TRADE, TRANSPORT LIKELY CANDIDATES TO LEAD CALIFORNIA OUT OF RECESSION

TRADE, TRANSPORT LIKELY CANDIDATES TO LEAD CALIFORNIA OUT OF RECESSION

The international trade and transportation sector will continue to be one of the few bright spots in the local economy as Southern California prepares to enter its fourth straight year of recession in 1994.

Speakers at the annual economic outlook conference of the Los Angeles Area Chamber of Commerce said Thursday that although key sectors of the local economy such as defense, aerospace and housing will shrink even further next year, trade and transportation will grow as California's major trading partners in Asia work their way out of recession."With the ports, airport and Alameda Corridor, transportation is the fastest-growing sector," said Daniel P. Garcia, chairman of the chamber.

The neighboring ports of Los Angeles and Long Beach are the nation's first- and second-largest containerports, respectively, and Los Angeles International Airport is the third-busiest airport in the nation.

Alison Lynn Reaser, senior vice president and chief economist at First Interstate Bancorp. in Los Angeles, said that overall, the five-county Los Angeles metropolitan area will continue in recession next year even though much of the rest of the country began its economic recovery in March 1991. The bank forecast that non-farm employment in the five-county area will drop 1.3 percent in 1994 after declining 1.9 percent this year.

The turn-around in fortunes of aerospace and defense, for many years the strongest sector of a rather diverse economy, is mostly to blame for the current recession. "The dislocation affecting highly specialized, highly paid aerospace workers presents a problem for the county," she said.

Joan P. Goodman, director of the Entrepreneur Program at the University of Southern California, struck an optimistic chord when she said Southern California is going through a major restructuring that in the long run will produce a much healthier economy.

However, she added, the restructuring is still at the stage where not enough jobs are being created to replace the jobs that are being lost. Although some of the new employment is in the lower-paid service industry, there are also a sizable number of jobs being created in industries where salaries are comparable to aerospace, she added.

Port and shipping executives contacted after the meeting agreed that 1993 was a pretty good year and 1994 is shaping up even better, but they warned not to expect any significant growth in trade until the fourth quarter of next year.

"We (the shipping industry) are probably more conservative than the economists you heard," said Ronald P. Schley, vice president of sales and marketing-North America at Hanjin Shipping Co. in Long Beach. "We've been burned too much in the past."

Don Wylie, director of trade and maritime services at the Port of Long Beach, noted the importance of Japan as a trading partner, and he said that economy probably won't rebound significantly until the fourth quarter next year.

"Even though Japan has introduced its fourth stimulus package, there is nothing to indicate it will be any more effective than the other three," he said.