Professor Daniel Blake, director of the San Fernando Valley Economic Research Center.
Highlighting the importance of the entertainment industry to the region, the San Fernando Valley during 2000 was home to 58 percent of all entertainment industry production and distribution jobs in Los Angeles County and to 44 percent of all those jobs in California. Most of those entertainment jobs in the Valley are related to the motion picture industry.
"Clearly, the Valley is an attractive location for the entertainment industry, and its attractiveness has increased during the past decade," said economics professor Daniel Blake, director of Northridge's San Fernando Valley Economic Research Center. The findings are contained in the center's annual report on the state of the San Fernando Valley economy.
The Valley's employment base in the sector tripled from 35,400 jobs in 1992 to 105,383 jobs in 2000, driving most of the entertainment industry employment growth at both the county and state levels during those years. The Valley's 105,383 jobs in 2000 were among 180,900 countywide (58 percent) and 238,400 statewide (44 percent).
Although the center's study generally predicts a weakening economy overall and slowing or no job growth for the San Fernando Valley during the coming year, Blake said it is possible local entertainment production might be helped some by the reluctance of celebrities and others to use air travel for distant on-location filming in the wake of the September terrorism attacks.
As in past years, the entertainment industry by far remained the largest single private-sector employer in the Valley during 2000. The production and distribution component's 105,383 Valley jobs accounted for 16 percent of total Valley private sector employment. The sector's $6.1 billion annual Valley payroll represented 23 percent of the area's total private payroll.
CSUN researchers said the real impact is even greater. After adding other entertainment job sectors, total entertainment employment in the Valley grew to 119,500 jobs (18.2 percent of all Valley private jobs) and $6.5 billion in payroll (25 percent of all Valley private payroll). And that still does not include the industry's many supporting businesses such as catering and legal.
The 90-page report by the university's research center is its fourth annual "Report of Findings on the San Fernando Valley Economy." The center, part of the College of Business and Economics, looks each year at trends in the economy, employment, real estate, demographics and population of the Valley.
Professor Blake issued the report during the opening session of the Valley Industry and Commerce Association's (VICA) 13th annual Business Forecast Conference, held at the Warner Center Marriott Hotel on Friday, Oct. 26. The daylong conference included Los Angeles Mayor James Hahn's inaugural "State of the Valley" address to local government and business leaders.
"Given the concerns about the national economy and how it, in turn, affects the Valley, the report should be an even more valuable tool for local businesses, community leaders and residents as they make their daily business decisions," said Northridge President Jolene Koester. Koester also called the report's findings "a testament to the hard work and dedication of our citizens."
Overall, Blake said clear signs of a slowing national economy combined with the impacts of the September terrorist attacks have created "a lot of uncertainty." He said economists generally believe the third quarter of 2001 will be ultimately judged as the start of a national recession that could last several quarters through mid-2002.
Although total Valley private sector employment grew 0.2 percent to nearly 657,000 jobs during 2000, compared to 3.5 percent growth during 1999, Blake said various indicators, including rising local unemployment claims, suggest the coming year will be tougher. "It looks like a weak economy in the San Fernando Valley," he said.
Another major area addressed in the report is the Valley's tight real estate market. During 2001, rising Valley home prices continued to reach new highs in the third quarter, when the median resale home price hit $272,500, according to information provided by Dataquick. Median home prices by mid-2000 had eclipsed the prior high of $235,100 set in the third quarter of 1989.
The inventory of available Valley homes for sale, as measured by the listings-to-sales ratio, also continued its decade-long decline through the second quarter of 2001. By that point, the ratio averaged just 2.8 listings for every sale, its lowest quarterly rate in the past decade. By comparison, the ratio in the Valley had been above 20 at times during 1992 and 1993.
In the Los Angeles city areas of the Valley's rental market, meanwhile, the vacancy rate continued to plummet to just 2.6 percent by the second quarter of 2001, compared to above 10 percent in early 1996. The Valley's rental vacancy rate has fallen faster and farther than the citywide rate, which tallied at 3.6 percent by the second quarter of 2001.
Despite those record high home sale prices and low rental vacancy rates, residential building permit activity in the Valley has dropped steeply in recent months. "This lowered level of future housing construction is not going to spell relief for the current housing crunch," Blake said.
San Fernando Valley At-a-GlancePopulation: The San Fernando Valley had a population of 1,698,135, according to U.S. Census data for 2000. That included 1,357,374 people in Los Angeles City areas north of Mulholland Drive, 194,973 in Glendale, 100,316 in Burbank, 23,564 in San Fernando, 20,033 in Calabasas and 1,875 in Hidden Hills.
The Valley's population grew 10.7 percent between 1990 and 2000, more than the countywide increase of 7.4 percent. The Valley now contains 17.8 percent of the population in the county. Similarly, the Los Angeles City portion of the Valley now accounts for 47 percent of the land and 37 percent of the population in the entire city.
Employment: The Valley had total private-sector payroll during 2000 of $26.33 billion, up 4.7 percent for the year, spread among nearly 657,000 jobs. Total Valley job growth for the year was slightly above 1,000 jobs for a 0.2 percent growth rate. The average private sector job in the Valley paid $40,136 in annual salary.
The Valley under-performed the broader Los Angeles County area during the past year. Los Angeles County private sector employment during 2000 rose 1.1 percent while payroll rose 6.2 percent. Still, the Valley accounted for more than 20 percent of total county employment in these sectors: agriculture; construction; finance, real estate and insurance; and services.
Biotechnology: The Valley's biotechnology sector is a small but growing area. Its 17,742 employees accounted for 2.7 percent of the Valley's private sector employment, while its $911 million annual payroll accounted for 3.5 percent of the Valley's total. Since 1997, the local biotech industry has added nearly 3,000 jobs. It now accounts for 19 percent of county biotech employment.
Ethnicity: During the past decade, the Hispanic population in the Valley grew by 43 percent, the Asian-Pacific population by 26 percent and the black population by 17 percent, while the white population declined by 5 percent. The Valley's ethnic breakdown, among major groups, now is 46.7 percent white, 39.1 percent Hispanic, 9.6 percent Asian-Pacific and 3.9 percent black.
Airports: Burbank Airport served 4.75 million revenue-paying passengers during 2000, continuing the small but steady growth seen since 1997. Flight operations at Van Nuys Airport, meanwhile, fell from 528,000 in 1999 to 483,000 during 2000.
School Enrollments: During the past seven years since 1993, public school enrollments in the Valley grew by 13.5 percent, including 14 percent for Los Angeles Unified, 24.1 percent for Burbank, 5.5 percent for Glendale, and 13.4 percent in the Las Virgenes district.
Crime: The Valley's crime rates, after declining for most of the decade, have leveled out. The pattern is the same for the Los Angeles, Burbank and Glendale police departments: steady decreases in crimes per 1,000 residents until about 1998, then level crime rates in 1999 and 2000. Both reported hate crimes and gang-related crimes fell in LAPD Valley areas during 2000.
Commercial Buildings: The vacancy rate for office buildings in the Valley, excluding Glendale, was 10 percent for the first half of 2001, then spiked to 11.9 percent in the third quarter. That is up from levels under 10 percent during 1999, but had been below the national rate of 11.4 percent for the second quarter of 2001.
Source: 2001-2002 Report of CSUN's San Fernando Valley Economic Research Center
@csun | November 5, 2001 issue
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