Released on = March 31, 2006, 11:33 pm

Press Release Author = George McQuade

Industry = Construction

Press Release Summary = New study finds that major challenges still loom for this
sector along with a tussle over industrial land

Press Release Body = Los Angeles- Los Angeles County remains the nation's top metro
area in manufacturing jobs, while the six Southern California counties were the top
manufacturing "state," according to a study released today
(Wednesday, March 29, 2006) by the Los Angeles County Economic Development
Corporation (LAEDC).

The annual report entitled, "Manufacturing Review" was presented by Chief Economist
and Senior Vice President Jack Kyser, LAEDC at WESTEC, an annual major manufacturing
technology show held at the Los Angeles Convention Center. The 2005 figures and
study are posted at http://laedc.info/pdf/mfg-2006.pdf.

"Many people have written manufacturing off since they measure its health by the
employment count," said Kyser. "However, factory job counts don't tell the full
story of what is going on. Manufacturing firms have emphasized productivity gains,
so while there are declining job counts, output is growing."

Kyser pointed out that manufacturing makes significant use of temporary help, which
is counted in Business Services. There is also "domestic outsourcing" being done by
some local manufacturing sectors, and there are "non-employer" manufacturing firms
who are not captured by most government statistics-25,727 in the region at last
count. "Manufacturing in Southern California is more robust than often perceived by
the general public," Kyser concluded.

-Los Angeles County retained its title of the nation's largest manufacturing center
as measured by employment. The County's 2005 average of 470,400 jobs can be
compared with number two Chicago's average of 396,100 jobs.

- Other local metro areas also did well in this ranking by manufacturing employment,
with Orange County number eight in the nation with a 2005 average of 182,700 jobs,
Riverside-San Bernardino was 17th with 120,200 jobs, while San Diego County was 19th
with 104,200 manufacturing jobs.

-If you add together the six major Southern California counties (including San Diego
County), the 2005 annual manufacturing employment was 915,900 jobs. Take this away
from California's total and the remainder of the state would slide down to a 7th
place ranking. As for the six counties, they would be the largest manufacturing
center in the nation ahead of number two Texas.

The forecast for manufacturing jobs in the region during 2006 is mixed, according to
the LAEDC. Los Angeles County lost 13,200 factory jobs in 2005, and should see a
further decline of 5,000 jobs in 2006. Orange County lost a modest 800 factory jobs
in 2005, and should see another loss of 1,000 jobs in 2006. San Diego County saw
100 factory jobs disappear in 2005 and is forecast to lose another 500 during 2006.


There was better news in the Riverside-San Bernardino area where there has been
slow, steady growth -- +100 jobs in 2005 with a gain of 200 forecast for 2006.
There was a similar trend in Ventura County, with a gain of 100 jobs in 2005 and a
forecast increase of 300 in 2006.

"The conversion of industrial land to other uses such as housing or mixed use was
the spark that set off the current round of discussion about the health of
manufacturing in the region," Kyser observed. "Besides manufacturing, there are
many other users of industrial space in the region, including wholesale trade,
warehousing (which is driven by booming international trade flows), newspaper and
book publishing, and motion picture/TV production."

One result is that Los Angeles County and the Riverside-San Bernardino area are the
two strongest industrial markets in the nation as measured by vacancy rates. In Los
Angeles at year-end 2005, the rate was 2.0 percent with some areas in the County
even lower, while the Riverside-San Bernardino area checked in with a 2.8 percent
industrial vacancy rate.

"The run-up in residential real estate prices means that residential developers can
out bid people for industrial sites. The tension between industrial versus
residential will rage on, but conversion of industrial to residential means that
people will lose their jobs," cautioned Kyser.

The LAEDC manufacturing report offered some thoughts about manufacturing:

- Don't measure its health by just the job numbers.
- Most manufacturing jobs pay well and frequently have benefits.
- Manufacturing works with the current demographics of the region.
- Manufacturing, since it is composed of mainly small-to-medium sized firms, is a
good customer of other business sectors.
- Manufacturing generates revenues for communities - point of sale tax revenue,
utility taxes, and permits.

"The good news is that Los Angeles County is the manufacturing capital of America,"
said Bill Allen, president and CEO of the LAEDC. "But while our region is without
peer in the United States, global pressure will require careful regional stewardship
to maintain the vitality of our manufacturing base."

[Editors: For media advanced interviews or images call: George McQuade @ MAYO
Communications, 818.340.5300 or 818.618.9229. The full report is available on the
internet at: http://laedc.info/pdf/mfg-2006.pdf/ and www.MayoCommunications.com/.

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