AREA JOBS TO INCREASE IN '03, ANALYSTS SAY.

Byline: Evan Pondel Staff Writer

The five-county Los Angeles area has come through the national recession and the effects of 9-11 in relatively good shape and likely will add 133,500 jobs in 2003, according to a Los Angeles Economic Development Corp. report to be released today.

Strength in home building was among the main contributors to the area's resilience and helped inject an estimated 22,900 jobs into the economy. Renewed growth in international trade and increased defense spending have also bolstered the area.

``The whole region literally escaped a recession that was due to special circumstances,'' said Jack Kyser, chief economist and author of the Los Angeles Economic Development Corp.'s midyear update. ``And it's understood that international trade has been a locomotive for the Los Angeles area.''

But the economy didn't get through 2002 without any signs of wear.

There was little or no growth - a modest 0.3 percent increase in inflation-adjusted gross product. A lingering slump in international trade from 2001 and the entertainment industry's de facto strike also prompted economic pressure.

``By now, though, I think the pain from the strike has been offset by a comeback in motion pictures and defense,'' Kyser said.

Even so, the travel and tourism sector - though showing signs of improvement - continues to experience a significant slowdown. Evidence of of the weakness is echoed in the quarterly statements of many companies.

In the third quarter, Disney's theme parks and resorts division, which includes Disneyland in Anaheim and Walt Disney World in Florida, saw revenue drop by 5 percent, to $1.8 billion, and operating income slump to $467 million, a 17 percent drop. The ongoing slump in Disney's theme park business has spilled over to the fourth quarter with bookings currently down by 10 percent from a year ago.

In August, Six Flags Inc., owner of Six Flags California in Valencia, announced overall attendance had dropped by 11 percent from a year ago - a post-Sept. 11 downturn.

Bucking the trend, officials at Universal Studios Hollywood say attendance is up, although the company suspended releasing numbers in 2001.

Looking ahead, forecasters expect the Los Angeles economy to record a loss of 23,000 jobs in 2002, a decline of 0.6 percent, according to the report. Los Angeles County's unemployment rate should average 6.9 percent in 2002, a 1.2 percent increase from 2001. But in 2003, unemployment should decline to 6.4 percent.

Kyser said job growth should be seen across a large swath of sectors. The defense industry will probably dominate, given several newly awarded contracts for Southern California companies.

A spokesman for Northrop Grumman said last month that the defense company received a three-year, $36.9 million contract to develop a mine-destruction system for the U.S. Navy.

The contract calls for the Century City-based company to produce a rapid airborne mine clearance system that protects the Navy's fleet from near-surface and floating mines. Aside from a revenue boost, the contract establishes Northrop's expertise in this area.

Boeing has also just received an order for 60 more C-17 military cargo planes.

Strength in the defense sector has helped stave off a shaky retail environment. There was an estimated 1.6 percent increase in taxable retail sales in 2001 - a significant decline when compared with the 11.1 percent growth recorded in 2000. In 2002, Los Angeles Economic Development Corp. analysts expect sales to increase 2.1 percent, with a 5.2 percent rise anticipated for 2003.

Driving this advance is the entry of retailer Kohl's into the local marketplace. West Hills, Simi Valley and Moorpark will be among sites in Kohl's big expansion next year into Southern California, a push that could bring the department store to several San Fernando Valley area communities.

However, analysts said Kohl's arrival could pose a problem for other retailers that operate less competitive stores and malls.

Dan Blake, an economics professor at California State University, Northridge, said that, aside from some efficiency problems in the retail sector, he believes productivity will soon exceed the pace of job creation.

``We may be firmly on the road to recovery, but there are certainly areas of weakness - including job creation - that we need to consider.''

To ensure continued vitality in the five-country area, the Los Angeles Economic Development Corp. also released ``The 60 Mile Circle'' report in an attempt to explain the region's broader economic implications. Lee Harrington, the LAEDC's president and chief executive officer, said it is time to shed some light on the economic future of Los Angeles.

``We need to critically protect the quality of our life, and that includes addressing mobility in the city and what will be a stimulus for economic success,'' Harrington said.