There are reasons the economic recovery feels firmer in Orange County compared with the national picture—factors that have business moving faster here than most other parts of the country.
This week’s Business Journal list of the largest privately held companies based here includes 81 of them—a group that combined for a vibrant performance in 2012 (list starts on page 14). They accounted for a collective 5.4% gain in revenue from a year earlier, to about $63 billion. That came with a 4.1% jump in local jobs, to more than 42,000—and a combined 5.3% increase in companywide employment, for a total of nearly 235,000 workers.
Companies with increases in sales outnumbered decliners by 36 to 4, with another five reporting flat revenue. The Business Journal estimated revenue for 36 of the companies on this year’s list.
Thirty-three companies added jobs in OC in 2012, compared with nine that cut jobs here, 10 that remained even and 29 that declined to report.
A total of 31 reported increases in employment companywide, while 12 cut jobs, 10 held steady and another 28 declined to report.
The gains in sales and employment by the locally based companies outstripped economic measures for the nation and the state. The U.S. economy grew by just more than 2.2% last year, while job growth throughout California came in at about 2%.
The increases continued a streak of gains that started in 2010 as the local economy began to move beyond the recession. The 81 companies on last year’s list posted a 6% increase in revenue, to $60 billion.
Local employment gains trailed revenue increases by a relatively significant margin during the first two years of the recession. Last year, for example, the 81 companies combined for a 2% increase in OC hires—about a third of the percentage gain on revenue. This year’s numbers—the 5.4% boost in revenue and 4.1% hike in local hires—indicates that companies have ramped up hiring here after a couple of years of recovery.
Broad Range
This year’s companies, including the biggest percentage gainers, also demonstrate the broad range of the local economy:
n Pacific Life Insurance Co. parent Pacific Mutual Holding Co. in Newport Beach once again held the top rank, this time with $7.3 billion in revenue from its insurance, airplane leasing and other operations, an 8.9% gain.
n No. 80 Technologent, an Irvine-based IT services provider, had $140 million in sales last year, an 84.2% increase that put it on the list for the first time this year.
n No. 29, Santa Ana-based mortgage lender Stearns Lending Inc., led the field with a 124.2% increase to $493.3 million, a jump that reflects the low interest rates that have increased demand for refinancings, as well as a recovering housing market’s boost of new mortgages. Stearns Lending climbed nearly 30 spots from its No. 58 ranking last year.
n No. 15 Universal Services of America, also based in Santa Ana, notched a 96% gain in revenue to $725.7 million. The company, which provides security, janitorial and other services to commercial property owners, made numerous acquisitions during 2012, extending its operations into new geographic territories, such as the Northeastern U.S. It rose 19 spots on the list from the No. 34 ranking last year.
Universal Services’ acquisitions offered a clear view of some companies that made big gains on jobs companywide without adding to local operations. The company’s deals added more than 7,000 employees to its payroll last year, a 37.7% increase to 26,600. In OC—where headquarters operations account for much of its employment—it notched a 3.8% gain to 2,151.
Stearns Lending made big gains locally and companywide. It added 100 workers here in 2012, a 28.6% increase, for a total of 450. The company hired more than 600 workers companywide for the year, a 69.3% increase, for 1,524 overall.
The strong overall performance in 2012 got a major boost from a recovery in residential real estate that began early last year and has continued to bring steady gains. The trend helped San Juan Capistrano-based Rancho Mission Viejo LLC get back on the list at No. 73 with an estimated $150 million in revenue—most of it from land sales to homebuilders.
IPOs
The strong housing market also has led a couple of companies—Irvine-based TRI Pointe Homes Inc. and William Lyon Homes in Newport Beach—to leave the ranks of locally based, privately held companies with initial public offerings this year. Two more locally based builders—Aliso Viejo-based The New Home Co. and City Ventures Inc. in Newport Beach—recently announced similar plans (see related stories, page 1).
