O.C. Unemployment Dips to 4.2%

SANTA ANA — Orange County’s jobless rate dipped to 4.2% in March, the lowest for the month in six years, as the local economy posted solid job gains in the services sector, state officials reported Friday.

Leading the way were business services, such as software companies and temporary-help firms, which added 1,100 workers from February to March.

“Business has exploded,” said David Markowitz, division director at Litronic Inc., a Costa Mesa information security firm that has doubled its payroll in the last year.

Litronic, which now has 120 employees, has added several people in marketing, sales and programming over the last month alone, Markowitz said. He attributed the growth to increasing use of the Internet.

Orange County’s latest unemployment figure was down from 4.6% in February and 4.8% in March 1995. The unemployment rate also remained well below the statewide jobless rate, which dipped to 7.6% from a revised 7.7% in February.

The state’s unemployment rate, which unlike Orange County’s is seasonally adjusted, reflected the smallest payroll gains since last fall, with declines reported in construction, government and retailing.

In Orange County, nonfarm employment totaled nearly 1.17 million in March--up almost 2% from a year earlier. Though that is slightly behind the pace of growth for California overall, analysts said they expected Orange County’s job totals to pick up in the coming months.

“A 2% growth is still pretty good, twice the U.S. rate,” said Walter Hahn, a real estate economist in Newport Beach.

The weaker national economy might have slowed Orange County’s growth, Hahn said, but he remained bullish about the local economy. “New home sales in the county are up 50% in the first three months of this year,” he said. “The effect of the bankruptcy is pretty much behind us. . . . I expect job growth to accelerate.”

The latest jobs report offered several promising signs.

Manufacturing employment in the county, though still down slightly from last spring, has held firm in recent months. And in March, factory jobs grew by 200, with workers putting in more overtime and earning 3.5% more in hourly wages than a year earlier.

Roger Kuntz, vice president of Kuntz Manufacturing Co., a Santa Ana maker of automated equipment for other manufacturers, said he thinks factory employment in Orange County will continue to climb.

“The reason employment is getting better,” he said, “is that I’ve seen a lot of small companies sprouting.”

The monthly jobs report by the Employment Development Department often misses small companies, especially start-up businesses.

In fact, another indicator--state payroll tax withholding receipts--suggests that Orange County and the rest of the state actually are creating many more new jobs than are being recorded, said Ted Gibson, principal economist for the State Department of Finance. These receipts often provide a more accurate barometer than the initial monthly employment estimates, he indicated.

The resurging industries in Orange County also include transportation and public utilities. Led by trucking and warehousing businesses, this sector has seen employment grow by a robust 3.4% since March 1995.

But by far the strongest area is the services sector. Over the last month, amusement businesses and motion pictures alone added 900 jobs. Though some of the growth was seasonally related, employment in this group now stands at about 31,900--a whopping 14% increase from a year earlier.

Employment in the county’s finance, insurance and real estate sector also held steady in March, as it has for the last few months, signaling that the long decline has bottomed out. However, the banking industry is likely to take some more hits in the wake of Wells Fargo & Co.’s announcement this week that it will close 25 branches in Orange County as a result of its acquisition of First Interstate Bank.

The construction industry continues to lag in Orange County. In March, employment fell by 200. And payrolls have increased just 1% in the last year, compared with an annual growth of nearly 5% in construction for all of California.

Al Gobar, a longtime real estate economist in Fullerton, said Orange County isn’t getting as much new highway and other public sector construction as other places in the state.

Even so, commercial and residential developers are starting to build houses and office buildings again, which should bring employment gains, Gobar said.

Times staff writer Stuart Silverstein contributed to this report.

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Unemployment Declines

Orange County’s jobless rate fell to 4.2% in March, the lowest for that month in six years, as the local economy expanded by 4,300 nonfarm jobs. March job growth was fueled by the services sector, led by firms such as temporary help suppliers and amusement businesses.

13-month Trend

March: 4.2%

March Comparison

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Sector Gains

Top job-producing industries from February to March:

Business services: 1,100

Amusement/movies: 900

Wholesale trade: 800

Eating/drinking places: 500

Government: 400

Transportation: 300

Health services: 300

Engineering & management: 300

Manufacturing: 200

Source: State Employment Development Department

Researched by JANICE L. JONES / Los Angeles Times