Posted on: Tuesday, March 5, 2002
California economy outshines neighbors'
Bloomberg News Service
SAN FRANCISCO — California escaped the worst of a recession that eliminated the Western states' distinction as the fastest-growing part of the United States, an analysis by the Federal Reserve Bank of San Francisco found.
Reduced business spending on computer and communications equipment, produced in the area, along with the effects of the Sept. 11 attacks, contributed to a 0.6 percent decline in regional payrolls last year, about the same as for the rest of the United States.
Employment had grown more than 3 percent for the region in 2000, compared with more than 1 percent for the United States.
California outperformed its neighbors "largely due to the economic strength in the southern part of the state," the analysis found.
Because it is less reliant on information technology and more diverse in manufacturing and service industries than the San Francisco Bay Area, Southern California endured fewer job losses, said Mary Daly, author of the analysis and a senior economist at the San Francisco Fed.
Also, because the area attracts many travelers who drive instead of fly, tourism declines were less severe than elsewhere as air travel slumped after Sept. 11.
Only three of the nine states covered by the analysis — Alaska, Idaho and Nevada — recorded job gains last year. Alaska was the only state in the region to see its pace of economic growth increase in 2001.
The other states included in the analysis were: Hawai'i, Oregon, Washington, Arizona and Utah.
Manufacturers of information-technology products and equipment sliced jobs at an 8 percent annual rate in the second and third quarters of 2001, and employment in business services such as software and data processing fell at a 4.5 percent rate, the analysis found.
In Hawai'i, which counts on travel and tourism for about a third of its economy, employment in the last three months of the year fell at a 10 percent annual rate.
The recovery may be stronger for the region, the analysis says.
