Southern California shows signs of economic recovery in 2009: report

The Southern California region, which consists of five counties, had posted business expansions of more than 10 percent in 2009, the Los Angeles County Economic Development Corporation (LAEDC) said in a reported released on Wednesday.

A "major business expansion" is defined as a new lease or expansion of at least 1 million dollars in value or of 20,000 square feet or more of space.

"This is welcome news," said LAEDC Chief Economist and co- author Nancy D. Sidhu. "Activity had been declining since 2004 when 348 major expansion projects were recorded. The total square footage recorded in 2009 was 21.5 million, up by 4.6 million square feet from 2008."

"Activity varied across the region and largely reflected the disparity of the economic situations in the five counties, with some areas posting sizable gains while others continued to languish," she added.

Three of the five counties, Orange, San Bernardino and Riverside, have all registered robust expansions with Orange taking the lead with 6 million square feet. On the contrary, projects in Los Angeles and Ventura have seen dramatic drops of 1. 9 million square feet and nearly 600,000 square feet respectively.

"This is consistent with our 'Forecast' released last month calling for international trade, tourism and technology industries to lead the recovery in 2010-2011," said Founding Economist Jack Kyser of the Kyser Center for Economic Research at the LAEDC, who also co-authored the study.

According to the LAEDC report, international trade and professional business services have been the driving force behind the business expansion in Southern California. Foreign firms accounted for seven major projects during 2009, down for the second year in a row from the 2008 count of 11 major projects.

The foreign direct investment expansions came from Canada, Germany, Belgium, China's Hong Kong and Iceland, the report said.

However, a cautious mood is evident among the analysts.

"With the uncertain economic outlook, businesses will be more cautious in expanding their facilities in the next few years and project financing will be more difficult to come by," Kyser said.

A major private and non-profit organization established in 1981, the LAEDC serves to attract, retain, and grow businesses and jobs for the regions of Los Angeles County.

Source:Xinhua