Local Economic Forecast Sees Apparel Jobs Shrinking
In the latest economic forecast by the Los Angeles County Economic Development Corp., the apparel and textile industries in Los Angeles and Orange County will shed a few hundred jobs this year as more designers manufacture overseas.
In Los Angeles County, the apparel sector will lose 800 jobs to employ 96,700, while Orange County will lose 600 jobs to employ 11,200.
“This sector of the region’s economy has been driven by denim [there is always worry that this segment may have peaked, but it keeps morphing], juniors and the contemporary business,” according to the “2007–08 Economic Forecast and Industry Outlook,” which was released on Feb. 21.
Toward the end of 2006, it looked like the apparel industry’s employment was leveling off. But a slight decline is still expected.
The report warned that the local apparel industry will have to pay more attention to international trade policies coming out of Washington, D.C., because the Democraticcontrolled Congress is more cautious about trade agreements and deals. Consequently, existing supply chains with locally designed apparel made in overseas factories might be affected.
In other areas, the forecast warned that major economic powerhouses such as the movie industry and international trade might experience a slight hiccup in 2007 and 2008. “Two of the region’s signature industries could encounter some rough going,” said Jack Kyser, chief economist at the LAEDC.
The motion-picture industry is at a precarious point because it faces contract negotiations with three key labor unions over the next two years. Negotiations aren’t scheduled until September for the Writers Guild of America contract that expires this October. In June 2008, the contracts expire for the Screen Actors Guild and the Directors Guild of America. Motionpicture workers are poised to ask for compensation for content shown on new channels of communications, such as TV shows transmitted to iPods. There is a risk of a labor strike that would cost the local economy millions if not billions of dollars.
Because of security measures that have increased since the Sept. 11, 2001, terrorist attacks, the international trade sector has been trying to cope with new legislation and rules that make importing goods more cumbersome. Truckers at the area’s seaports in Los Angeles and Long Beach will be required to have a Transportation Worker Identification Credential (TWIC) to get through the terminal gates. Obtaining the card requires a background check. There is concern that many of the area’s independent truckers who pick up the majority of the cargo containers won’t meet the requirements needed to get the cards, because an estimated 20 percent to 30 percent of them are illegal immigrants.
Also, the railroads are at capacity for transporting cargo containers from the West Coast to points east. If importers can’t get their goods onto trains, they may choose to transport them by truck or choose to ship their goods through the Panama Canal and on to the East Coast.
Container volume at the two ports is expected to rise 10.5 percent this year to 17.4 million containers while two-way trade at the Los Angeles Customs District should jump 13.9 percent to $373.8 billion. —Deborah Belgum
