O.C. Jobless Rate Hits 7%, Highest in 9 Years : Economy: 97,000 were out of work in November. Statewide, unemployment was 10.1%, also a 9-year high.

By MICHAEL FLAGG

Jan. 1, 1993 12 AM PT

TIMES STAFF WRITER

ANAHEIM — Seven thousand people in Orange County joined the ranks of the jobless in November as unemployment hit 7%, the highest level in more than nine years.

Across the county, 97,000 people were estimated to be out of work in November. That was up from 59,000 a year earlier, when the unemployment rate was 5.3%.

The statewide unemployment rate also hit its highest level in nine years--10.1%. Across the nation, on the other hand, unemployment dropped to 7.2% in November as other regions’ economies drew ahead.

The consensus among experts is that while the local economy may not get much worse, it won’t get much better until the end of 1993 at the earliest.

“But this will be the year of the turnaround,” said Michael L. Meyer of the Newport Beach office of real estate consultants Kenneth Leventhal & Co.

The state Employment Development Department reported Thursday that all of the county’s major industries except transportation and public utilities lost jobs in 1992.

Among the hardest hit in November were two businesses especially important to the local economy: real estate and military contracting.

The construction industry alone has lost nearly 5,000 jobs during the past year. In all, the county has lost more than 20,000 jobs in the past 12 months.

To hit 7%, the county unemployment rate jumped 0.4 percentage points in November from 6.6% in October. It had not been as high as 7% since August, 1983.

Also, for the first time in years, the county’s unemployment rate approached that of the nation. Orange County generally has a much lower jobless rate than the nation because its economy is usually so robust.

Why is Southern California’s economy so lethargic now? Largely because the region depends so heavily on a handful of industries like real estate and the defense industry.

Orange County’s military contractors, for example, make everything from missiles to radar. And its giant developers, like the Irvine Co., have in recent years turned vast tracts of farmland into whole cities.

But those businesses are now sick: Government spending for defense is way down; a glut of big office buildings means that no new ones are being built; and few people are buying new homes.

In fact, new-home sales in Orange County probably won’t pick up again until the end of 1993, Meyer of Kenneth Leventhal said.

“Southern California is at least a year behind the rest of the nation,” he said. “But as consumers feel more secure about their jobs and the economy, they’ll start buying houses again.

“And that’ll lead the rest of the county out of the recession.”

As for defense and aerospace, the worst is probably still to come.

“It’s frightening to talk to some of our members,” said Patrick Bolton, a staff consultant at the local Merchants and Manufacturers Assn., a trade organization. “We seldom get calls on how to recruit new employees anymore. It’s all about how to trim their organizations further.

“Some major defense contracts are still winding down, and there are small suppliers out there who haven’t felt the full effect of the defense cutback yet.”

More layoffs are to be expected in January, Bolton said, as companies clear the decks for the new year.

Still, the latest unemployment rate is not the highest that Orange County has seen in the last decade. That was in October and November of 1982, during the previous recession, when the rate peaked at 8.3%.

But fewer jobs were lost during the 1981-82 recession than the 70,000 that have already disappeared during the last two years of this one, said Esmael Adibi of the Center for Economic Research at Chapman University.

“This is a much broader recession than the last one,” Adibi said. “You expect to lose jobs in manufacturing and construction, as we did in the last recession.

“But this one has hit everything across the board--even services, which usually grow very fast.”

And there is more bad news.

“A lot of the jobs lost in the last recession came back when the economy improved,” said Eleanor Jordan, labor market analyst for the Employment Development Department.

“This time, though, some won’t return because the changes in the economy we’re seeing are permanent, structural changes.”

Government spending for defense is not likely to reach Cold War levels again. The torrent of cash from savings and loans and banks that made possible the boom in office construction in the 1980s isn’t likely to return either, she said.

The Employment Development Department expects statewide unemployment to hit 11% within the next few months before starting to come down. The earliest that the state’s economy is likely to recoup the hundreds of thousands of jobs it has lost during the recession is in the first quarter of 1994, the department says.

And that is about when Orange County can expect to regain the tens of thousands of jobs it has lost, labor analyst Jordan said.

One of those statistics was waiting in line Thursday at the state unemployment office on Grand Avenue in Santa Ana on the last day of a bad year.

“I’d take anything now,” said Elsa Salgado of Santa Ana, an unemployed nurse.

“It’s an uneasy feeling, being unemployed.”

Times staff writer Chris Woodyard contributed to this report.

7,000 in O.C. Join Jobless Ranks

The county’s monthly unemployment rate since November, 1991: November 1991: 4.4% November 1992: 7.0% Source: California Employment Development Department