Forecasters see L.A. lagging behind U.S. in recovery.

In a report entitled "When is 'Pessimism' Realism?," UCLA business forecasters last week warned Californians to keep the hatches battened down against continuing bad economic weather.

The Golden State can expect another year of economic winter before the thaw arrives in the third quarter of 1994, predicted Larry Kimbell, director of the UCLA Business Forecasting Project.

"This long, seemingly unending recession is predicted to be over in the third quarter of 1994. ..." wrote Kimbell in a report released last week.

Unfortunately, the outlook for Angelenos may even be worse. The aerospace industry, concentrated in Los Angeles County, is due for yet more rounds of layoffs.

Looking at the 1993 through 1996 picture, Kimbell predicted, "The only big loser (business sector experiencing employment decreases) is expected to be aerospace, where 43,000 more jobs will be lost, taking this sector down from 229,000 jobs to 186,000, less than half the 1988 level of employment."

Thus, even as California belatedly joins the sluggish national economic recovery, the Los Angeles County regional economy could continue to plagued by industrial shutdowns.

For job hunters, Kimbell also sketched a bleak picture: "How will unemployment be handled in California? A number of people will find it better to leave the state. ... A number of people will get so discouraged they will stop looking for work. A number of other people will accept relatively low-paying, insecure jobs rather than remain unemployed indefinitely. This solves the unemployment problem in the simple statistical sense."

In other predictions, the UCLA forecasters look for flat housing prices in the state through next year, followed by a period in which home prices keep pace with the general rate of inflation.

Some time in the mid- to late-1990s housing prices should modestly best the rate of inflation, said UCLA housing expert Nelson Pedrozo. No boom in house prices is predicted.

There is a silver lining: California house prices are not so outlandish when compared with national averages. "Affordability of housing has improved, especially when compared to the early 1980s. ... Recently, lower home prices reinforce this improvement in California's competitive position," wrote Kimbell.

But housing affordability is not yet opening up the floodgates of demand. Reflecting that, "Housing construction continues to be deeply depressed in California. Building permits, which lead to actual housing starts, have not shown any signs of revival. The data are especially bleak in Los Angeles County," wrote Kimbell.

Nationally, Kimbell predicted a decent if slow economic recovery and low inflation. "Inflation does not appear threatening in this slow-growth environment," the economist wrote.