Slow Growth Expected for the Local Economy
Southern California may have to take a pain pill to cope with the economy this year, but at least it won’t fall into a recession.
The Los Angeles County Economic Development Corp. released its semi-annual look at the local economy on Feb. 20, finding bright spots and dark circles.
For the apparel industry, there will be a few distinct hurdles this year. “It is a mixed outlook,” said Jack Kyser, chief economist for the LAEDC. “You have the sluggishness and slowdown in retail sales. For a lot of manufacturers locally, that means ongoing headaches.”
Kyser notes that there is still some fallout from the merger of the Macy’s department stores with the Robinsons-May stores.
On the positive side, the weak dollar will help Southern California manufacturers and designers sell their brands to international consumers, who find U.S. apparel is now a bargain.
Clothing could be sold to European and Asian stores or to foreign tourists visiting California. “Travel and tourism are some of the strong industries in Southern California right now,” Kyser said. “People coming in from abroad will want to buy something. For retailers who are in hot tourist locations, make sure you have someone who can speak Chinese.”
The economist noted that in December, the U.S. government made it easier for Chinese citizens to obtain tourist visas.
Employment in Los Angeles County’s apparel and textile industry is expected to decline slightly, dropping from 95,400 jobs in 2007 to 93,500 jobs in 2008. Losses will be seen in apparel manufacturing, going from 58,300 in 2007 to 56,800 in 2008. Textile-mill employment should dip from 9,900 in 2007 to 9,600 in 2008.
Overall, Southern California’s economy is marching along two different paths. Housing prices will continue to slide, with sales of new and existing houses moving slowly. This will be especially true in Riverside and San Bernardino counties as well as Orange County.
However, tourism should be a boon for the local economy. In addition, professional, scientific and technical services and international trade are experiencing decent growth. —Deborah Belgum
