AEROSPACE, BIOTECH MAY GIVE VALLEY A LIFT.

Byline: Gregory J. Wilcox Staff Writer

The San Fernando Valley economy - weakened but not yet in recession - could get help from its aerospace and biotechnology industries, which should fare better than other sectors, says the author of a California State University, Northridge, report to be released today.

The fourth ``Report of Findings on the San Fernando Valley Economy'' is an economic footprint of 2000 and points to a local slowdown that started earlier this year.

While the report is not a forecast, Daniel Blake, a CSUN economics professor and director of the San Fernando Valley Economic Research Center, said in an interview Thursday that the Valley's economy will likely mirror the nation's.

Blake notes that the national economy has been weak since the fourth quarter of 2000 and that the softening intensified in the second quarter of this year.

``We're well enough connected to those national trends that (our)economy has been softening here as well,'' said Blake, who will highlight some of the report's findings today at the Valley Industry and Commerce Association's 13th annual Business Forecast Conference at the Warner Center Marriott.

Forecasters, Blake notes, believe the nation is probably in a recession now and that the economy will probably improve in the first or second quarter of next year.

In the aftermath of the Sept. 11 terrorist attacks, Blake thinks biotech and aerospace companies might even see some growth.

``With the current conflict there will probably be some increase for (those) sectors. The biotech industry that is in the Valley is small but potent. With all the biological terror there could be a lot more activity in labs and research facilities. (But) we don't know how fast that is going to ramp up,'' he said.

CSUN found that 17,742 people worked in the Valley biotech sector last year, about 2.7 percent of the private sector work force. The average annual salary was $51,373.

The study did not delve into the aerospace sector.

Here are some of the report's key findings.

--Private sector employment totaled nearly 657,000 jobs last year, up 0.2 percent. Employment grew 3.5 percent in 1999 and 1.9 percent in 1998.

--Entertainment, one of the Valley's most important and visible sectors, had a 1.5 percent job growth rate last year. While not as large as in 1999 it was still greater than 1997 and 1998 combined.

And the Valley claimed a higher percentage of Los Angeles County's entertainment jobs in 2000 than in any previous year.

--Unemployment claims in the Valley began rising in the second quarter of this year after falling for the past 15 months.

--The stronger growth sectors seem directly tied to housing and residents' spending habits. All related sectors showed good job growth last year, led by a 25.9 increase in nursing and personal care facility jobs.

--Apartment vacancies in the Valley continued to fall in 2000 with the biggest drops in low-income areas. In this year's second quarter the vacancy rate was 2.6 percent. The Valley's rate has fallen further and faster than that of the city as a whole and is now one percentage point lower than the city's.

Tom Gilmore, president of Gilmore and Associates and a member of a panel that will address economic growth today, said housing density will be a key factor in the Valley's economy over the next 20 years.

A tight vacancy rate signals a shortage of multifamily housing.

One solution, Gilmore believes, is mixed-use developments that combine apartments or condominiums with retail and commercial uses.

``A lot of the commercial corridors throughout the Valley are excellent candidates for mixed-use development,'' he said.

Another panel member, Bob Scott, a member of the city Planning Commission and owner of the public policy consulting firm Civic Center Group, said that making sure that Los Angeles maintains a business-friendly personality will be a positive for the economy.

``So far that has not been interrupted and continues with the current commission. So from a planning standpoint you can expect a certain amount of accommodation,'' Scott said.

Commercial real estate, another important part of the Valley's economy, is also softening as vacancy rates rise.

In the second quarter of this year the office vacancy rate was 10.1 percent versus 9.9 percent in the second quarter of last year.

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(color) L.A. Mayor James Hahn discusses airport security in Washington.

Rick Bowmer/Associated Press