Job Market in Valley Surged, New Study Says

Turning in a stronger performance than Los Angeles County as a whole, payroll for private sector jobs in the San Fernando Valley grew by 7% between 1998 and 1999, to $25.3 billion, according to a Cal State Northridge report being released today.

By comparison, private sector payroll countywide grew by just over 5% in the same period, according to the report by the school’s San Fernando Valley Economic Research Center.

In the Valley, the number of private sector workers grew by about 4%, to about 657,000, while job growth countywide was up less than 2%.

Those figures contrast with the comparisons for 1998, when the Valley trailed the county in both private sector job growth and the increase in payroll.

The overall report shows continued strength for the Valley’s economy, with dips in the number of bankruptcy filings and unemployment claims, and gains in home prices and the value of planned industrial construction.

“The good news is that the economy has been so resilient,” said Shirley Svorny, author of the report. “People who were concerned about the Valley can look at these numbers and see that there don’t seem to be any constraints on growth.”

The report, which is to be presented at today’s annual business forecast conference of the Valley Industry & Commerce Assn., also further illustrates the effect of the entertainment industry in the region. That one sector accounts for more than 99,000 jobs--more than banking, insurance, real estate and general manufacturing combined, the CSUN report showed.

More than 45% of the private sector workers in the Valley region--a wide swath stretching from Glendale to the Ventura County line and north to Sylmar--work in service-sector jobs, according to the report. And nearly half of the services workers are in entertainment.

“What you have going on in the Valley is the growth of the motion picture industry,” said Jack Kyser, chief economist for the Los Angeles Economic Development Corp., who is expected to present his forecast for 2001 at the conference.

“Employment in the industry is at all-time record levels.”

He said that even with so-called runaway production and the six-month strike by members of the Screen Actors Guild, the entertainment industry still added jobs.

“Number one, you have more productions for cable channels and for the new networks,” Kyser said. “All of a sudden you have new ways of delivering your product.

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Also, he said, studios are “ramping up production in anticipation of a possible strike next year.” Contracts for the Writers Guild of America and SAG expire next year, and the industry is bracing for possible job actions.

In addition to employment growth in entertainment, Kyser and others said the Valley has seen an increase in jobs along the high-tech corridor that parallels the Ventura Freeway. About 7.8% of Valley workers are in technology-based manufacturing, roughly the same as the 7.7% countywide.

Next to mining, which employs very few Valley workers, technology-based manufacturing offers its workers the biggest paychecks--$44,466 per year on average. That is more than twice the $20,232 paid to retail workers, the report said. About 17% of their workers in both the Valley and county are in retailing.

In other positive signs for the Valley, both Chapter 7 and Chapter 13 bankruptcy filings were down in 1999, the report showed, after rising steadily between 1996 and 1998.

And both the CSUN study and the Los Angeles Economic Development Corp. forecast showed generally lower vacancy rates for office space in the Valley. The LAEDC report put the Valley rate at 11.7% as of June, one of the lowest levels in a decade and lower than the 13% listed for the county as a whole.

Both the county and the Valley had industrial vacancy rates of 5.2% at the end of the second quarter, according to the LAEDC report.

In response to the space crunch in the industrial market, developers took out permits for projects valued at $40.7 million in 1999, the CSUN report showed. That’s a construction pace not seen since the mid-1980s, according to the report.

“We’ve seen an uptick in individual permits,” said Ben Bartolotto, research director at the Burbank-based Construction Industry Research Board. “The manufacturing sector is coming back. We haven’t seen a lot of industrial building until a year ago.”

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Pointing to the snug industrial vacancy rates and lack of past building, Bartolotto attributed the current boom to pent-up demand and the continued growth of tech.

Although Kyser referred to 2000 as “an all-time great year” for the Valley economy, he said the region will face challenges in 2001. He cited continued concerns about work force quality, the lack of expansion space for businesses and a possible loss of tourism dollars as Disney opens its new theme park.

His report predicts 2% job growth for the Valley for 2000, dipping slightly to 1.7% for 2001.

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Economic portrait

Employment in the private sector has grown in Los Angeles County and the San Fernando Valley, with the latter having larger percentage gains in 1999.

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Private Sector Employment, 1999

Services (including entertainment): 45.17%

Retail Trade: 17.30%

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Manufacturing:

14.96%

Finance, Insurance, and Real Estate: 7.70%

Wholesale Trade: 5.68%

Construction: 4.49%

Transportation, Communication, and Utilities: 3.79%

Other: 0.91%

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Source: Employment Development Department