Local economy looks good

TONY DODERO

I admit, economics classes weren’t my first choice in college.

Keeping track of profits and losses has never come second nature to

me.

But even an editor, someone who makes a living through words and

images instead of bricks and mortar, knows that he must keep abreast

of business trends.

Hard as it is for us journalism types to read the economic tea

leaves, or at least make sense of them, we at least know if the

leaves start turning brown, we have to find some water.

So that’s what brought me Thursday morning, along with about 320

of the county’s business executives and corporate and civic leaders,

to the Hyatt Regency Irvine to listen to economists, and those in the

know about the economy, give us a report on the 2005 Orange County

Executive Survey.

The survey has moved from 18 years of sponsorship at the UC Irvine

Graduate School of Management to Chapman University’s A. Gary

Anderson Center for Economic Development at the George L. Argyros

School of Business and Economics.

The survey takes the pulse of chief executives and business heads

of the county’s major manufacturing, wholesale, retail, finance,

insurance, real estate and business professional firms to determine

the health of the local economic engine.

So just what are those tea leaves looking like? Does the economy

need a big splash of water?

Well, the news is pretty good.

Nearly three quarters of the firms expect financial performances

to move upward this year, according to the survey. The trends in the

survey show that the local economy has pushed through a sluggish

recession two years ago, with 2004 and 2005 bringing sunnier

projections, said Dennis Aigner, the survey’s project director and a

research fellow at Chapman University.

Naturally, the business outlooks continue to appear good for

things such as real estate and sales, and even the outlook on the

state of California is back on the rise. Employment, while not

skyrocketing, is moving along at a reasonable pace.

Ed Fawcett, the president of the Costa Mesa Chamber of Commerce,

wasn’t at the breakfast, but he said the survey results mirror his

experiences.

“I agree with that,” Fawcett said. “We’ve felt it here at the

chamber. The first four months of this year have been the best months

we’ve had in the last five years.

“I think the jobs are coming back slowly,” Fawcett said. “Just a

nice gradual increase, but a conservative increase. People aren’t

popping the champagne corks, but it does lead to an optimistic

outlook.”

Someone who was in the audience was Costa Mesa Councilwoman Linda

Dixon, who is the assistant vice president of university advancement

at Chapman, developing relationships between the university and

corporations.

“I thought it was very well received,” she said of the morning’s

survey results. “It gives specifics to Orange County, and while

people are interested in the state and the U.S., they are also very

interested in their local economy. On the whole, things look good.”

One of Fawcett’s concerns, however, was also a theme found deep

into the survey’s numbers. That being largely that governments --

city, county and state -- don’t make it easy for businesses to do

business here, especially manufacturing businesses that are fleeing

to other states and countries for cheaper labor costs.

At the top of the concerns for these businesses are workers’

compensation costs and health insurance costs and the high price of

housing for workers.

But Fawcett took aim at the Costa Mesa City Council for its

policies, especially in the case of the Westside, where the council

has created an overlay zone that he believes could have a direct

effect on the industrial and manufacturing sector of the city.

For background, the council and many city leaders believe the

Westside would be better suited for homes rather than industrial

complexes, especially with its close proximity to the ocean.

But homes are not necessarily what the city needs, Fawcett said.

“That’s great but that does not provide for a good economy,”

Fawcett said. “The industries on the Westside provide great jobs for

people who make a good living. We have an almost recession-proof

economy in Costa Mesa if they don’t screw with it, and they are

screwing with it. It will not be good for Costa Mesa to lose good

solid manufacturing jobs on the Westside.”

Dixon, however, took issue with that.

“What the overlay does is it allows the industrial and

manufacturing to continue to operate or give themselves an

opportunity to sell and go elsewhere and move on. They only move out

if they want to.

“You have to be able to allow change in your city if you want to

continue to grow and continue to get better,” she said, noting that

the manufacturing sector can move to other sites in the city.

Further, she said the city is in need of good housing

developments, and she believes Costa Mesa bucks the trends of those

in the survey who said government is bad for business.

For example, she noted that Costa Mesa has not raised its

business-license fees in 20 years.

“It’s one of the most inexpensive places to do business,” she

said. “But we have to be sensitive to the community and people who

live here too. I’ve always said that good neighborhoods and good

businesses go hand in hand. They are partners.”

So there you have it. The tussle between the needs of businesses

and the needs of residents continues to play out at the state, county

and city level, almost identically.

If only someone could figure out a way to get them all to work

together. Well, that’s something I bet even I could make money with.

* TONY DODERO is the editor. He may be reached at (714) 966-4608

or by e-mail at tony.dodero @latimes.com.