COST OF GOVERNMENT TAXES AND REGULATIONS" ARE STIFLING CALIFORNIA BUSINESS GROWTH -- ITS NOT THE ECONOMY" NEW LAEDC SURVEY FINDS

The survey reports that the South Bay will do best in growth followed by the Westside and Gateway regions. The Countys manufacturing sector has been the hardest hit by these regulatory and operating cost issues," said Chief Economist Jack Kyser, LAEDC

(PRWEB) September 16, 2003 --      Los Angeles, CA (Sept. 15, 2003---- About a quarter (24 percent) of the businesses in Los Angeles County plan to expand their operations in the next 12 months, eight percent plan to relocate, five percent plan to downsize and one percent plan to close.

That's according to preliminary data release today (Monday, Sept. 15, 2003) in an ongoing business survey (www.laedc.org) being conducted by the Los Angeles County Economic Development Corporation (LAEDC) and the National Center for Business and Economic Research (NCBER).

     The surveys are being conducted with CEOs, COOs and CFOs of 25,000 businesses in LA County.

     The survey shows businesses are ready to expand, and they would prefer to expand or relocate locally," said CEO & President Lee K. Harrington, LAEDC. However, businesses find costs of taxes and regulations and the availability of qualified labor as significant barriers. The real wild card in Californias economic future is whether these companies ultimately choose to grow here, or out of State," explained Harrington.

     NCBER will continue to contact CEOs to identify key issues that put businesses in L.A. County at risk for leaving the area." The issues could range from taxes, environmental permits, workforce availability to workers compensation costs. The comprehensive study surveys Los Angeles County businesses, which have 25 or more employees on a host of key business retention issues and opportunities. The survey has now surpassed 2,000 complete profiles and gives us a good baseline to measure future changes," said President & CEO K.D. Nyegaard of NCBER.]

     The LAEDC is using the survey as an early warning system" to contact companies who are thinking about expanding, relocating or leaving to offer free business services such as site location assistance, permit expediting, workforce resources and available incentives.

     The survey confirms that the Countys manufacturing sector has been the hardest hit by these regulatory and operating cost issues," said Chief Economist Jack Kyser, LAEDC. 20 percent of the Countys manufacturing and wholesale trade businesses were not profitable last year, and the sectors do not project job growth in the coming year. This trend has serious implications for middle income jobs in our region. Loss of the Manufacturers Investment Tax Credit in the budget recently adopted in Sacramento does not bode well for retention of this critical activity," Kyser explained.

     "This survey provides critical information for us as a financial institution," said JoAnn Bourne, executive vice president with Union Bank of California (UBOC)." Our goal is to invest in businesses both large and small and help these companies grow to create more jobs in California for a stronger economic future. It helps identify critical issues. That's why Union Bank is happy to be a sponsor of this effort."

     Those sectors expecting the greatest growth in the survey were finance and construction, followed at some distance by transportation/utilities, which includes technology, personal services, business services such as data processing, and retailers. Employers with 50-90 employees are most likely to add staff, and businesses with 100-249 employees are planning to add, on average, the greatest number of staff. However, firms are placing greater emphasis on new equipment and technology, than on access to new employees as a growth strategy," said Harrington.
    
     The South Bay appears to be poised for greatest job growth (three percent) followed by the Westside and Gateway Cities regions. The San Gabriel Valley, which has experienced consistent growth for the past five years, should experience only about one percent growth in the near term. The region is starting to run out of large blocks of space. The survey found that 80 percent of the companies considering relocation prefer to do so locally or within the state, but that 12 percent do plan to leave the state or go off shore."

   "The survey results validates our belief that a high-quality executive and employee benefits package is critical to companies' ability to attract and retain the caliber of employee necessary to be successful in today's competitive business environment," said CEO Steven W. Speer, Strategic Benefits Group, another survey sponsor.

   Overall, the survey suggests that while the state economy is still weak, the Los Angeles Countys economy is resilient and improving. Real jobs are at stake. We need to help our businesses grow-not go," concluded Lee Harrington.

     [Editors: For advanced interviews please contact George McQuade, 818.340.5300 or PR@MayoCommunications.com. The entire 60-page survey results are posted at: www.laedc.org under special reports or at

     http://laedc.info/pdf/NCBER-2003-09.pdf.