employment Development Department, employment numbers from 2009 and were aligned with the overall forecast for the county, Kyser said. Slow climb The construction industry will take some time to return to its pre-recession activity. Commercial developers will still find challenges in getting financing and even with mortgages at a low rate, lenders are still being cautious with potential homebuyers, Kyser said. The city does continue to issue permits for home construction and has projects in various stages for medical office buildings, Crawford said. But the big boom for the valley in terms of construction jobs will be when work starts on the Studio at the Ranch, a project by The Walt Disney Co. to add soundstages, production offices and other filmmaking facilities on 56 acres the entertainment conglomerate owns abutting the Antelope Valley (14) Freeway. Disney is still going through the entitlement process with the county, with a hearing on the project possibly taking place at the end of the year or in early 2011. The studio would not begin operating until 2013. When Disney announced the project in October, it said that construction alone would mean 3,000 jobs. “For us, 3,000 is a huge swing,” Crawford said. “When we see things like that it has a huge impact on our percentages.” Decline slows Countywide, nonfarm employment is expected to drop by 1.2 percent this year, a substantial improvement from the 5.9 percent job loss in 2009, according to the forecast. Industries that will see a rise in employment include international trade, tourism, private education, and the entertainment industry. A recovery in the U.S. economy is underway although not everyone can see it, said Nancy Sidhu, chief economist with the LAEDC when the forecast was presented on July 21. The national unemployment rate remains at nearly 10 percent and in the first six months of the year, less than a million new employees have been added to payrolls, she said. “As the economy grows business will have to hire,” Sidhu said. “By next year they’ll be in a position to think about, if not actually, hiring.”