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O.C. employment should rise 13.4 percent by 2016

Business and professional services industry will remain a key player in local economy, says new report.

By Kristen SchottPublished: October 14, 2009 08:48 AM

The Orange County Workforce Indicators Report released today by the Orange County Business Council and the Orange County Workforce Investment Board suggests that the region's future is bright, but businesses and local industries must work hard to sustain it – and grow.

Among the findings: Orange County's employment is expected to increase 13.4 percent from 2006-2016. Though the number is much lower than the 18 percent projected increase during the 2004-2014 period due to the recession, slow growth is expected. And the business and professional services industry remains a key player within the local economy.

The study, which analyzes the region's economic and labor force trends over the next several years, covers such topics as wages and employment; growth occupations; trends, clusters and changes within industries; and workforce housing.

The full report is available on the Orange County Business Council's Web site, but here's a look at some of the key indicators:

Industry growth: Based on projections from the state's Employment Development Department, the largest job growth will occur in business and food services, as well as the health-care industry from 2006-2016.

The top five industries in O.C. by percentage of job growth between 2006-2016 are nursing and residential care facilities; full-service restaurants; management and scientific technical consult services; computer systems design; and ambulatory health-care services.

Cluster analysis: The report also differentiates between industry sectors, which are mentioned above, and clusters. The former is defined by business activities in which they perform and is used by the EDD. The latter, on the other hand, are "geographic concentrations of interconnected companies, specialized suppliers, service providers and associated institutions in a particular field" within an economy. These companies typically have higher growth and provide higher wages.

The three largest clusters by the size of employment are manufacturing, tourism and management, and administration. Their continued success solidifies the region's strong service and manufacturing sector, according to the report.

The technology clusters also are important to note because of their continued increases in salary levels, despite economic contraction. And this suggests that employment could rise in the near future.

Yet, the report points out that a high portion of the region's job growth will occur in the service clusters, which have lower-paying positions and little wage increases. It suggests that work force development policies within the sectors should work to build options for wage growth, as well as create "skill ladders" that can reposition employees in higher-paying tech clusters.

What's the goal? To create 5,000 new, high-wage jobs in biomedical and computer software clusters, and 25,000 in business and professional services by 2010. The report says that business and professional services are on target to meet that goal, while the computer software industry is not.


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