Economic Reports & Forecasts 2005-2006 Summary of Changes
Job growth strengthened in the San Fernando Valley as the private sector added 11,800 workers to its employment rolls in 2004. The Valley's 1.8 percent private-sector job growth compared very favorably to its own 2003 growth of 1.2 percent and to the 2004 job growth in Los Angeles County 's (1.0 percent) and California (1.3 percent). Valley private-sector payrolls increased by $1.9 billion and average earnings increased by almost $2,000, but inflation ate half the increase in payroll and three-quarters of the increase in average pay.
Valley industries with strong job growth in 2004 include Construction (8.0 percent), Management, Support, & Administration (5.3 percent), Retail Trade (3.7 percent), and Accommodations and Food Services (3.5 percent). Weaker employment performances were turned in by Finance, Insurance, Real Estate & Leasing (-2.9 percent) and Manufacturing (-2.8 percent), although the latter performed better than last year when it lost 4.2 percent of its jobs. The Industry Focus section headlines the star-quality job growth in the Valley's Entertainment industry at 3.3 percent, and even more stellar growth in its payroll with 7.3 percent. The Valley's fledgling Biotech industry lost a few workers (1.0 percent) but added an impressive 9.3 percent to its payroll.
Consistent with the impressive job growth, the Valley's unemployment insurance (UI) claims continued to fall from their recession highs. Seasonally adjusted UI claims now stand just above their lowest levels in the Valley's 1995-2000 recovery period. Bankruptcy filings in the San Fernando Valley Division also continued to edge downward except for an early 2005 spike in Chapter 7 filings induced by congressional legislation that tightened restrictions on the types of debt than could be discharged by selected Chapter 7 filings.
Commercial vacancy rates in the Valley ratcheted downward, dropping more than 2 percentage points to register below 10 percent in second quarter 2005, compared to the nation's average of nearly 15 percent. The Valley's industrial vacancy rate notched down to 2.5 percent from its 3 percent level last year, consistent with the very tight industrial space market in Los Angeles .
Total construction permit activity continued its upward march led by increasing residential permit values with non-residential permit activity following in the first half of 2005. New construction dominated the increase in residential permit activity with residential alterations and additions contributing to the increase. In non-residential activity, both new construction and alterations and additions played strong roles in its recent increase.
Home prices continued their steep ascent with median prices rising to $600,000 in July 2005, but annual appreciation rates slowed noticeably from last year's mid 20 percent to low 30 percent range. The Valley's inventory is up from its record lows in 2004 but remain below normal. Foreclosures continued to fall as double-digit appreciation in home prices conferred more equity on homeowners, solving most of their liquidity problems. Notices of default remained low in spite of an uptick. Valley apartment vacancy rates edged upward and rental rate increases moderated, rising less than 5 percent annually in striking contrast to home price appreciation rates to the relief of many Valley apartment dwellers.
The Valley lost 2 hospitals and over 200 hospital beds in 2004 but occupied beds fell by half that number, pushing their occupancy rate up. Valley hospitals added 2.3 percent to operating revenues in 2004 but their costs rose by 4.1 percent, pushing them further from their goal of a positive operating profit. Undoubtedly, the four consecutive years of Valley hospitals incurring operating losses is partly responsible for this year's loss of hospitals and hospital capacity. Long-term care facilities, which had operated in the black for the previous four years, slid into the red in 2003 as growth in their operating revenues failed to keep pace with increases in their operating expenses. Unlike hospitals, the Valley long-term care sector added establishments, available beds, and occupied beds, but their occupancy rate fell when they added more beds than occupants.
Valley tourism and travel activity indicators all were positive with strong growth in nearby theme park attendance, higher Valley hotel occupancy rates and rising room rates, and growing airport passenger traffic at the renamed Bob Hope Airport , which also logged record high air cargo volume.
Valley population growth continued to slow. Contributing factors include roughly level births in 2004, slightly higher deaths, and positive but declining net in-migration. The Valley's population-age profile chart shows two bulges—one for the baby boomers and another for 10 to 20 year-olds. Person per household continues to rise across the Valley as the population still grows faster than the available housing stock.
Public and private school enrollments continue to drop (-2.3 percent in 2004-05 and -0.6 percent in 2003-04) and the recent losses are felt in all Valley public school districts to one degree or another. Hispanics remain the dominant group in public schools with 63 percent, and API scores at Valley public schools generally rose.
The Valley's average and total adjusted gross income dipped slightly in 2002 relative to 2001, but not as much they did in California . The percentage of Valley residents declaring self-employment income is high and rising.
Poverty incidence is up slightly in the Valley since 2000, rising from 15.0 percent in 2000 to 15.3 percent in 2004. The Valley's poverty incidence compares favorably with Los Angeles County 's 2004 incidence of 17.9 percent. Valley public assistance program enrollments may be edging down again after a couple years of roughly stable enrollments.
Some quality of life measure showed improvements and some did not. Annual air quality statistics continued to improve by most measures but new ozone standards effective in 2005 showed elevated ozone levels in 2002 through 2004, especially in the West Valley . Crime rates generally eased slightly in 2004 for most Valley cities and areas. The Transportation section shows three-quarters of Valley workers commute alone in a car, truck, or van, while the other quarter use more environmentally friendly means, including the 5 percent who work at home. Freeway traffic congestion did not improve last year.
