BUILDING OFFSET JOB LOSS UCLA REPORT: LOS ANGELES COUNTY WEATHERED WORST OF RECESSION.

Byline: Barbara Correa Staff Writer

Southern California has withstood the worst of the state's recession with investment in home building and retail development offsetting the loss of 30,000 payroll jobs in the last year, according to the quarterly UCLA Anderson Forecast released Thursday.

And while UCLA's forecast focusing on Southern California predicts county job growth of about 2 percent through 2004, the report's author, Christopher Thornberg, acknowledges that most of that growth will happen toward the end of 2004, with continuing weakness until then.

``There isn't a lot to talk about in Los Angeles because not much has changed. As soon as the rest of the country comes back, we will, too,'' he said.

Among the highlights of the forecast:

--Southern California will add 1 million residents a year and could hit 20 million by 2010.

--About 800 people a day are moving to Los Angeles County, while 560 a day are moving to the Inland Empire, accounting for a much higher proportion of that region's total population.

--New housing unit construction will remain at 6,000 per quarter through 2004.

--Los Angeles County payroll employment will rise to 4.1 million by the end of 2004 from 4 million in April, according to UCLA's data. Trade and services will drive those gains.

--Manufacturing jobs that would return to the region in a recovery will likely be located in Ventura County and the Inland Empire, with the exception of aerospace and apparel.

--Government job growth will drop this year but increase by the second half of 2004, particularly in the education sector.

Home price appreciation, strong housing construction and real estate financing continue to bolster the local economy. Decades-low mortgage rates, swelling populations and short housing supply have kept pressure on home prices and apartment rents, with no sign of abating.

Consequently, the housing construction outlook for Los Angeles County is strong. Building of new housing units will continue at 6,000 per quarter through 2004, the Anderson forecast says. Nonresidential investment will drop to $600 million by the end of this year, before rebounding to $800 million by the end of 2004.

Employment in the entertainment industry has not rebounded as quickly as previously forecast, but there are signs that it is getting back on track.

Overall days of production are back to normal levels of around 7,500 after dropping below 6,000 at the end of 2001. Employment of independent artists and writers has remained stable, while financial and management jobs have been lost.

The region's informal employment base, which includes jobs not picked up in government employer surveys, grew from 7.5 percent of total household employment a year ago to 10 percent now, according to the report.

The gains are concentrated in the health care, social care and educational sectors.

``The extremely low industrial vacancy rates (below 4 percent) speaks to ... people who work in L.A. in entertainment, wholesale trade, independent contractors - that's 400,000 more than are tracked,'' said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. ``Then you have the true underground economy. When times get tough, it does grow. There's tax revenue that all levels of government are missing.''

The forecast authors said that in the short term, gains in informal employment are a positive for the local economy. But they could present trouble long-term because informal incomes tend to be lower and don't offer retirement or health care benefits, setting the public sector up as the future provider of these services to undocumented workers.

Barbara Correa, [phone]

barbara.correa(at)dailynews.com

CAPTION(S):

2 charts

Chart:

(1) Staying afloat

(2) New homes up

SOURCES: Employment Development Dept.; Construction Industry Research Board

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