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Articles & News
Articles, News Events, and Commentary related to Finance and the Automobile Industry.
Voices
Los Angeles Business Journal
December 22, 2003
Scott Anderson
Senior Economist
Wells Fargo Bank
"We're just not seeing any strength in employment. California may actually lag the rest of the U.S. in job growth because it has a lot of structural problems that limit employers' aggressiveness in adding workers. Business costs in the state are limiting corporate expansion.
"Capital expenditures are up from where they were at the beginning of the year--but we don't have very good numbers to track it on the state level. Our sense is that there is more spending right now on technology hardware and computer software as companies replace old equipment. And we're expecting more capital equipment spending by manufacturers.
"When CEOs and CFOs see their profits are rising, it boosts the stock market and when it comes time to budgeting they're more likely to boost spending on equipment and software."
Domenick Miretti
Marine Clerk
International Longshore and Warehouse Union Local 63
"Let's say the economy does bump up. As worker, I wonder what kinds of jobs are going to be created? If you look at the people being employed, a lot of those jobs are not full-time and they have no benefits. If you have that kind of a workforce, they're not going to buy cars or houses, so I don't see what's going to fire this economy.
"The philosophy of the employer today is they're going to outsource any new jobs overseas instead of employing people here. Already at some terminals there's been a 30 percent loss in terms of clerk work and yard work for those of us that interact with truckers when they pick up a container."
Christopher Cagan
Director of Research and Analytics
First American Real Estate Solutions
"Housing prices will continue to rise in 2004 but at a slower rate. Prices are getting a little high after the boom years of 2002 and 2003. L.A. County housing prices rose about 22 percent this year, and we expect prices to rise another 14 percent in 2004. Next year will be a slower year but still a good year to sell, because prices remain high, and a good year to buy, because interest rates remain relatively low.
"This is just the normal ebb and flow of the business cycle. I predict interest rates will rise to 6.7 percent next year and above 7.1 percent in 2005 because of the twin federal budget deficit and trade deficit, both are at half a trillion dollars. That makes the dollar much weaker."
Joseph Magaddino
Chairman
Department of Economics
Cal State Long Beach
"Next year is not a great year but it's a year where we're moving back on track, and 2005 will be much stronger for the region.
"We expect 1.3 percent growth in 2004, which is below what we should be seeing for the region. It looks to us that as the national economy starts to improve its performance, then that will help Southern California.
"The bad news is we don't see any positive growth in 2004 in manufacturing, which is still showing job losses, or non-durable manufacturing. The apparel sector is vulnerable to foreign competition. We do think those sectors will turn around in 2005.
"Where we should see some growth is the information sector and motion pictures. Construction is still healthy. Information technology service jobs are coming back simply because we see more software purchases. Another area that looks good is leisure and hospitality after going through an extended period of contraction."
--Kate Berry
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