ECONOMY PARTLY SUNNY SNAIL'S-PACE GROWTH MEANS NO RECESSION FOR SOUTHLAND, FORECAST SAYS.

Byline: Dana Bartholomew Staff Writer

Southern California will avoid a recession even as the nation's overall economy reels from the impact of the Sept. 11 terrorist attacks, according to an economic forecast to be released today.

The report by the Southern California Association of Governments focuses on the attacks' impact on the local economy. It actually predicts a more optimistic forecast than studies by other groups that were made last month.

Southern California's $600 billion economy, hurt like the rest of the nation's by the attacks, should continue to grow slowly with significant improvement by next summer barring further calamities, the forecast says.

Los Angeles County will fare less well than other counties in the region, with sharp job losses in manufacturing and the tourist industry, but still should show slight growth while most forecasts predict the nation faces a recession.

``In very simple terms, our prediction is the region as a whole will avoid recession, but growth will be significantly slower than in recent years,'' said Lisa Grobar, director of the Economic Forecast Project at California State University, Long Beach, and co-author of the study.

``For Los Angeles County, the outlook is a little less bright: Our forecast calls for L.A. County to avoid recession - but only by degrees.''

Many national studies predict that the nation is in or will soon be in a recession, which is defined as two consecutive quarters of economic decline.

The SCAG forecast sizes up the impact of the Sept. 11 attacks on local trade, air travel, tourism and growth.

Area leaders will discuss the forecast at the Huntington Library in San Marino today during a conference on the attacks' short-term consequences on six Southern California counties: Los Angeles, Ventura, Riverside, San Bernardino, Orange and Imperial.

The SCAG forecast - the only regional outlook on Southern California - includes independent research from CSU Long Beach and CSU Fullerton, along with the state Finance Department.

Among its predictions for Los Angeles County:

--Over the next two years, Los Angeles County job growth will slow to less than 0.5 percent, with losses of 4 percent each year in manufacturing jobs.

--Unemployment in Los Angeles County will rise from 5.7 percent this year to 6.3 percent in 2002, the highest in the region.

--On a brighter note, the federal government will inject billions of dollars into the Los Angeles economy next year - largely in defense and contracts.

Ventura County, which also could lose manufacturing jobs, will fare much better, with job growth predictions between 1.1 percent and 1.6 percent, according to the report.

``The regional forecast is surprisingly good, given the last two months,'' said Anil Puri, dean of the College of Business and Economics at CSU Fullerton and the forecast's other co-author. ``The national economy will recover better than most expect, and the local one will do much better.''

In San Bernardino and Imperial counties, job growth will fall from 3 percent a year to 1 percent through 2004, according to SCAG forecasters.

The terrorist attacks shook California by discouraging tourists, conventioneers and foreign visitors, thereby depressing air travel, hotel lodging and retail sales, according to Howard Roth, principal economist of the state Department of Finance.

Thousands lost their jobs.

Nonetheless, the Golden State economy shines over other states' eroding consumer confidence, declining capital spending and the effect of weak overseas economies.

``California's economy is not at risk of a prolonged, deep recession like the one in the first half of the 1990s,'' said Roth in his report. ``The state's high-tech sector is struggling, but there are few imbalances in the economy.''

While the attacks on the World Trade Center and the Pentagon were enough to push a teetering national economy into recession, economists concluded Southern California will still experience a tangible fallout.

Overall in the region, job growth will fall from 3 percent a year to 1 percent through 2004, according to SCAG forecasters.

While service job growth is expected to hover around 2 percent, growth in retail employment is expected to fall flat through next year. Construction has also slowed, with home prices expected to fall somewhat.

Economists predict a $12.4 billion state budget shortfall will severely impact local school districts and state-funded programs. Cities will also suffer from less sales tax income.

But it is Southern California tourism - worth $13.6 billion a year - which suffered the greatest damage, with out-of-state visitors largely staying home and hotel occupancy rates falling by half.

Full recovery, according to forecasters, could take six months to a year.

``Southern California was doing better than the nation as a whole until 9/11, which knocked the tourist industry into the dump,'' said Jack Kyser, chief economist for the Los Angeles Economic Development Corp., which did not participate in the SCAG forecast.

Contradicting SCAG's prediction, Kyser said he thinks Southern California will bounce through a rocky economy until the new year, with a modest recovery starting about the middle of next year thanks to growth in aerospace, motion pictures and international trade.

Last month, Kyser and economists at the University of California, Los Angeles, Anderson School of Management predicted that Los Angeles would experience its first recession since the Gulf War.

Michael Collins, executive vice president for the Los Angeles Convention and Visitors Bureau, was heartened by today's forecast, but said anything could happen to alter the region's course.

``We're going to have to take this very much one day, one month, at a time,'' he said.