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Victor JanulaitisForecast West Coast MIS Job Market
March 1993

Business activity is picking up - - Will the improvement last more than one quarter?

by M. Victor Janulaitis

As the world economy turns towards improvement, the diversity of the West Coast is starting to show through. With the rest of the country continuing to improve some, many organizations are again starting to turn their heads west. The super bowl and end of the drought have both helped. The regulations firms face here may be tough but the cost of operations have continued to fall. The surplus of office space and the movement towards fixing the workers' compensation laws are starting to have an impact.

Most of the new business activity has been in areas that you would least expect it. They include the San Fernando Valley, San Diego and the Portland/Seattle metro areas. Another area of growth is in the Palmdale/Lancaster area. It seems that housing costs are lower there and there is a well educated labor force that is willing to work for reasonable wages. There continues to be a move out of the Los Angeles city to other areas in the metro area. Los Angeles still troubles many because of the uncertainty of the government with over 20 candidates for the mayor's position, the slow and massive effort required to rebuild LA and seeming lack of a program to get "law and order" back into south central LA.

Several large enterprises have started to do some new work. This includes a few foreign owned distribution companies that are starting to position themselves for the recovery. However, one of these firms is poised for a major lay-off due to poor sales. The health care and insurance industry is moving ahead with the new administration in Washington giving them encouragement. HMO's and firms providing health care to the aging "baby boomers" is were there is a lot of action.

One of the sleepers may be the defense industry. With the cutbacks and high use of military parts and equipment, there will be a need to replace a lot of those one time use items. I have yet to see any military establishment replace a large portion of their armaments with last year's model. Add this to the fact that the new administration is probably looking at how to make Keynesian economics work. They will need to spend a lot of money to see that the economy is sufficiently turned around to give them four more years. Clinton is no dummy and he knows that Bush lost the election because of pocketbook voters. Defense could be a bright spot on two fronts. First, because the defense firms may have cut back more than they had to. In order to maintain the support for spending they will need to add staff. Second, because they are the only firms that have the engineers and experience necessary to help rebuild the infrastructure of the country.

On the staffing side, this is one of the first periods that we heard of more Chief Information Officer (CIO) positions being filled than CIOs being fired. Don't rest easy, there still is a move afoot to get rid of overhead positions. The watch word is to be value added.

Industry Prospect
Short Term
Long Term
Aerospace Poor Poor
Distribution Poor/Fair Fair
Entertainment Good Good
Financial Services Fair Good
Health Care Good Excellent
Insurance Fair Good
Manufacturing Fair Fair/Good
National Consulting Good Good
Service Fair Fair/Good