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Wednesday, Jul 24, 2024

County Unemployment May Rise to 12 Percent

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, 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 L.A. 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,” she 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. 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.” L.A. County is the car culture capital of the entire country, she added. “We have 21 auto design studios located in L.A. County alone, no one has more cars than L.A. County and California, so when sales go down the impact is wide and deep,” she said. 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 LA County economy,” she said.

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