L.A. RECOVERY SLOW, SURE 50,000 NEW JOBS EXPECTED IN AREA THIS YEAR.

Byline: Barbara Correa Staff Writer

While Los Angeles can look forward to some modest growth in jobs and construction in the next year, slumping tourism and weakness in manufacturing, motion picture and trade employment threaten to stand in the way of a full recovery.

``The economy is getting back on track slowly but surely,'' said Chris Thornberg, author of the Los Angeles report, the portion of UCLA's Anderson forecast that focuses specifically on the greater L.A. region. ``In terms of recovery, the issue isn't (L.A.'s) strength as much as it is its lack of weaknesses.''

Among the pluses and minuses found in the forecast:

-- 50,000 new jobs this year

-- A 13 percent increase in new building in 2004

-- Rising exports in the next two years

-- Declining office vacancy rates

-- Relaxing home prices as interest rates slowly turn upward. Economists are careful to note they don't foresee a real estate bust.

-- Tourism is expected to remain weak

-- Rents will continue to increase

-- Budget deficits may cause taxes to increase

Local employment in health care, retail trade and professional services is strong, but factors related to external demand will continue to drag on the region, limiting growth to a tepid improvement.

Tourism and business travel to the region, as measured by hotel vacancy rates and passenger traffic through Los Angeles International Airport, remain way down from pre-9-11 levels.

Hotel occupancy has remained at an anemic 67 percent, and LAX traffic is still down a half-million passengers.

The travel industry was depending on driving tourism to shore up those losses, but spiking gas prices are shattering that hope, said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp.

In addition, an acute lack of affordable housing in the region is pressuring rents, which could inhibit growth if businesses find they are unable to house workers, the forecast said.

Film production employment, though steadying following a sharp dip in 2001, won't see any serious improvement, said Thornberg. ``It's not runaway production - it's ranaway production,'' he said. As for something to replace the dot-com craze, ``there is no next big thing,'' Thornberg adds.

There are other issues weighing on the local economy, including the unresolved budget deficit situation, Iraq and skyrocketing workman's compensation insurance premiums, adding to a hostile business environment here, said Kyser.

``These issues are hovering over the state like a vulture,'' he said, adding that he takes comfort in the fact that Los Angeles is in a much better position than its neighbor to the North. ``It'll be a slow recovery here, but it's not going to be the end of the world,'' he said.