Economic Reports & Forecasts 2003-2004 Summary of Changes
The Valley population grew faster than previously reported, especially in the Los Angeles portion of the Valley. LA portion growth averaged 1.8 percent since 2000, instead of 0.6 percent, as previously estimated. Valley population grew by 27,500 people(1.9 percent) in 2002. Over 13,000 of these people came from net in-migration to the Valley, the remainder from natural population increase.
Valley job growth resumed last year after slumping in 2001. Valley private-sector employment notched up 2,000 jobs in 2002 after losing nearly 4,900 jobs in the 2001 recession. The Valley's mild 0.3 percent job growth in 2002 contrasted with prviate sector job losses in L.A. County (-1.6 percent) and California (-1.0 percent). Valley private-sector payroll grew by 1.5 percent in 2002, but its inflation-adjusted real payroll slipped by 1.2 percent relative to 2001. L.A. County's real private sector payroll dropped by 2.6 percent, and California's by 4.5 percent.
The Information industry, home of the important Motion Picture and Sound Recording segment, emerged as the top employer in the Valley with 92,500 jobs and 22 percent of the private sector payroll. Manufacturing was the secord largest industry with 82,900 jobs and 13 percent of the payroll. Both industries lost jobs -- Information shed 6 percent of its jobs and manufacturing dropped nearly 10 percent. Job growth occurred in the Valley's Health Care and Social Assistance industry (10 percent), Finance, Insurance, Real Estate, and Leasing/Rental industry (4.6 percent), Retail Trade (3.5 percent), Biotech (2.7 percent), and Construction (2.5 percent).
Valley Unemployment Insurance (UI) claims hit eight-year highs in mid-2002 and then receded. Adjusting the UI claims for seasonal factors and for extended benefits puts the high point of the claims in the second quarter 2002, with claims largely on the wane but still at elevated post-recession levels.
Bankruptcy filings in the Valley remained fairly stable through the second quarter of 2002. Chapter 11 filings edged down slightly along with Chapter 13 filings while Chapter 7 filings may have edged up slightly in the few months, but overall bankruptcy filings have remained stable.
Industrial vacancy rates fell sharply and commercial vacancy rates dropped after a recession induced climb in 2001-02. Valley industrial vacancy rates fell from a recent high of 5.5 percent to 2.6 percent in second quarter 2003 (the lowest rate in the Los Anageles basin) and campared favorably to the nation's 10 percent industrial vacancy rate. Valley commercial vacancy rates eased to 13 percent from their recession high of 16 percent and compared favorably to the nation's vacancy rate of 16 percent.
Building permits were more or less steady around $300 million per quarter last year. Residential building permits accounted for roughly 60 percent of the total permit value in the last two years, and that percentage is persisting. Multiple family units represent over 70 percent of recent residential units permitted, probably due to the diminishing availability of open space in the Valley.
Home prices continued their steep ascent with median prices rising to $369,000 and average prices close to $420,000 as high-end sales continue to climb. Home sales continued at a new record pace and inventories fell to a 2.1 months supply, down from 2.8 months last year. Home price appreciation also kept notices of default and foreclosures in a downward trend in spite of the recession. Apartment vacancy rates in the Valley remain stuck below 3 percent, signaling an on-going very tight rental market. In response, average rents in large complexes rose 6.3 percent in 2002, and are on course for an annual increase of 8.0 percent in 2003.
Patient days in Valley hospitals remained unchanged in 2002 but hospital costs exceeded revenues for a second year, leaving area hospitals still looking for ways to cut costs and enhance revenues. Valley long-term care facilities experienced a slight growth in patient days, and their revenues exceeded their costs.
Recent Valley tourism and travel activity has been a mixed bag. Airport passenger traffic returned to pre-9/11 levels in the first half of 2003, but hotel occupancy rates remain about 5 percentage points below thieir pre-9/11 average, and inflation-adjusted real room rates are 10 percent below their pre-9/11 levels. Theme park visits for Universal Studios rose to pre-9/11 levels, Disneyland visits grew but not to previous levels while California Adventure visits dropped a bit, Magic Mountain visits also declined, while visits to Knott's Berry Farm rose.
A roundup of Census 2000 data reveals a number of interesting characteristics of Valley residents. They are mobile -- nearly 50 percent changing residence in the last 5 years. Most moved from within the County, but about 6 percent moved from elsewhere in California, 7 percent from another state, and 11 percent from another country. Compared to Los Angeles City and County, more Valley residents have high school diplomas and college degrees, they have higher incomes, more of them are employed and more are self-employed, more of them are over 65 and fewer are under 18, and fewer of Valley residents live in poverty.
Enrollment in Valley public schools grew 4.5 percent in 2002-03, with LAUSD growing the most at 5.7 percent. At the same time, Valley private school enrollment fell 0.4 percent. Nearly all Valley public school districts improved their performance on the Academic Performance Index (API).
Some quality of life measures showed improvements and some did not. Annual air quality statistics continued to improve by most measures but recently ozone levels have crept up, a trend continuing into 2003. Crime rates generally were stable or eased slightly in 2002 for most Valley cities and areas. The new Transportation section shows commute times for the 96 percent who did not work at home, and locations where bus use is greater for the 5 percent of the Valley residents who commute by public means. Freeway traffic congestion did not improve last year.
