Orange County has held steady with subtle manufacturing job growth in the past four years, according to a recent report from the Los Angeles County Economic Development Corp.
“You are flat lining, which I would say is good,” said Jack Kyser, chief economist for the Los Angeles County Economic Develop-ment Corp., which also follows Orange County. “At least you are not losing jobs.”
The county’s manufacturing jobs have hovered around 184,000 since 2003, according to the report.
Last year, the sector had 183,400 jobs, 500 more than in 2005.
The sideways trend, spurred by productivity and global shifts in manufacturing, could be here to stay. The county isn’t likely to see a big upswing anytime soon, economists said.
Manufacturing here has seen two big booms in the past two decades,the aerospace surge of the late 1980s and the tech expansion of the late 1990s.
Downturns in both sectors drove the loss of 50,000 manufacturing jobs since 1990, according to the report.
North County, which has the most manufacturing, suffered the biggest loss, with about 23,143 workers cut since 1990. South County lost about 5,815 jobs.
Aerospace peaked in 1990, driven by defense spending under President Reagan. Manufacturing jobs here peaked at 231,000 back then.
Then came the end of the Cold War. Contractors, suppliers and others slashed jobs to 189,000 by 1994, according to the report.
The tech boom gained back some ground. Manufacturing jobs grew to 217,000 in 2000 as OC became a hub for circuit boards and other electronics.
“The boom that we got in 2000, we know it was because of the Internet and Y2K problems, where businesses started investing quite a bit,” said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University. “We had a huge employment burst in high-tech manufacturing.”
The tech bust and larger recession brought the county to its current level of about 184,000.
What’s left is a specialized manufacturing sector focused on aerospace, tech and medical devices and other products that can afford to be made here. Gone are more common products with thin profits and lots of competition.
“We are not really adding that many low skilled jobs,” Adibi said. “Those are moving away to other states and other countries. The quality of jobs is good.”
The average wage of a manufacturing worker here was $52,959 in 2006, the Los Angeles County Economic Development Corp. report said.
Last year, the county held its No. 8 spot on a list of cities with more than 150,000 manufacturing jobs, according to the report.
Houston and Seattle saw the biggest rise in manufacturing jobs in 2006 and have seen growth during the past couple of years. New York and Detroit posted the biggest losses.
OC saw 0.3% growth in manufacturing jobs during the past year. Hiring at some companies was offset by layoffs at others.
The county is looking increasingly like New York or San Francisco, with its expensive land and high cost of doing business, Kyser said.
“The cost of land in the coastal county is just too high,” he said. “It is expensive to live there,but you have to live there.”
OC fares better than its big neighbor.
Los Angeles, the nation’s No. 1 manufacturing spot, lost 43% of its jobs since 1990. OC has lost 21%.
L.A. saw its biggest job losses in transportation equipment (mostly aerospace), with 105,100 jobs cut since 1990.
Aerospace and defense jobs have seen a comeback in recent years, though nothing like the 1980s boom. And another tech boom isn’t likely to bring a big rebound in jobs. Most labor-intensive computer assembly and circuit board work has gone to Asia.
“We are not seeing any astonishing technological changes that would create that kind of growth,” Adibi said.
Productivity also stands to check manufacturing growth.
“This trend will continue well into the future,” Adibi said. “We will produce more, but employment will not increase significantly. If the long-term trend is any indication, (manufacturing jobs) would decline. Manufacturers have been producing more in terms of dollars. They can use machines to produce more with the same number of workers or fewer.”
Demand for robots is driving sales for companies such as Motoman Inc., an Irvine unit of Japan’s Yaskawa Electric Corp.
In the past five years, Motoman has seen sales double for its industrial automation gear for medical laboratories and manufacturers.
More growth could come from OC’s medical device makers, Kyser said.
The sector has about 11,000 jobs, the report said.
“(Research and development) is one of our best strengths,” Kyser said. “The best opportunities would be in the biosciences.”
Others agree but say it would be a small gain compared to OC’s tech and aerospace heydays.
“There’s been talk, especially with stem cell research funding and some of the technology that is occurring in gene therapies,” Adibi said. “The scale of that isn’t going to be anything close to what we experienced in the late ’90s.”
A medical device boom would be limited, at best, because the industry is highly regulated and manufacturing is costly, Kyser said.
“What you’d have is very specialized production activities,” he said. “But if it’s a consumer-type product, it’s going to be under pressure to go offshore.”
