Job growth and unemployment ride the waves of boom and bust.

Job growth and unemployment ride the waves of boom and bust 

Heavily dependent on real estate construction, the Inland Empire economy has been hard hit by the recession - new housing projects have been cut almost in half and the unemployment rate has soared to 9.7 percent.

But at the same time unemployment climbed, the San Bernardino-Riverside County metropolitan area boasted the second greatest job growth in the nation. And the jobs-housing imbalance - the number of jobs in the county compared to the number of residents - has fallen to its lowest level ever.

"We have a higher unemployment rate than the rest of the state. ... It's been slower because we're suffering from the real estate slump," said Robert Pollin, an economist at UC Riverside. "The single biggest source of growth in the Inland Empire was real estate development in the 1980s."

In the first six months of 1991, construction of single-family and multi-family units plunged 57 percent from the year before, according to the Burbank-based Construction Industry Research Board.

Only 8,414 permits for new housing were issued for the San Bernardino-Riverside metropolitan area in the first half of this year as compared to 19,546 for the same period last year, according to the research. In the first six months of 1990, the Inland Empire far and away was the leading California market for homebuilding with Los Angeles County a distant second, with 15,420 units.

Construction and manufacturing were the economy's weakest job sectors, said John Husing, an economist with the Inland Empire Economic Council.

June construction employment was at 60,900, up 2,000 from May, he said. At the worst point last year, 12,000 construction jobs were lost, Husing said.

Lewis Homes, an Upland-based residential developer which has built between 15,000 and 20,000 homes in the Inland Empire in the last 30 years, laid off 20 percent of its 800 employees in the winter, said President Richard Lewis. The company, which is building 2,500 rather than its usual 3,000 homes this year, is now hiring, he said.

For the first time in 10 years, the County of Riverside is not only not hiring its normal additional 1,000 employees a year, but it's considering cutting 200 county jobs, said Chris Papesh, county finance director. Part of the county's problems stem from the real estate industry downturn, Papesh said.

Already this past year, 100 employees in the building department were laid off to compensate for revenues that declined by $10 million, Papesh said.

But there is good news to temper the bad in the Inland Empire, Husing said. The San Bernardino-Riverside metropolitan area is the only California market which registered high job growth "all the way through the recession," he said.

The Inland Empire, with 29,800 jobs, had the second greatest job growth in the nation between first-quarter 1990 and first-quarter 1991, according to a study by M/PF Research Inc., a Dallas Based firm. Houston ranked first and Phoenix third in the survey.

The services, government and trade sectors were responsible for generating most of the job growth, according to the survey. Even though there is strong growth, the number of new jobs was only half what was added to the Inland Empire economy the year before, the survey noted.

Another positive piece of news is that the jobs-housing imbalance is at its lowest level ever at about 202,400, Husing said. The number represents the 789,700 jobs in the Inland Empire and 992,400 Inland Empire residents with jobs in June 1991, Husing said.

Still, many working residents of the Inland Empire are employed somewhere else and clogging freeways, he said. "The largest segment out here is people who commute to L.A. and Orange counties for work," Husing said.

He added that he believes part of the Inland Empire's high unemployment is "a piece of L.A. and Orange county problems showing up in the Inland Empire."

Like its sister counties, the San Bernardino-Riverside area had its own problems due to cuts in the nation's defense budget.

The Rancho Cucamonga-based Air Defense Division of General Dynamics Corp., which employed 7,800 in Pomona and Rancho Cucamonga last August, has laid off 2,600 employees in the past year, said Jim Gilkerson, company spokesman. General Dynamics recently has put two buildings totaling 600,000 square feet and 75 acres of land at the Rancho Cucamonga plant up for sale, he added.

The layoffs and plant downsizing were in response to reductions in orders for the RAM and Stinger missile systems. Based on the defense budget currently working its way through Congress, company officials project that layoffs will continue in the coming year, although "the quantity of layoffs will depend on contract awards," Gilkerson said.

Defense budget cutting also led to a decision to shut down Norton Air Force Base in San Bernardino in 1994. The base closure will mean the loss of 12,000 jobs.

That will hurt the economy, but Husing said he expects a lot of job replacement to take place. The loss of 12,000 military jobs is comparable to the loss of 9,000 civilian jobs, since military personnel tend to spend their income on the base, he said.

Already job replacement is taking place.

By the end of October, the Lockheed Commercial Aircraft Center will be fully operational, with a workforce of 400 on Norton Air Force Base, said Richard Crail, assistant general manager of the new Lockheed division. Employment is expected to reach about 1,000 by 1995, he said.

The center's opening represents the first time that private enterprise which is not producing a military product is working on a U.S. Air Force base.

The site that will be used for the operation consists of four hangars and a workshop area, and Lockheed is in the process of refurbishing Air Force hangars, Crail said. A major component in choosing the site is that the hangars are large enough to completely enclose a 747 aircraft, he noted.

"It allows us to enter into the commercial maintenance business without having to build a new facility," Crail said.

The Inland Empire's skilled labor pool as well as local officials' plans to turn the base into a commercial airport are other attractive features of the site, he said.

Lockheed does not yet have any customers for the facility but is in contact with airlines and companies that lease aircraft to airlines, Crail said. "We don't have any firm customers yet, partly because of the volatility of the airline industry," he said.

Another area of future employment growth in the Inland Empire is health care, according to Boyd Bauer, Inland Empire regional director of the Hospital Council of Southern California. In the last three years, two hospitals, the Menifee Valley Medical Center and the Marino Valley Medical Center, have been built in South Riverside County, said Bauer. In addition, three new hospitals are planned for San Bernardino County.

The new hospital plans are "very unusual given in this day and age reimbursement for (health care) providers is so unavailable," Bauer said. "But dramatic population growth tends to offset that risk."

PHOTO : Housing: Construction gets cut almost by half